‘We cannot have an education system that is disconnected to where the economy is headed’

During the 17th edition of the FinanceMalta conference, Stephanie Vella emphasised that Malta cannot have an education and training system that is disconnected from where the future of the economy is headed and that the country finds itself at a crossroads.

Dr Vella, E-Cubed Consultants Ltd Director, Governor of the Malta Financial Services Authority (MFSA), and a Board Member of the Malta Fiscal Advisory Council highlighted the importance of training and education to create highly skilled workers during a panel discussion organised at a FinanceMalta conference titled ‘Empowering Financial Services.’

The panel included Carmine Di Noia, Director for Financial and Enterprise Affairs at the Organisation for Economic Co-Operation and Development (OECD), Jochen Biedermann, Managing Director for the World Alliance of International Financial Centers, as well as Emmanuel Daniel, Author, Advisor, Futurist and Founder TAB Global.

Dr Vella commented that “unfortunately, some of the growth experienced over the past years was consumption-driven and less export-driven. As a result, we need to place impetus towards export-driven and services-oriented sectors.”

She remarked that the population growth experienced over the past years has led to “a very tight labour market,” which has made it difficult for many sectors to find highly skilled workers.

“That is why we’re currently at a crossroads. As a country, we need to stop and ask ourselves whether we will continue to put all our eggs in one basket or conduct an exercise where we understand Malta’s source of growth and any factors that are potentially hindering us,” she continued.

She recalled that opportunities for growth are out there, but strategic decisions need to be taken as Malta’s resources, including land, are limited, “and we should focus on productive services.”

While acknowledging that the launch of the Malta 2050 Vision is highly positive, she commented that planning requires all stakeholders to be on board, not just at a Governmental level but also in collaboration with the private sector and educational institutions.

During the panel, Kotoro Ishi, the Mission Chief for Malta and Denmark at the International Monetary Fund, made an address through a video message, sharing similar thoughts to Ms Vella.

He recognised that over the years Malta has demonstrated remarkable resilience and experienced impressive recovery after the pandemic. Furthermore, he added that Malta’s growth has put it among Europe’s top performers, despite its size.

Mr Ishi shared that Malta’s economy is likely to continue to perform well, but structural challenges might persist. Here he referred to issues like a strained infrastructure and public services, “that are not viewed as sustainable.”

In this sense, he expressed his belief that “Malta must focus on productivity-driven strategies. This involves increased investment in education, training, innovation, and environmental sustainability to promote high-productivity industries.”

He continued that Malta must seize these opportunities by encouraging investment, especially as the world is rapidly moving towards a digital-first economy.

Mr Ishi continued that Malta has three key challenges ahead, which include talent shortages, access to funds, as well as regulation and supervision, to which he gave multiple suggestions:

1) Talent shortages:

He argued that Malta must prioritise education and skilling and invest in an educational system that promotes science and technology so that students are well-prepared for the jobs of the future. Additionally, he emphasised that upskilling and reskilling are essential to ensure that Malta’s workforce remains adaptable, ready to take on challenging jobs that require productivity.

2) Access to finance:

He shared that startups and innovative SMEs play an important role in driving innovation, “however they often struggle with funding.” To fill the gap, he added, the Government must continue to provide support schemes. However, he remarked that “the recent establishment of the Malta Venture Capital Fund is a step in the right direction.”

3) Regulation and supervision:

In terms of regulation, Mr Ishi commented that while digitalisation can benefit both banks and the consumer, it might also pose risks. He highlighted that banks must continue to improve governance and risk management to identify, monitor and mitigate risks associated with digitalisation of finance. Furthermore, he said that it is important for regulators to take a balanced regulatory response in every financial sector to leverage new technology while mitigating risks.

In his concluding remarks, Mr Ishi said that the financial sector in Malta will remain a driving force of the economy, but its future success hinges on a collective effort in embracing digitalisation, investing in AI, and prioritising education and skills development. “This way, we can aim for a prosperous future in Malta.”

Speaking from the perspective of a father, Mr Di Noia argued that for the young generation to understand the issues discussed during the panel and to attract them to the industries, it is up to those in power now to translate it “into their own language.” This includes using social media apps like TikTok.

Other panellists joined in and further encouraged more education and also utilising the blue economy as an island.