Post on 02-Jul-2015
transcript
C. V. Sarath
Nitten Nair
Peters Anyanmu
TO REDUCE THE LEVEL OF UNEMPLOYMENT IN MALTA
INTRODUCTION
Unemployment is a very serious problem in the world as each government
strives hard to reduce the level of unemployment in its country through
various measures like labor polices and the encouragement of foreign
investor. This is as a result of the fact that unemployment leads to economic
hardship in a country which in turn reduces the standard of living in that
country.
According to international labor organization definition, unemployment
occurs when people are without jobs and they have actively looked for work
within the past four weeks.
Until date, there has remained a serious theoretical debate as to regarding the
cause of unemployment in the world. One of such radical schools of thought
which have contributed to the cause of unemployment, is the Marxist school
of thought, propounded by the great economist Karl Marx, who blamed
unemployment on capitalism, the struggle between the proletariat and the
bourgeoisie and therefore advocated for a socialist economy as the way out.
The economic crisis that faced the world in the past few years has lead to the
an increase in the level of unemployment in most countries of the worlds
including Malta, which recently joined the EU and happens to be one of the
smallest countries in terms of size and population in the EU.
Irrespective of its size and population, the level of unemployment in the
country cannot be said to be the lowest in Europe and this happens to be of a
great concern. According to the Time of Malta of 1st February 2011,Malta is
ranked 14th in EU jobless list released in Brussels, with seven percent (7 per
cent), against other European countries like Denmark who is ranked lowest
with (3.2 per cent), the Netherland (3.6 per cent), Estonia (4.3 per cent),
followed by others.
This position occupied by Malta, is something of concern which is why we
are focusing on how to come up with measures to tackle the problem of
unemployment in the country and to close the gap between other European
countries like Denmark. This brings us to the problem of our thinking which
is how to further reduce the level of unemployment in Malta.
THE PROCESS
FRAME WORK
Stage 1 - Mess Finding:
The position occupied by Malta in the EU jobless list according to the Times
of Malta of 1st February 2011, is a thing of serious concern irrespective of
the fact that Malta improved over the last few months. Occupying the
position of 14th in EU jobless list still remains a serious issue when looked at
in comparison to the small population of the country.
While other countries like Denmark are ranked lowest in the list, this has
resulted to a serious concern which has prompted the need to come up with a
plan of action in other to tackle this problem and improve our position not
only in EU, but also in the world at large.
In other to direct all attention towards the aim of our thinking, and to channel
resource both human and material towards its actualization, one of the DATT
thinking tools AGO, was applied in this stage in other to make the objective
know to every body involved, which is the reduction of unemployment rate in
Malta and to strive towards becoming among the third less unemployed
countries in EU by the next five years. This will lead to improvement in the
standard of living of the people, per capita income and also in the reduction
of the crime rate, homeless ratio and government expenditure for the support
of the same class of society.
Stage 2 - Data finding:
At this stage of the thinking process, we are going to do a divergent thinking
to enable use gather all the necessary information related to the problem at
hand and in other to make sure nothing is left out and list out all the facts
related to the situation at hand. The CAF tools will be used to consider all the
factors that play a role in causing unemployment in Malta.
One of such causes of unemployment in Malta
could be attributed to the fact that Malta is a
small island which major source of internal
revenue is tourism which is seasonal. This is a
major player in the cause of unemployment in the
country as most people are out of job when the season is over, as most hotels
and bars who are the main employer of labor tend to close down due to lack
of patronage as a result of the bad weather(winter). This has significantly
contributed to the cause of unemployment in the country as most people
become jobless this period as a result of the drop in the demand for labor
force.
Also, the European labor law which allows any member of any European
country to work in another European country has also contributed to the level
of unemployment in Malta as most people from other European countries
come to Malta to seek for job opportunity, there by taking the place of
citizens. This free labor policy introduced by EU has greatly contributed to
unemployment in the country to the extent that some international companies
located in the country mostly bring their staffs from their home country to
come and work in the country in other to reduce cost of recruiting and
training, this is possible, due to the flexible labor law in the European Union.
The favorable climatic condition of the island has also contributed to the in
flock of migrant due to its warm weather most people tend to relocate to the
island in other to enjoy a better climate, by so doing they seek for
employment thereby increasing the labor market and making it more
competitive. As employers of labor try as much as possible to minimize cost
by hiring those workers that already have experience in the field in other to
avoid extra cost in training. This situation tends to put those citizens who
dose not have the qualification needed due to lack of education or training in
the list of the unemployed thereby increasing the level of unemployment in
the country. So the good climatic condition of the island could be seen as a
blessing in some ways and also a player in the unemployment rate due to the
relocation of more people to the island.
