SMEs’ contribution to the Maltese economy and future prospects

In recent years Malta’s economy has expanded rapidly, reflecting substantial structural changes such as a shift towards more export-oriented services. However this transformation left untouched a long-standing characteristic of the Maltese economy, namely its reliance on SMEs. While there has been a tendency to emphasise the contribution of large projects and new sectors, official statistics suggest that SMEs accounted for the lion’s share of growth observed recently. This policy note, in fact, shows that SMEs in the business economy sector generated nearly two thirds of all growth in value added and half of the rise in employment. This is a healthy development as growing dependence on many SMEs is making the Maltese economy more diversified and therefore less susceptible to shocks. For this trend to continue, it is important that SMEs have good access to finance and skilled labour, and be sustained by an adequate infrastructure.