Malta's Smart Manufacturing Industry

A Hub for Investment in Digital Technology within the EU

Mr. Steve Muscat Azzopardi | 12 Sep 2019

smart factory

The UK's decision to exit the European Union is one of the most important political events. In this state of turmoil surrounding Brexit, the smart manufacturing industry will undoubtedly undergo a significant challenge. 

Today, the manufacturing industry is approaching ‘smart manufacturing’ or what is being hailed as the fourth industrial revolution, Industry 4.0.  By synchronising existing physical manufacturing operations to the digital realm, smart manufacturing optimises manufacturing processes through the application of novel technologies such as sensors, cloud computing, advanced analytics and artificial intelligence.  Amidst this digital empowerment, the industry has seen greater connectivity and transparency across the chain, from design to distribution. Smart manufacturing allows for faster production and effective solutions resulting from greater availability of information. This results from the integration of information, and facilitates reduced operational costs and increased flexibility that are key advantages amidst shifting industry environments and varying customer demands. The adoption of smart manufacturing has also allowed for customisation within mass production, real-time tracking and reporting of data of product functions which all aid towards continual improvement and superior operational control.   As the industry becomes more and more digitalised, it becomes more competitive as production becomes faster and more bespoke. 

Smart Manufacturing in Malta

Within this technologically changing landscape, the jurisdiction of Malta is pushing forward pilot initiatives within smart manufacturing as part of its objective to attract direct foreign investment, and to materialise its strategy to promote Malta as an international manufacturing centre within the realm of digital transformation. In the past years, Malta has launched a €20 million Business Enhance ERDF Grant Scheme incentivising research and development for businesses. The scheme encourages new innovative processes and technologies such as smart manufacturing, and acts as a means to transform initiatives and potential resources into an active way forward. By recognising the potential of new opportunities, and administering its focus towards bespoke markets, Malta has allowed for its manufacturing industry to become more autonomous and has embraced the opportunities that digital communication can bring about.  By supporting this digital shift within the industry, the island is preparing for its future in sustainable manufacturing.

A Home for Innovation 

This is not out of character for Malta. Successive governments have continuously sought to define future strategies in order to drive value through investment via measures including low tax rates and financial grants. The country’s economic growth across different industries shows Malta as a jurisdiction that consistently seeks to support research and development so that pre-existing frameworks can become more efficient within today’s environment and, in doing so, streamline ongoing processes.  It is a jurisdiction that understands the importance of flexibility within an ever changing and growing business landscape and believes that to be on the edge of innovation is to be able to adapt more easily to future developments.  Malta believes in integrating new technology as early on as the design stage in pre-existing systems in order to not get left behind.   This allows for the sustained improvement amongst both providers and clients, and continued optimisation of each industry. This pro-business mindset is what has pushed Malta’s manufacturing industry to grow substantially throughout the years.

Malta’s Leading Manufacturing Industry

Before smart manufacturing, Malta was already a leading manufacturing centre with competitive tax rates and strong economy.  The manufacturing industry in Malta accounts for over 11% of the island’s workforce and 10% of the GDP as the industry continues to attract high quality production. Malta has seen investors establish their business or a business unit in Malta as a result of the island’s attractive legal environment, favourable export infrastructure, and skilled and English-speaking workforce.  The jurisdiction has also implemented an attractive framework that allows for the cheap and easy process of importing, assembling and exporting manufactured parts. In addition, the country’s position within the EU, as well as close proximity to the Middle East and Africa, continues to see industry giants in specialised engineering, sciences, and electronics relocate to the island, such as Playmobil, Toly Products, and Methode Electronics. Malta has 10 industrial parks run by a dedicated agency to home the increasing number of production plants and R&D facilities.   To date, the manufacturing industry is the second largest in Malta, and set to keep on growing. 

Smart Manufacturing Webinars

Malta is seeking to be the leading jurisdiction for technological innovation and high-value manufacturing and believes in adapting to increased technological advancements. As UK based businesses seek post-Brexit strategies to safeguard their market position, Chetcuti Cauchi Advocates has organised webinars dedicated to the smart manufacturing industry in Malta. The webinars covered different aspects related to business relocation and expansion, based on the firm’s sound expertise in assisting companies with their international corporate expansion. For more information and to watch the webinars: click here!

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