The lack of foreign investors has also contributed to unemployment. Statistics
shows that ninety percent of companies in Malta are made up of SME (small
medium enterprises); these organizations are one of the smallest employers of
labor due to its smallness in size. The lack of foreign investors has greatly
contributed to lack of jobs in the country as the SME; s which makes up the
larger company could only employ few workers.
Finally, the geographical location of Malta also has role to play in causing
unemployment in the country. This is so because the lack of free movement
within and out side the country due to it location in the middle of the sea,
makes it difficult for the free movement of goods and service within other
neighboring countries, as the means of transportation is more expensive
compared to when using other means like road. All this factors as listed has
being seen to be the major player in the cause of unemployment in the
country and any solution to the problem would have to approach this
problems.
Stage 3 -Problem finding:
At this stage we decided to use the PEST analysis as this will give us a
complete understanding of the present situation that has enveloped the
country. The PEST analysis on the other hand will give a broad perspective
with regards to the socio-political aspects that govern the current prevalent
situation.
As this stage concerns with only the problems, we will be looking only at the
negative implications of all the factors that make up the PEST.
ECONOMIC
Lack of incentives for setting up manufacturing industries.
High tax rates for entrepreneurs
High fines for offenders
Lack of incentives for capital investment
Susceptible inflation rates
Change in exchange rate after change of currency
Fluctuating levels of consumer confidence
High variation in disposable income
Spending priorities of the government
Absence of self sufficiency
High costs of labour
POLITICAL
The government not encouraging Foreign Direct Investment.
Government spending is not directed towards increasing employment
opportunities
Competition regulations are non existent
International Trade Regulations
No law on citizen employment regulations(certain percentage of
employees must be from the local work force) for foreign companies
Environmental regulations prevent setting up of companies near
heritage spots
Government has displayed a relaxed attitude towards the manufacturing
industries.
Lack of stricter measures to prevent the entry of illegal immigrants
SOCIAL
Income distribution is highly uneven resulting in fewer entrepreneurial
ventures
Youngsters preferring to leave the country resulting in lack of young
inexperienced labour force to meet demands of a new project.
Ease of movement within the EU prompting immigrants to enter and
saturate the workforce
Increasing number of single households and single parents
Lack of a big/joint family concept
General attitude towards work and leisure
Too many graduates in the arts resulting in over demand for related jobs
Lack of highly technically qualified professionals hindering new
projects
Lack of initiative among the locals
TECHNOLOGICAL
Lack of facilities for new research leading to new technologies
Isolation from mainland Europe
Less frequency of transport to communicate with the rest of the world
Rate of technological obsolesce is low
Slow rate to accept and adopt newer technologies
High cost of electricity, power and fuel
High cost of raw materials
From this list of various problems, we now select and sort out the most
important ones to proceed towards the next stage of the framework. The most
important among the above mentioned would be:
The government not encouraging Foreign Direct Investment
High cost of electricity, power and fuel
Too many graduates in the arts resulting in over demand for related jobs
Slow rate to accept and adopt newer technologies
Lack of stricter measures to prevent the entry of illegal immigrants
Lack of facilities for new research leading to new technologies
Stage 4 -Idea finding:
Now that we have all the major problems listed out, its time to do some
divergent thinking and come up with solutions for the immediate problem
and in turn find a solution to the final question at hand.
For this idea generation stage, we felt that the CONCEPT FAN would be a
very useful tool as it will lead us to think in many different directions without
losing sight of the actual problem. The concept fan is based on the principle
of a broad question to which a few focal points are assigned and ideas are
generated based on the focal points.
This method is particularly useful when we need to look at various
perspectives to a single problem. Here, we now use the shortlisted problems
faced by Malta based on the PEST analysis to come up with solutions. The
broad question will be the individual problems and the fixed points and ideas
will be generated based on that.
