Malta’s Business Legacy at Risk: Can We Save Our Entrepreneurs’ Lifework?

Imagine this: Malta’s bustling Republic Street, lined with historic buildings now housing thriving businesses. Now, picture these businesses closing down, one by one, as their founders retire or pass away, taking with them decades of knowledge and investment. This isn’t a distant dystopia; it’s a very real threat facing Malta and Europe today.

Europe’s Aging Entrepreneur Problem

Across Europe, entrepreneurs are aging. According to the European Commission, the average age of business owners is 50, with many in their late 50s and early 60s. In Malta, where the average age is even higher, this trend is particularly concerning. These entrepreneurs have built their businesses from the ground up, creating jobs, contributing to the economy, and shaping our communities.

But what happens when they’re gone? A study by the European Investment Bank found that only 20% of family businesses survive into the second generation, and just 3% make it to the third. This isn’t due to lack of succession planning, but rather a complex mix of factors, including lack of interest from family members, lack of suitable replacements, and inadequate preparation for leadership transition.

Malta’s Unique Challenges

Malta faces additional challenges. Our small size means many businesses are closely tied to personal relationships and local networks. When a founder leaves, these networks can crumble, taking the business down with them. Malta’s strong family culture can make it difficult to bring in external management, even when necessary.

Then there’s the issue of skills. Many founders started their businesses in an era when certain skills were less valued or even non-existent. Today’s digital age requires a different set of skills, and not all founders have the time or inclination to learn them. This can leave their businesses ill-equipped to face the future.

What Can Be Done?

First, we need to talk about it. We need to break down the taboo around succession planning and make it a normal part of business conversation. We need to encourage entrepreneurs to think about the future of their businesses, not just the present.

Second, we need to support entrepreneurs in developing their businesses for the long term. This could mean helping them diversify their product or service offerings, modernize their operations, or even expand internationally. It could also mean helping them develop a strong management team that can carry on the business when they’re gone.

Third, we need to foster a culture of entrepreneurship that values innovation and risk-taking. This means encouraging young people to start their own businesses, and providing them with the support they need to succeed. It also means creating an environment where businesses can grow and adapt over time.

Let’s not wait until it’s too late. Let’s not let Malta’s businesses perish with their founders. Let’s ensure that the entrepreneurial spirit that has built our economy continues to thrive for generations to come.