In 1962, a subsidiary firm of a transnational company started operations in Malta under the name of Malta Rubber.

This foreign based and export-oriented firm, still operating in Malta from its current premises in Ħal Far under the name of Trelleborg Sealing Solutions, played a pioneering role in the industrialisation process of the Maltese economy. 

Industrialisation in Malta assumed the form of a designated policy aimed at making the Maltese economy self-reliant by decreasing its dependency on the largesse of the British government. This economic and self-sustaining goal was to be achieved through a policy designed to attract foreign direct investment.

The operations of global businesses through their subsidiaries in the Maltese labour market fell within this line.

This initiative of foreign direct investment must have served as a good harbinger for the Maltese economy. Indeed, following these initiatives, during the 1960s and 1970s a clutch of foreign-owned, export oriented companies set up shop in Malta.

The acknowledgement of this path-setting role of these firms and the goals being sought by and large achieved confirm the view that the take-off towards industrialisation in Malta started in the 1960s.

This cycle characterised by foreign direct investment was not destined to lead to a finite stage. Indeed, the dynamism and resilience of the Maltese economy were seriously tested by events in the newly globalised economic market.

The most severe test was the financial crisis of 2008 which caused a slump in the economy. This slump was compounded by the closure of foreign firms operating in Malta such as Denim Sportswear and VF which, through its manufacturing of jeans for export, was one of the main actors in the Maltese textile industry.

This continuous decline of the manufacturing sector during the first half of the 21st century may be taken as a signal of the end of the first phase of the Maltese industrialisation process.     

As happened in other countries, including the UK, which is widely acknowledged to be the birthplace of industrialisation, clothing and textiles played a pioneering role in the industrialisation process.

The growth of the textile industry based on techniques of mass production is often equated with the initial phase of an industrialisation process.

Its standard techniques of production enable it to penetrate markets and consequently make it prone to relocation. Moreover, the higher cost of labour, often induced by policies aimed at maintaining the wage relativities, diminished the comparative advantage of its location in Malta.

This drastic slowdown in the manufacturing sector especially in the clothing and textile industries propelled the Maltese economy to shift towards the service industry and more value-added activities.

The shift marked a focus on high-end manufacture and expansion in the service sector by initiating high-value activities such as specialised forms of tourism, through teaching of English as a foreign language, dive centres, back-office administration and electronic gambling and betting.

This tide of a post-industrial society has opened niches in the labour market within which aspirants can pursue and maybe realise their dream of becoming affluent. The dynamics of the economic sector have made it possible for a number of workers to land new positions in the labour market and find jobs that match their skills and satisfy their aspirations.

Workers’ expertise and know-how can be replaced by machines, artificial intelligence, software and algorithms- Saviour Rizzo

In this globalised market highly influenced by social media and rapid transportation and communication technology, the Maltese workforce has become highly mobile and less restrained by the forces of insularity inherent in a small island state.

The higher expectations generated by these developments have made a sizeable number of Maltese workers feel that affluence is within reach if they can tune their skills and upgrade their knowledge to the demands of the new  labour market.

Naturally, this new phase of industrialisation also contains its share of risks in the world of work, which may demand a remake of the existing jobs, the destruction of many, and the relocation of countless others.

Workers’ expertise and know-how can be replaced by machines, artificial intelligence, software and algorithms which may have major consequences for employee identity in the workplace as well for human resource management.

As market forces are being harnessed to make robots indistinguishable from human beings, there are good reasons to believe that the picture remains unfinished as the digitalised workplace keeps on searching for new options of production and provisions of services.

The highly digitalised jobs in a section of the labour market labelled as the gig economy are far from being lucrative. Very often they offer work which is characterised by indecent working conditions and low pay. The employees engaged in call centres as well as those on the pay roll of companies offering delivery and transport service can attest to this statement.

These low-paid jobs have widened the disparity in wages and in the process created a dual labour market. In one section of this market pay is lucrative and conditions of work approximate the ideal. Conversely, the workers employed in the other section of the market have to contend with bad conditions of work and low pay.

Thus, the debate about the future of work tends to be fear laden as social analysts are wary about how the digitalisation will work out.

In the meantime, Trelleborg Sealing Solutions, formerly Malta Rubber, with a workforce of 1,510 employees, quite high by Maltese standards, continues to be the flag bearer of the industrialisation process in Malta.

Saviour Rizzo

Its economic viability during its 61 years of operations in the Maltese economic sector may provide a case study which suggests that the dynamics and resilience of an economy have to be sought within the models that build around the shortcomings of the older one and the parameters of the new.

Saviour Rizzo is a former director of the Centre for Labour Studies at the University of Malta.