Economic Growth and Over Crowding

Following the current debate in Malta about the economy soon needing some 800,000 people by 2040 to sustain the current growth rates. I have reflected a bit about how Malta can focus on changing the current ways of working to achieve growth, without a proportionate increase in employment. Quality of life is more important than growth, and I cannot foresee any quality of life with 800,000 people living on this tiny, condensed island.??

I do not claim to be an expert in this field, but I am very interested in this debate, and I would like to kick off conversations that focus more on the repercussions on our youth and on the way we can prepare them for work, rather than any political ping pong.?

I am starting with the premise that economic growth typically relies on increased productivity, technological advancements, and efficient allocation of resources. Therefore, while employment plays a significant role in an economy, it is not the only factor that drives growth.??

To shift away from this proportionate increase in employment, we need to focus on technological advancements through increased investment in innovation and ideas. We need to invest in automation to improve efficiency, allowing companies to generate and produce more without additional employment. Moreover, we must increase the investment in infrastructure, equipment, and machinery to enhance productivity. Every job can be done better and faster with state-of-the-art tools, producing a better result with less employment, or at least without increasing the head count.?

My next argument is that an economy can experience growth by specialising in producing goods and services in which it has a comparative advantage, and engaging in international trade. Thus, we need to specialise in what we are good at and what is ideal for small, overcrowded countries, while trading for goods we cannot produce efficiently, barring goods and services of critical importance, such as farming and the food industry.?

We have been transitioning to a knowledge-based economy, where industries rely on intellectual capital, and this needs to continue and further accelerated as these industries can spur growth and revenue without a substantial rise in employment. Industries such as software development, research and development, and digital services often require highly-skilled individuals who can contribute to economic growth, without creating a large number of jobs, or at least these can be based internationally.?

It is noteworthy that automation and efficient productivity are not only achieved through better technology, but also through better management practices, training programmes, and process optimisation. These are important, as they can lead to economic growth, without a direct increase in employment. In other words, if existing workers are more efficient and effective, the economy can produce more output with the same workforce.?

Apart from the shift to a knowledge-based economy, we must also focus on the service sector. The service sector can grow without requiring as much labour as traditional manufacturing sectors.??

One also needs to ensure that we consider all social implications when focusing more on highly-skilled jobs and automation, as we need to ensure that the benefits of growth are shared, and address any inequalities that might arise. One argument one can make is that low-skilled workers are critical for any growth, so we need to keep increasing employment to sustain the economy. However, there are initiatives we can look into, to reduce the volume required, as the infrastructure, the building stock and roads cannot keep up with the growth in population in such a small space.?

By investing in automation and technology, we can streamline processes and reduce the need for additional human resources. Low-level jobs that involve repetitive tasks or manual labour can be automated, allowing existing employees to focus on more complex and value-added responsibilities. For example, self-checkout systems in retail stores reduce the need for additional human workers in certain roles.?

We need to invest in the workforce by providing training and upskilling opportunities to the existing workforce so jobs are done more effectively. This approach ensures that existing human resources are utilised more efficiently.?

Apart from reskilling and upskilling, we often hear arguments that the existing resources are not allocated in the most efficient way. Many argue that the private sector is struggling for resources while the public sector is over-resourced. Apart from that, even within organisations, we must ensure proper and top-quality workforce management practices, such as optimising schedules, implementing flexible working arrangements, and improving task allocation. These solutions would help to ensure that existing employees are effectively utilised rather than hiring new ones.?

Additionally, organisations must be creative and entrepreneurial to redesign tasks and optimise processes. By reevaluating job roles and responsibilities, organisations can eliminate redundancies, streamline processes, and improve efficiency.???

Furthermore, as I argued earlier, the country should focus on specialisation; the same applies to organisations. By outsourcing and contracting, businesses can partner with external service providers or contractors specialising in specific tasks. This allows organisations to fulfil their operational needs without directly employing more people. Thus, once again reinforcing the idea that the workforce is set up for maximum efficiency and doing what they are good at and effectively distributed amongst organisations. However, it is vital to ensure that workers in outsourced or contracted roles are treated fairly and appropriately.?

There might be disagreements on some of the points mentioned here and on the different models we need to adopt. However, one thing is undoubtedly clear; we must invest in our workforce and our youth from an early age to ensure they succeed in this global economy, by giving them the opportunities to explore what they want to do and what they are good at. They need to be given time and space to be creative and critical. ?

We need to instill an entrepreneurial mindset in a broader spectrum of people in our community, from politicians to educators, from senior to junior levels. We need more people to be constantly looking out for solutions, innovations, and improvements. We cannot keep doing what we have been doing, as the world requires a new mindset. One which is more inclusive and more sustainable, as growth, on its own, is not the be-all and end-all. Let us move away from greed and personal gain to a better quality of life and community spirit.??