BROAD QUESTION I
The government not encouraging Foreign Direct Investment
The government not encouraging Foreign Direct Investment
Open up markets to foreign investors
Tax rebates for investors in select industries
Incentives and friendly regulations
Government protection and security for investors
Establishment of free zones
Businesses started in parts of Malta, Gozo and Comino could have exclusive rights
Any person of any nationality can start a business without having to be in partnership with a Maltese or EU citizen
Relaxed government regulations in select areas of the country
Lower the market entry barriers
Relax the trade license requirements
Relax the procurement and production laws
Promote free trade even more
BROAD QUESTION II
High cost of electricity, power and fuel
High cost of electricity, power and fuel
Alternative sources of energyLong coastline can be used for the generation of hydel power
projects
Wind energy can be harvested due to strong winds
Nuclear energy plants and research facilities can be set up
Reduce exporting of fuel
More available and structured public transportation
More focus on available natural resources
Promote eco friendly products
BROAD QUESTION III
Too many graduates in the arts resulting in over demand for related jobs
Too many graduates in the arts resulting in over demand for related jobs
More professionally oriented courses
Technical based subjects to be emphasized on in school
Higher government incentives for students in professional courses
Encourage vocational courses and polytechnic fields of study
Campus placement
Tie ups between the university and major international companies for recruitment
Compulsory international internship for all courses
Job fairs and Job expos on campus
Career/course guidance
Aptitude tests in schools
Common entrance exams for entry into university
Encourage students to participate in programs like ERASMUS etc
BROAD QUESTION IV
Slow rate to accept and adopt newer technologies
Slow rate to accept and adopt newer technologies
Increase exposure through televisionIntroduce new international channels through
cable pkg
Easier availability of satellite television
Introduction of a European career channel
Increase global awarenessInternational newspapers should be made
available locally
Encourage debates and discussions of international incidents more common in schools
and colleges
Encourage public forums and student bodies to be more active
Increase awarenessSimultaneous launch of product with the rest of
Europe
Encourage starting of production units in the country
Educate the public about new products and services
BROAD QUESTION V
Lack of facilities for new research leading to new technologies
Lack of facilities for new research leading to new technologies
Role of the University
Provide stipends for research conducted
Encourage a research friendly environment
Provide state of the art modern research labs
Role of government
Government initiated studies into marine wildlife
Government grants for research in technology
Government sponsored research and development zone
Outside factorsEncourage companies to base their research centers
in Malta
Invite academics and researchers to set up study here
Stronger Intellectual Property rules and easier patent options
BROAD QUESTION VI
Lack of stricter measures to prevent the entry of illegal immigrants
Lack of stricter measures to prevent the entry of illegal immigrants
Active Coast Guard
Encourage youngsters to join the Coast guard/ Navy
Increase the workforce presently employed
More co operation between the various departments
Stricter punishments
Instant deportation
Imprisonment for employers who employ without valid work permits
No tolerance policy against offenders
Amnesty
Have amnesty portals twice a year for the illegal aliens to leave without punishment
Discourage asylum
Introduce NGO’s like Amnesty International to have an active presence in the country
It is now time to introduce convergent thinking once again to find out which
of the ideas generated can actually be put to use to help solve the question of
unemployment in Malta. The following are the ideas that are most suited to
solving the problem.
The possible solutions:
Tax rebates for investors in select industries
Relax the procurement and production laws
Businesses started in parts of Malta, Gozo and Comino could have
exclusive rights
Long coastline can be used for the generation of hydel power projects
Nuclear energy plants and research facilities can be set up
Encourage vocational courses and polytechnic fields of study
Tie ups between the university and major international companies for
recruitment
Simultaneous launch of product with the rest of Europe
Encourage starting of production units in the country
Provide stipends for research conducted
Government grants for research in technology
Government sponsored research and development zone
Invite academics and researchers to set up study here
Stronger Intellectual Property rules and easier patent options
Encourage youngsters to join the Coast guard/ Navy
Imprisonment for employers who employ without valid work permits
Have amnesty portals twice a year for the illegal aliens to leave without
punishment
Stage 5 -Solution finding:
With the present list of possible solutions, it is now time to shortlist and come
up with definite solutions for the same.
For this process we have decided to use a WEIGHTED GRID ANALYSIS to
analyze and come to a conclusion about the same.
