Malta’s businesses invest €1.1bn in innovation between 2022 and 2024

Malta’s business sector recorded an estimated €1.1 billion in expenditure on innovation between 2022 and 2024, according to new figures published by the National Statistics Office (NSO).

The findings form part of the Community Innovation Survey, which examined enterprises employing 10 or more persons during the three-year period.

The survey found that 1,356 enterprises, equivalent to 43.4% of those surveyed, engaged in some form of innovation activity.

Of these, 570 enterprises undertook both product and business process innovation, while 562 focused exclusively on business process innovation. A further 145 enterprises were engaged solely in product innovation, and 79 reported carrying out research and development (R&D) or other innovation activities.

Innovation expenditure excluding R&D accounted for the largest share of total spending, reaching €921.4 million, or 85.4% of overall expenditure. Intramural R&D expenditure amounted to €96 million, representing 8.9%.

Manufacturing businesses accounted for the majority of innovation expenditure, representing 66.6% of the total. Information and communication enterprises followed with 14.2%, while wholesale and retail trade, together with the repair of motor vehicles and motorcycles, accounted for 4.3%.

Despite the scale of investment, cooperation between innovative enterprises and other organisations remained relatively limited.

The NSO reported that 17.8% of innovative enterprises had at least one cooperation arrangement with another business or organisation. Among those enterprises, 52.3% cooperated with private business enterprises operating within the business sector.

The figures also showed that intellectual property protection was used by a minority of businesses. Some 373 enterprises or 11.9% of those surveyed, applied for an intellectual property right or licence.

Trademarks were the most common form of intellectual property application, with 237 enterprises applying for a trademark only. Meanwhile, 75 enterprises applied for more than one type of intellectual property right, while 34 relied exclusively on trade secrets.

The survey highlighted differing reasons why enterprises did not pursue further innovation.

Among innovative enterprises, 40.6% said they did not feel the need to introduce additional innovation activity. However, 23.5% identified a lack of resources as a factor limiting further innovation.

Among non-innovative enterprises, the majority, 80.2%, said innovation was not needed. A smaller proportion, 4.6%, cited a lack of resources as the reason for not undertaking innovation activities.

Access to funding also played a role in business innovation. The NSO found that 25.3% of innovative enterprises successfully obtained either equity or debt finance.

Of these enterprises, 33.8% indicated that they had partly or fully used the funds for research and development or other innovation activities.

Environmental considerations were also reflected in innovation activity. Nearly one-third, or 32.8%, of innovative enterprises introduced innovations aimed at reducing energy use or their carbon dioxide footprint.

A similar proportion, 31.4%, introduced innovations involving the recycling of waste, water or materials for their own use or for sale.

The survey further found that 37.7% of all enterprises formed part of an enterprise group.

Among these, 66.6% had their head office located in Malta. The remaining groups had headquarters in the European Union (15.5%), EFTA countries (1.2%), or elsewhere in the world (16.7%).