Trade support institutions have an important role in Malta, to
firmly establish Malta on the world trade map. As the national
trade promotion organization, the Malta External Trade Corporation
(METCO) is the lead agency responsible for projecting Malta's image
as a business partner.
National IT strategy: the link to trade
promotion
In 1994, the Government of Malta commissioned a one-year project
to draw up recommendations to deploy information technology on
three principal fronts:
- business opportunities and development;
- telecommunications infrastructure; and
- education.
The study, conducted by Malta's Council for Science and
Technology, evolved into Malta's National Strategy for Information
Technology. It identified IT as the necessary ingredient that Malta
needed in its search for a new cycle of socio-economic growth and
recommended ten strategic thrusts. At the top of the list stood the
raison d'être of the IT strategy: "to augment Malta's profile as an
international broker of services and goods".
The Internet's role in trade promotion
Visibility for Malta. METCO recognized the potential of the
Internet as a promotional tool at an early stage. METCO Online was
officially launched in July 1995, before an Internet node was
available in Malta. For the first time, it was possible for foreign
business entities to easily access online information about Malta,
its business environment and support institutions, and about METCO
and its services for the international business community. METCO
was therefore instrumental in establishing Malta's presence on the
Internet.
Visibility for Maltese industry. In 1995, METCO also published
its 'Made In Malta Directory' company register in its entirety on
the web. With over 1,500 entries, there are product and contact
details for manufacturers, exporters and services companies,
organized in 25 industry sectors. This online business directory is
still the most accessed resource on METCO Online and has often
proved to be the gateway that links Maltese suppliers and overseas
buyers for the first time. This initiative placed METCO as one of
the first trade support institutions to provide a comprehensive
national register of exporters on the web.
Visibility for Maltese enterprises. Out of a registered user
base of over 550 enterprises, only about 30% have a web site.
Although the number is growing fast, METCO perceives this as being
too low. It thus decided to take its exposure for Maltese exporters
one step further: it delivers a comprehensive web-publishing
service based on companies' specified needs, to help them use
Internet as a promotional tool and generate business leads. Firms
can bring product information to potential buyers via an online
presence that already enjoys high visibility. METCO designed, hosts
and maintains about 50 such web sites (with a detailed profile, a
visual and descriptive product/service catalogue and an online
electronic form for buyer enquiries). Firms can now have their own
domain name and their own e-mail address. The enterprises pay an
annual fee, which helps METCO gauge whether firms still deem the
service as a useful one. This initiative establishes METCO's
commitment to an environment that encourages and empowers Internet
use within the business community.
Government's role: infrastructure for a digital
economy.
A national culture of information technology is developing,
spurred by massive infusions of information systems within the
public sector. However, the level of confidence by Maltese firms
has been low since e-commerce (or e-trade) is deemed as risky. This
is because national legislation offers little by way of security or
recognition for electronic transactions or contracts.
Two recent developments address the infrastructure gaps in
establishing Malta's place in the digital economy: liberalization
of the telecommunications sector; and the proposed establishment of
a legislative framework for information practices.
Telecommunications liberalization. In April this year, the
Government announced the reform and liberalization of the
tele-communications sector. Malta already enjoys state-of-the-art
digital telecommunications networks. The liberalization will end
existing monopolies in fixed and mobile telephony, and in
international gateway services. All other telecommunications
services, including cable TV networks, have been liberalized.
Proposed e-commerce bills. In May, the Government published a
White Paper proposing a legislative framework for information
practices to position the country in the digital economy It
includes:
- an Electronic Commerce Bill which provides the legal basis for
the safe but free conduct of electronic commerce;
- a Data Protection Bill which safeguards citizens from the
potential abuse of their personal data through information systems;
and
- a Computer Misuse Bill which protects owners' rights, valuable
data and information systems.
The fundamental principle of the Electronic Commerce Bill is
that electronic communications should not be discriminated against
- that there should be no disparity of treatment between electronic
communications, electronic records or information in electronic
form and paper communications, records or information. This
therefore brings together the legal and commercial structures for
business transactions whether carried out in the physical or
virtual environments.
The Bill draws on a variety of sources, including the United
Nations Commission on International Trade Law (UNCITRAL) Model Law
on E-Commerce of 1996, the 'Electronic Signatures' and 'Electronic
Commerce' directives of the European Union, as well as from the
legislation of other jurisdictions, primarily Australia and
Ireland. When enacted, these three bills are expected to stimulate
development of electronic commerce by consumers and businesses
alike; to permit a quality leap in all government services, as they
establish a critical foundation for e-government; and to position
Malta as a leading hub for electronic commerce.
What Maltese SMEs say they need
Maltese firms are characteristically small or micro enterprises.
Typical of SMEs in general, many companies rely on a limited number
of foreign markets. Again, as often happens with SMEs, both
domestic and international sales and marketing are the function of
one person (often the owner of the business). Due to obvious
constraints, traditional market research is sometimes given only
minor importance and consequently is not regularly undertaken. This
maximizes the risks associated with international marketing
efforts.
Maltese industry has developed during the past four decades
under relatively sheltered conditions and has traditionally been
orientated towards the local market. This has rendered some Maltese
firms as relatively inexperienced operators in international trade,
even if this characteristic is rapidly changing with more companies
becoming increasingly active and successful abroad.
These same firms are now in an economy going through radical
change; adapting to a new global trading environment presents a
challenge to SMEs everywhere. Industry needs to restructure and
internationalize in the shortest possible time. Given the extremely
limited size of the domestic market, restructuring can only take
place via export-led development that allows for the challenges and
opportunities brought about by the digital economy. This is a
scenario that many small countries and companies have to face and
overcome.
