Malta’s main shortcomings in research and development are mainly due to our market size being restricted as well as to our ability to innovate. In fact¸ as discussed in a public meeting organised by the MCST¸ Malta should only try to focus on a small amount of projects which are of huge potential and include as many people as possible¸ rather than trying to delve into a wider spectrum of projects.
Shortages are also experienced when it comes to the supply side in relation to human capital and R&D investments. Due to these¸ the EU Innovation Scoreboard classified Malta 22nd out of the 27 EU member states. However¸ surprisingly enough¸ Malta is considered to be part of the top 5 European countries which have registered a significant increase in innovation performance between 2008 and 2012. So¸ as one may notice¸ Research and Development in Malta still lags far behind¸ but is surely in the right direction.
Experience has shown that countries with consistently high investments in research and innovation (R&I) tend to manage better with economic difficulties and are normally more able to sustain a high standard of living. Undoubtedly¸ Research and development initiatives are crucial to the Maltese economy from which Malta attracts precise activities that have the prospective to create high value added activities and employment.
In the past¸ the Maltese economy was somewhat dependent only on a limited number of industries¸ mainly the manufacturing and tourism industries. However¸ over the past years¸ the Maltese economy has been experiencing radical changes. In fact¸ it has opened itself to more specialized and value added sectors which are now the main contributors of the Maltese GDP. Some of these include the aircraft maintenance¸ financial services¸ on-line gaming as well as pharmaceuticals.
As stated in the National Research and Innovation Strategy 2020 report¸ an increase of 45% over the period 2000-2011 was recorded in the Maltese Gross value added. Such increase is due to the contribution of different sector to this overall growth¸ with an increasing contribution from the service sector and decreasing contribution from the industry¸ wholesale and retail trade¸ transport¸ accommodation and food services.
Gross R&D expenditure as a percentage of the GDP remained fairly stable between 2004-2009¸ with an average of 0.55% until 2010. In 2010 and 2011¸ the R&D contribution to the gross value added (GVA) increased to 0.66% and 0.72% respectively¸ mainly due to capital and recurrent expenditure increase in the higher education sector. Once more¸ an increase of 0.19% over 2011 was recorded for 2012. In fact¸ the government has set a target that by 2020¸ this figure will increase to 2%.
If we had to consider the amount of doctorate graduates¸ up till 2012¸ 0.47% of the active population were doctorates. Again¸ between 2006 and 2009¸ this figure was quite stable¸ but started to increase from 2010 onwards. The target set here is of 0.6% up till 2020.
Using the figures published by NSO¸ when it comes to the total expenditure on R&D activities during 2012¸ the amount accounted to €62.4 million¸ an increase of €14.2 million or 29.4 % when considering 2011. Such an increase was due to higher expenses on capital expenditure of €9.7 million¸ primarily investments in R&D facilities¸ including the Life Sciences C
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