Adapting smart specialisation to a micro-economy – the case of Malta

Abstract

Purpose – The purpose of this paper is to set out the process by which a smart specialisation strategy was developed for a small, peripheral economy in the European Union, the Republic of Malta. It assesses the applicability of the approach in the context of a micro-economy with an industrial structure based on a small number of foreign direct investments and a predominance of micro-enterprises. Design/methodology/approach – The paper follows an action research approach by presenting as a case study the process by which the strategy for Malta was assessed and developed through successive rounds of engagement with business and other actors with the application of scenarios and other prioritisation approaches to facilitate its development. An initial consultation with 20 public sector and representative organisations was followed by a general business workshop and 21 sectoral focus groups. Findings – Lack of critical mass can be mitigated by maximising the generic use of available skills and competences. Given the higher vulnerability to external shock in micro-economies, strategies need to have a high degree of flexibility and adaptability. Greater internationalisation provides the main response to peripherality. Practical implications – The approach can be applied more generally for micro-economies and in some aspects to other countries or regions lacking critical mass in research and innovation assets or facing peripherality. Originality/value – The smart specialisation approach had not been applied in these circumstances and hence the findings allowed the concept to be extended and adapted to deal with the issues raised.