Small Business Act – whispering its faults

Source: George Mangion¸ PKF Malta
As published on the Malta Today on Wednesday 18th June 2014

PKF Malta is planning to take an active part in SME week¸ which will be held next October under the auspices of Minister Chris Cardona. Our motto of the participation is to help regenerating entrepreneurship.  This event is taking place almost three years since the promulgation of the Small Business Act previously previously led by the parliamentary secretary Azzopardi in July 2011 with the famous motto “Think Small First”.

It is a pity when considering the fact that the ‘think small first’ concept has never quite taken off in Malta. It begs the question- what are the chances of success now¸ three years later¸ when one is still hearing pleas from politicians about the relevance of helping small businesses ?

Some say this is a cultural revolution and therefore difficult to achieve- so just be contrite and take a long breath since SMEs in Malta have long been seen as the Cinderella of the business community.  Unfortunately¸ much too often SME ‘s  are deemed to be a necessary evil and given second preference for government tenders as such opportunities are usually the domain  of  mega businesses ( government agencies prefer the status quo when issuing tenders even though the EU encourages them to be more kind to start-ups and give a second chance to relatively untested SME’s bidders).

It goes without saying that this obviously discourages the small business sector in its quest to become more entrepreneurial.  It is evident that growth in traditional areas of micro-enterprises is slowing down at disturbing rate.  Could the reason for this be that very little (and too late sometimes) is done by the administration to help reinvent the sector?

It is not a moment too soon that Malta Enterprise has introduced the Go Global scheme to help a number of applicants try the difficult path to produce for export or in certain cases to diversify into new export markets.

 The idea is great and a number of experts were selected following a call for applications to help mentor potential exporters to carry out an analytical assessment of their business model and produce a plan and effective strategy to export. The scheme is intended for small and medium caps and pays experts 15 hours of their work to help applicants unravel the mystery of how to successfully find international buyers for any domestic production diverted to export.

 It is definitely an ambitious¸ albeit somewhat underfunded scheme where Malta Enterprise is placing less than half a million euro to cover the cost of diagnostic plans¸ training of applicants and follow through the actual exports created over a two-year period. Quoting the Malta Enterprise announcement¸ it continues to say that applicants can qualify if they are involved in any industrial sector and whose share of revenue from export activities is less than 20%¸ employing not more than 250 persons.  

 Go Global seeks to assist enterprises taking their first steps towards internationalisation¸ ideally active in such sectors as manufacturing¸ food & beverages¸ industrial services¸ ICT and software¸ Research & Development¸ life sciences¸ engineering and other value-adding activities of an industrial nature. 

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