In answer to a series of parliamentary questions, Finance Minister Clyde Caruana tabled employment data, breaking down the number of foreign workers across the different sectors of Malta’s labour market. With a relatively flat Maltese population over the last years, it was not surprising that the number of Maltese and Gozitans in the labour market rose by just 6,000 between 2019 and 2023, that is from 197,000 to 203,000.
Delving deeper into different economic sectors, one notes that the number of them working in sectors often associated with manual labour, such as manufacturing, vehicle repair and construction, appears to be on a downward trend.
Some will say that this is proof that our economy needs non-Maltese workers to do the jobs the Maltese do not wish to do, especially since non-Maltese workers are likely to be paid less than Maltese workers. Non-Maltese workers, in a way, slow down wage growth and maintain the competitiveness of businesses operating here. If we keep going with this train of thought, we will keep importing non-Maltese workers like there is no tomorrow.
However, there is a tomorrow. One day, the infrastructure will collapse. One day, the country will not be able to sustain the population. One day, the Maltese and the Gozitans will say that they have had enough. By then it will be too late.
We need to use technology strategically to move up the value chain and start to rely much less on low-cost labour
Very often we hear the term ‘digital transformation’ being used with reference to companies. We can use it with reference to the national economy as well.
Business studies students learn that digital transformation is the application of technologies into a company’s operations and strategies. Businesses do this to better serve their customers, engage their employees more and improve their operational efficiency. This means they provide more value for less costs.
The same reasoning may be applied to an economy. Malta’s economy needs to move up the value chain through a digital transformation process. This requires a smaller workforce and a more competitive cost base. Instead of relying on low-cost labour to compete, businesses and the economy in general would rely on technology.
Admittedly such a process cannot be done overnight. It is not a switch. It requires upskilling and a change of mindset. Moreover, one cannot apply digital transformation to a part of the economy and not to another; it needs to be a comprehensive approach.
It needs a change of mindset because there is still a great amount of scepticism among the Maltese when it comes to the use of technology. For example, although the use of internet in Malta is slightly above the EU average, and usage is quite high with nearly 98 per cent of all persons who use internet using it on daily basis, there are still many who use internet in a very limited way, very often for leisure purposes.
Such a transformation requires upskilling because technology makes routine tasks easier but then challenges people to use more their decision-making skills, their communication and interpersonal skills, their critical thinking skills and their self-organisation skills.
Digital transformation is not just about automating what we do manually, but mainly about questioning ourselves on the way we work and how we go about our life in general.
We cannot be just satisfied with ourselves because technology has become more accessible. From an economic perspective, we need to use technology strategically to move up the value chain and start to rely much less on low-cost labour.