SPEECH BY THE HON. JOSEF BONNICI, MINISTER FOR ECONOMIC SERVICES, AT THE OPENING SESSION OF THE CONFERENCE ON INTERNATIONAL MARKETING IN THE DIGITAL ECONOMY, ORGANISED BY METCO

Distinguished Guests, Ladies and Gentlemen,

I am very pleased to inaugurate this conference which deals with such an important topic, and trust that these regular opportunities to focus on marketing issues are sustained in the future. May I also congratulate METCO on their initiative in organising this conference.

A new world-economy has been emerging, and it is this economy that we refer to when we speak of globalisation of international trade. Globalisation has the potential for substantial benefits but it still represents a significant challenge to governance, at both the national and the international level. To give one clear example, governments must acknowledge the challenge in managing electronic transactions facilitated by new digital technologies. An increasing number of global markets have only the most tenuous relationship to geographical territory.

As far as Malta is concerned, we must reiterate the fact that the Maltese economy is obliged to continue restructuring to sustain and improve its international competitiveness. Therefore, the Maltese economy, in order to maintain the momentum of its own development, needs to reform itself and further adapt itself to a more liberalised market system.

We are at the dawn of the electronic era, but the underlying power behind the host of emerging digital technologies and applications has already started – particularly in the past decade – to dramatically influence the pattern of international trade.

It is a fact that many countries around the world are implementing policies, which acknowledge that there is now a global trend towards market mechanisms, and therefore, the respective industries are compelled to restructure and globalise themselves. Globalisation will continue to bring about both positive and negative effects on industrialised economies, and these countries are requested to come up with various solutions to cope with such positive and negative implications.

There can be no doubt that globalisation is a phenomenon that will inevitably continue. Across the global arena, one sees trade barriers being systematically dismantled. It is clear that the days of closed economies are a thing of the past. The perceived opportunities and threats of borderless electronic commerce have contributed significantly to this change.

Today, the association between the cost, range and quality of a country's telecommunication and information services, is stronger than ever before. The extent of growth of e-commerce will in time become a tangible manifestation of this correlation.

I think, however, that it would be useful in the context of our discussion, to make three very general observations.

Firstly, that electronic marketing and transaction of physical goods has to be backed by appropriate storage facilities and distribution channels. It is rather pointless to conclude a transaction at the stroke of a key, if the distribution channels for the delivery of the required products are expensive, inefficient, and subjected to bottlenecks.

Secondly, some of the products and services traded by means of electronic media are digital in nature. In other words, information itself has become a commodity and the provision of timely multimedia information services is an emerging industry. This highlights the importance of having a supporting legislative infrastructure for e-commerce which strikes the delicate balance between preserving the commercial value of information as a resource, whilst protecting an individual's right to privacy by ensuring appropriate access to information.

Finally, one should keep in mind that a healthy e-commerce sector presumes a healthy commercial sector – electronic media merely extend the scope and range of our markets and the way to address them. At the end of the day, one can only sell a product or service if it is competitive in price and quality and addresses demand in a timely fashion.

To sum up, it is crucial that the adoption of new technologies is matched with a fundamental reengineering of our business processes. The ability to market, purchase and sell products and services electronically provides a tremendous opportunity, but is rendered ineffective unless sustained by physical facilities, appropriate legislation and an economic climate that encourages innovative ventures to flourish.

In other words, we may find that the ‘e' in e-marketing may prove to be the ‘easy' part when compared with the challenges ahead of us to create the right economic climate and systems of governance for e-commerce to flourish.

At the start I mentioned the probable degree of success in forging partnerships between public and private entities providing a measure of the socio-economic value of technological innovation.

Indeed as one moves up the value chain to focus on quality, efficiency and reliability in the provision of niche products and services, it becomes more important that all stages of provisioning, production, promotion, monitoring and delivery, function in an integrated fashion to yield competitive one-stop points of service. This implies that public and private entities have to work in tandem to re-engineer business processes to exploit the opportunities which e-commerce will provide.

An e-commerce culture will not tolerate any bottlenecks. It will also only serve to strengthen the social texture both within and between nations, if a successful balance between public and private interests is established in our systems of governance.

Forward-thinking companies that recognise the value of e-commerce, and adopt appropriate strategies, are positioned to become leaders in their respective industries. I believe that from an investor's perspective, individuals have a rare opportunity to capitalise on a whole class of business that has opportunities for strong growth in the years to come.

As the digital economy grows, so too will the growth opportunity for Maltese investors. Investment opportunities will be plentiful with mounting interest in the digital economy and its wealth-creating potential.

Our objective must continue to be that of unleashing the potential of our resources towards meeting the challenges ahead. Government's role must continue to be limited to the implementation of facilitative policy measures rather than interventionist initiatives. Many of our domestically oriented businesses admittedly need national support as they identify and implement the necessary structural changes.

Indeed, Government has amply demonstrated its commitment to foster and attain a national environment that encourages our participation in the digital economy. The liberalisation process of the telecommunications sector, the proposed legislative framework for information practices and, more recently, the vision and strategy for the attainments of e-Government are cases in point. Government intends continuing along this trend to create a climate that encourages innovative economic ventures – this is a prerequisite if Malta is to carve a sustainable niche in e-commerce.

Electronic commerce is the most significant phenomenon to have erupted in the global economic arena during the last decade. The unprecedented rate and scale of change that e-commerce has brought about in the way enterprises and nations do business with each other, marks it as one of the most important challenges we face on the brink of the new millennium.

I am all too conscious of the fact that participating in e-commerce is not merely an alternative economic avenue one may choose to either explore or ignore. Across the world, trade barriers are being systematically dismantled, making it clear that the days of closed economies dominated by monopolies are virtually over.

Electronic commerce is both a manifestation and productive factor of the globalisation that is inevitably taking place at this turn of the millennium. But it is one of those universal phenomena that only present themselves in highly individual national forms. It is, therefore, in both aspects of its paradoxical nature that e-commerce has to be considered.

Most of this consideration, as well as the action that must be taken as a consequence of this consideration, has to be carried out by the business sector itself, as the main protagonist of commercial life both internationally and intranationally.

It is worth noting that commercial competitiveness, be it electronic or otherwise, will ultimately rest on an enterprise's ability to continually redefine its business practices in order to meet the fluctuating needs of an integrated market. At the end of the day, a solid and efficient business operation that will ensure quality and efficiency in the goods or services that it offers must back an electronic commercial transaction.

In this context, we must continue to capitalise on Malta's competitive advantages as a commercial hub. Our strategic location in the Mediterranean, enhanced by our Freeport and air cargo terminals, and matched by state-of-the-art information and communication systems, provide us with an opportunity to position ourselves as an efficient e-commerce distribution gateway to the Euro-Mediterranean electronic neighbourhood.

Electronic media merely extend the scope and range of our markets and the way to address them. At the end of the day, one can only sell a product or service if it is competitive in price and quality and addresses a demand in a timely fashion.

I can sum up my message to you in one phrase: public-private partnership is the key to the development of a prosperous e-commerce sector.

With the public and private sectors working in tandem, I have every confidence that we will succeed in the new age just opening in the commercial history of our country and the world.

I also have no doubt that this conference will help us map out the road ahead, alerting us to pitfalls and opportunities, and in the process, removing at least some of the doubts and difficulties which the digital economy is fashioning.

Finally, I wish to applaud and commend METCO's proactive role in the launch of the Export Marketing initiatives as these play a complementary role in promoting awareness of the opportunities and issues surrounding electronic commerce.

I wish you a very successful conference.