The factors on which the weight is assigned are:
Ease of implementation
Time to achieve results
Financial implications
The probability of achieving results
Also, the weights are assigned in the following pattern:
3 = most conducive
2 = conducive
1 = less conducive
0 = least conducive
FACTORS/SOLUTIONS EASE OF TIME FINANCI RESULT TOTAL
IMPLEMEN
TATION
FOR
RESULTS
AL
IMPLICA
TIONS
PROBABI
LITY
Tax rebates for investors in
select industries2 2 1 3 8
Relax the procurement and
production laws 2 1 1 3 7
Businesses started in parts of
Malta, Gozo and Comino could
have exclusive rights3 3 2 3 11
Long coastline can be used for
the generation of hydel power
projects1 2 2 3 8
Nuclear energy plants and
research facilities can be set up 0 1 0 3 4
Encourage vocational courses
and polytechnic fields of study 3 2 2 2 9
Tie ups between the university
and major international
companies for recruitment2 2 3 3 10
Simultaneous launch of product
with the rest of Europe 1 2 3 2 8
Encourage starting of 2 2 3 2 9
production units in the country
Provide stipends for research
conducted 3 2 3 2 10
Government grants for
research in technology 3 1 2 2 8
Government sponsored
research and development zone 3 1 1 2 7
Invite academics and
researchers to set up study here 2 2 3 1 8
Stronger Intellectual Property
rules and easier patent options 2 1 3 2 8
Encourage youngsters to join
the Coast guard/ Navy 2 2 3 1 8
Imprisonment for employers
who employ without valid work
permits3 3 3 3 12
Have amnesty portals twice a
year for the illegal aliens to
leave without punishment2 2 3 3 10
Based on the Weighted grid analysis, it is clear that the best solutions to
tackle our problem are as follows:
Tax rebates for investors in select industries
Businesses started in parts of Malta, Gozo and Comino could have
exclusive rights
Long coastline can be used for the generation of hydel power projects
Encourage vocational courses and polytechnic fields of study
Tie ups between the university and major international companies for
recruitment
Simultaneous launch of product with the rest of Europe
Encourage starting of production units in the country
Provide stipends for research conducted
Government grants for research in technology
Invite academics and researchers to set up study here
Stronger Intellectual Property rules and easier patent options
Encourage youngsters to join the Coast guard/ Navy
Imprisonment for employers who employ without valid work permits
Have amnesty portals twice a year for the illegal aliens to leave without
punishment
Stage 6 -Acceptance finding:
For the 6th and final stage of the framework, to gain acceptance of the
framework, we have decided to use a short sequence of the 6 thinking hats.
This is mainly to get a general feeling and acceptance about the solutions that
have emerged and its probability of success.
The sequence results are as follows:
YELLOW HAT
Practical and feasible ideas
Not too investment heavy in total
Results can almost be guaranteed
Implementation will not be a problem
Will not result in any communal or social disturbance
Environmentally not harmful
Steady change can be observed
RED HAT
Feel that the proposed ideas are very good
BLUE HAT
The findings will be put into practice at the earliest
CONCLUSION & REFLECTIONS
From the above process that was applied for creating solutions for reducing
the level of unemployment in Malta, we have concluded with many feasible
options that can be looked upon for resolving the issue.
To increase the employment ratio the government has to take a stance and
come with investments and boost federal infrastructure spending. Cut taxes
for investors from small to big companies. Encourage industries to set-up the
production units, this will help in the generation of more employment and
boosting more exports – giving more economic stability. Government grants
for research and expanding exponentially in the quality, quantity of
technological advancements. Expansion of costal navy and army will also
increase the growth.
The CPS method used as the framework for the process, helped for creation
of more no of ideas and views in every stage which later converged into more
specific solutions for the problem. We used some of the DATT tools like
CAF in the Data Finding for taking into the consideration all the factors that
will give more input for gathering information.
In Problem Finding, we decided to use the PEST tool as it helps us in seeing
the important criteria’s that are involved with the issue of unemployment
from the political, social, economical and technological point of view.
In Idea Finding, we used the Concept fan as we took each broad concept that
was based on the PEST analysis. This helped into diverging into fixed points
which generated more ideas, revolving upon one single issue.
When we converged towards the idea finding end, we got many solutions
which can be implemented. In Solution Finding, we took The Weighted Grid
Analysis to evaluate each and every idea. The factors - Ease of
implementation, time to achieve results, financial implications and
probability of achieving results which helped into finding solutions specific
and feasible.
In Acceptance finding, we used a short sequence of Six Thinking Hats to
discuss the general feeling and solutions for the solutions that we have
reached to. And we have concluded that the whole framework worked very
well in reaching solutions to decrease unemployment level in the Malta.