Thinking of entrepreneurship

One very often wonders whether the Maltese entrepreneur exists. This because as a country we have not been able to create a world class brand or we have not been able to establish a real business identity for our country. But the Maltese entrepreneur actually existed and still exists. Unfortunately, all too often, with very few exceptions, the Maltese entrepreneur has not invested in world beating ideas and has invested essentially in the domestic economy, and has spent very little effort in developing an export market. The investment has catered in meeting the demand created by the government, be it the colonial government of the past or the Maltese government of the last 40 years.

In fact, investment in the 1800s was very much in trading activities, shipping services and activities related to these two. Admittedly we did have the setting up of Farsons and a Maltese bank in the beginning of the 1900s, to be followed by others. Some manufacturing activities were started but these soon died out as Malta-made products had to compete with imported products, even as far back as, say, 60 or 70 years ago. We also had the development of inland transport services, but even these got themselves into difficulties.

This does not mean that the Maltese business people of this time were not entrepreneurs. It only means that the effort and money invested by Maltese entrepreneurs were focused on perfecting the very narrow role of the middleman.

I believe that this situation was a reflection of the structure of the Maltese economy of the time and should not be condemned. The issue is whether it is still the case today, even if the number of exceptions is definitely on the rise. Moreover we have to admit the lessons in socialism that were imparted in the 1970s and the first half of the 1980s discouraged any form of entrepreneurship in this country. It was fine for a foreign entrepreneur to invest in this country and make money, but it was often not fine for a Maltese entrepreneur to invest in this country. Thus the development of an entrepreneurial culture in Malta was stultified.

This has not always allowed us to understand fully what an entrepreneur is and the contribution of the entrepreneur to the country's economic development is not fully appreciated.

Some may think that the entrepreneur is the person who comes up with a good idea and the investor puts in his money. Others may feel that the entrepreneur is someone who takes up the good idea thought of by someone else and he invests his money. In effect, the entrepreneur is the person that has the good idea and invests his own money in that idea and earns a just profit.

To paraphrase Max Weber (considered by many the father of modern sociology), we have always had rich people around, but the capitalists (entrepreneurs) are a different breed. So the entrepreneur is not only the person who risks his own money, but he is the person who risks his own money on his own ideas.

We have had some very good examples of this in Malta. We have Maltese-owned firms operating in the IT sector who are today selling their services abroad. Other business people have invested abroad in activities ranging from tourism to transport to manufacturing. In the last 30 years a number of Maltese entrepreneurs have taken the cue from the growth in tourism and invested heavily in hotels - at least two hoteliers have also invested abroad. A bit earlier than that we had the first school that provided the services of teaching of English as a foreign language; an idea that had seemed so strange at the beginning and it was copied by others only 20 or so years later.

Thus we may not have the world class brands but in our own way the Maltese entrepreneur is there, present and active. Obviously there will always be those that go in for the quick buck or who want to make a profit through speculation; but it is critical that we distinguish between these persons and the Maltese entrepreneurs.

And what about the future? I think we do have a number of budding entrepreneurs who need to be nurtured. The effort put in by Young Enterprise in this regard should not be ignored. It was only this year that the team that took part in the European competition of Young Enterprise, placed second, having had by far the best product (hence the best idea). Moreover, this is not the first good result of this type. I do fear, however, that these budding entrepreneurs may not find fertile ground.

The lack of fertile ground may be for a number of reasons, some of which are attributable to social habits. A survey of young entrepreneurs in Italy found that most of them put in 10 hours a day of work during the week plus the weekend. The success of Germany is judged to be attributable in good part to the entrepreneurial spirit of a number of young entrepreneurs who managed to transform their brilliant engineering ideas into successful products. Their educational system played a good part in this.

I believe that it is up to all social partners to understand that we require a cadre of young entrepreneurs who are capable of becoming important mainstays in our economy. They need to carry on from where their predecessors have left, reflecting not so much the economic necessities of yesteryear, but the economic realities of tomorrow.