Family-owned businesses are the beating heart of any developed economy, and Malta is no exception.
Some 4,000 family-owned businesses on the Maltese Islands, making up approximately 70% of total business. It is no surprise that they are regarded as being the backbone of the economy.
Family businesses create jobs
iGaming, Financial Services, Pharma and others make up the bulk of Malta’s economic model. However, other businesses and services are needed to service this economic model. That is where family businesses are crucial to the economy as they create employment opportunities.
Not everyone studies to become an I-gaming expert. Family businesses create jobs ranging from highly specialised to medium and low skilled. They allow the local population to branch out and find employment, not in highly specialised niche areas.
This is especially important when the economy takes a dent because there is something to fall back on. These jobs are also essential to create growth and fuel the economy when times are good.
Successive governments have constantly hammered home this point – family businesses and their successes are partly but directly responsible for Malta’s low unemployment rate. This is why incentives have always been created to foster further investment in the family business sector.
Maltese family businesses have evolved significantly since the country joined the European Union in 2004, highlighting another fundamental characteristic – flexibility. Many Maltese family businesses now export to the massive EU common market.
But there are challenges ahead. Statistics show that while family businesses traditionally passed the torch to younger generations which took over, this is happening less and less.
The diversity and different sizes of family businesses
One of the most important things about family businesses is the diversity of their operations in Malta’s multi-faceted modern economy. However, to service the cutting-edge economic activity, the country needs many business sectors, including supermarkets or health spas, to mechanics and tax advisors.
There is often a misconception that family businesses are always small in size. This is not the case. When looking at figures listed by the National Statistics Office, it becomes clear that there are cottage family businesses, small to medium-sized companies, and large ones.
A study by Price WaterHouse Coopers found that 68% of family businesses measured success by results not strictly relating to profit and growth.
Diving deeper into the study, it becomes apparent that Other factors drive Maltese family businesses. These include social commitments, traditional family values, and the ability to give back to the community, particularly locally based.