Is Maltese industry ready for the Internet revolution? To find
out, METCO recently commissioned independent research (consisting
of ten focus group discussion meetings with randomly selected
companies from various industry sectors). This in turn suggests
that many SMEs are looking towards the Internet as a means for them
to make the quantum leap into the global marketing environment -
something which they could not readily do before the advent of the
Internet. Feedback from enterprises identified:
- Demand for faster, customized product- and market-specific
information.
- Less willingness to physically visit METCO's Business
Information Centre (trade library) to conduct basic secondary
research.
- Less willingness to browse through printed business information
prepared by METCO, such as market reports and newsletters and less
printed promotional materials.
- Demand for more timely notification of trade and investment
opportunities.
- Demand for more information on the realities of export
potential and risks.
- A single point of contact and access.
Rising to the challenge
Restructuring is not for industry only. METCO's operations and
services are also being refined and intensified to help Maltese
firms cope with increased domestic and imported competition, and to
further integrate Maltese enterprises in the global marketplace. In
doing this, METCO has established Internet technology as one of the
central elements for its internal efficiency and for export
development. Substantial investment has been injected in the
technological infrastructure to enable METCO to take advantage of
the new electronic and telecommunications facilities available.
Four pillars
METCO's role is not at the policy-making level. Rather, it
focuses on enabling the participation of enterprises, especially
SMEs, in the digital economy by:
- creating awareness;
- stimulating use of the Internet;
- delivering value; and
- showcasing.
A paradigm shift for SMEs
From 2000 to 2002, METCO is implementing a series of incremental
initiatives that provides immediate value individually, and
long-term value collectively (see box). The aim is to achieve a
transformation in how Maltese firms prepare for and conduct
international business, a paradigm shift that can:
- encourage more firms to use more information and communication
technologies in general, as well as to use the Internet as a market
research tool and as a promotional medium;
- enhance the export capabilities of Maltese enterprises to
achieve market diversification and economic integration; and
- enable industry to operate more effectively and competitively
in international markets.
METCO's offerings
METCO is therefore realigning its strategy so that it is more
adequately organized to:
- provide basic but essential tools to build national competitive
advantage, by stimulating firms' use of Internet technologies in
day-to-day operations;
- exploit business information resources, turning them into
accessible, visible products, thus creating favourable conditions
for Maltese firms to access business information, know-how,
training and technology;
- create convenient and integrated systems to help promote
Maltese products online;
- pioneer and showcase e-commerce solutions and value-added
Internet ser-vices as models for Maltese firms to use and follow;
and
- bring Maltese enterprises together via an interconnectible and
interoperable framework, thereby enhancing METCO's interface with
clients.
An extended intranet system linking Maltese firms to METCO is a
priority in the short term. Advantages to METCO and its
clients:
- It nurtures a culture towards internationalization and enhances
trade capabilities of Maltese companies.
- It lowers information barriers.
- It facilitates contacts between Maltese firms and foreign
counterparts.
- It enables more effective participation of Maltese firms in the
digital economy.
- It enhances the interface between METCO and the firms it aims
to assist.
Challenge for TSIs
The digital economy requires that all actors be equipped to
participate successfully. In this new environment, information and
information processing are the prime assets. Those who are prepared
for information distribution, transaction processing, information
processing technologies, and information processing services will
benefit from opportunities.
Trade support institutions (TSIs) face the challenge of using
technology to the fullest to help small firms make the leap into
the global economy. Market competition is intense; the growing
amount of media and information tools for trade promotion make that
competition even more intense. Trade support institutions are
uniquely positioned to demonstrate:
- How information and communication technologies are relevant to
the needs of industry.
- Which technologies can have a positive and supportive impact on
businesses.
- What exactly are the benefits of e-export, and what are the
threats.
- How existing technology can be better utilized and how
competitors are using it.
- What is affordable and easily implemented.
It is with this in view that METCO wants to bridge the gap, to
help Maltese firms make more informed decisions, to benefit from
new business opportunities, to find new buyers and suppliers, and
become more efficient in dealing with clients.
In a nutshell: Malta's strategy to bring firms into the
digital economy, 2000-2002
Creation of awareness
- Workshops, seminars and conferences.
- Small guides on Internet use as a promotional tool, as a medium
for export market research, and as a direct marketing channel
(e-commerce).
- Directory of Web Sites for Exporters (also available
electronically).
Encouraging participation in the digital economy
- Free, business e-mail account to all METCO registered
users.
- Basic web presence for a nominal fee (in collaboration with the
private sector).
- METCO e-Export award.
Adding value
- Fast dissemination of trade leads and notices of international
procurement opportunities via e-mail and the web.
- Online repository of trade, business and market information,
tailored to needs of specific firms. (Contents: country and
product-specific information; economic data. import/export
regulations; business practices; trade statistics.) Expected to
become METCO's principal means of providing business
information.
- Business Information Centre database online, enabling firms to
be aware of all information resources at METCO.
- Computer-based training materials relating to formalities of
international trade and services such as banking, insurance and
transport.
- Contact lists that enable Maltese companies to proactively get
in touch with overseas organizations such as import promotion
offices, trade fair organizers, industry associations, customs
authorities and statistical offices.
Showcasing
- Launching e-commerce enabled industry-specific web sites (in
cooperation with other entities - local/international,
public/private) in which Maltese SMEs can actively
participate.
- Transform the 'Made In Malta' directory into an active resource
by having an e-mail address and web page for each featured
firm.
Anton J. Said is
Manager, Business Information and Technology Division, Malta
External Trade Corporation. The article is adapted from a research
brief he provided for the ITC Brainstorming Session (July 2000) in
preparation for the ITC Executive Forum on the Digital Economy
(September 2000).