Major economies and those actors that have ambitions to leave an international mark are at a junction. Businesses are being called by investors and clients alike to ditch their traditional operational models and embrace more sustainable and innovative ones.
Within this context, start-ups and scale-ups play a critical role. They help drive sustainable economic growth, investment and job creation for the next years. Given Malta’s stage of economic development, start-ups and scale-ups are seen as an enabler to drive sustainable growth.
The EU has also realised the importance that start-ups and scale-ups can have. Similar to other areas, it needs to close the gap with the US, the UK and other better-performing non-European countries. The EU is currently trailing behind because of a previous lack of awareness as to the importance of having a competitive start-up ecosystem and how innovative policies can stimulate this, together with cultural aspects such as hesitation towards risk-taking.
Initial EU response to drive start-ups
To enhance the challenges that start-ups face during the first few years of
formation, the European Commission has launched and supported several initiatives: one of them being the European StartUp Nation Alliance (ESNA).
ESNA assists the signatory countries (Malta being one of them) in implementing standards, such as the reduction of administrative burdens for businesses. ESNA’s main aim aligns with the EU’s target to double the number of unicorns in the EU by 2030.
However, the start-up scene in Europe has been characterised by lack of clarity. According to Politico, in 2021, EU start-ups had lamented a lack of direction from Brussels. This voice is still being strongly echoed by start-ups today. During the ‘Web Summit’ last month the start-up association ‘Allied For Start-ups’ demanded a “commissioner for digital entrepreneurship” who can act as a single point of contact for all start-up policy and programmes.
Malta Enterprise as a catalyst for development
For the past five years, Malta, through the strategic role of Malta Enterprise (ME) and other entities that supported this initiative, has been focusing more on the attraction of innovative start-ups. The function of ME is not restricted solely to the provision of funding but also spans into other strategic areas.
When it comes to marketing, ME created the ‘StartinMalta’ platform that serves as the single point of contact for start-ups based in Malta and those exploring to start in Malta.
Last October, Malta Enterprise launched a start-up framework for stakeholder consultation to address gaps blocking the start-up ecosystem to reach its potential. The consultation will end this month after which strategically different policies will be developed and implemented.
The EU has realised the importance that start-ups and scale-ups can have
Malta Enterprise has also managed to attract accelerator programmes led by Super Charger Ventures and Plug and Play. These contributed both to assist start-ups that were already present in Malta and also to attract new ones. Furthermore, they have provided participants with access to their global network of mentors and investors; an aspect that is critical given the smallness of Malta’s local ecosystem.
Funding and events
Between 2020 and 2022, ME under its entry-point scheme ‘Business START’ scheme approved 68 projects with a grant value of circa €2.5 million. For the same period, under ‘Startup Finance’, targeting well-developed start-ups and scale-ups, a total of 51 projects were approved, with advance repayable reaching a figure of €21m.
Meanwhile, the recently launched €10 million VC fund by the government, that will be administered by Malta Government Investments, is a step in the right direction to increase interest by local investors in start-ups. The implementation of the start-up framework will also seek to make such investment more lucrative and to leverage more on private investment.
Start-ups that visit Malta are positively impressed by the number of meetings that take place during which they can interact with like-minded people. ME’s ‘Start-up Festival’, held on an annual basis for the past three years, has garnered a reputation for being a strategic platform and an entertaining festival for start-ups.
Meanwhile, with the support of Malta Enterprise, on May 9 and 10, 2024, the renowned ‘EU Start-ups summit’ will be taking place in Malta. This festival will bring along new vibe and provides access to a fully international network that has been developed over the years.
Giuseppe Battaglia and Karl Pirotta, both interns at Malta Enterprise, are furthering their education portfolio in European Studies at the University of Malta.