An answer to US $ 3bn question: How can Sri Lankan IT industry grow?
From：Taipei World Trade Center Liaison Office In Colombo
Sri Lanka has immense potential to build itself as a destination for tech products and services, with the ICT/BPM industry being its fifth highest foreign revenue generator.
In 2016, the industry aimed to generate US $ 5 billion per year by 2022. But by 2019, the country realised it wasn’t on track to achieving this target and revised this goal in 2020 to US $ 3 billion by 2025, which is equally ambitious.
In this context, there was a need to identify factors affecting growth and develop a researched model to help steer industry development, towards which a study was conducted.
It noted that most IT companies were impacted by recent turbulence in Sri Lanka, such as the Easter attacks, causing foreign investors and clients to lose confidence and lowering sales. Hence, maintaining stability in Sri Lanka is vital to growing the ICT/BPM industry.
The study further identified that Sri Lanka’s brand as an IT destination has great potential and should be strengthened. However, qualitative findings show that the ‘Island of Ingenuity’ branding effort has been a failure.
It also pointed out that companies need to invest in their global sales and marketing, while industry bodies must facilitate entry into new markets. Although government assistance is required, it’s important to note that such efforts require funding at both macro and micro levels.
But obtaining new clients is only one part of the equation. Ensuring impressive service levels and branding appropriately, while revamping the education system to encourage more people to join the industry, are also vital components.
For the local IT industry to grow, the ease of doing business must improve, which can be achieved in many ways. At the same time, the government, alongside industry bodies, must promote initiatives to develop the start-up ecosystem to accelerate innovation and growth.
The research clearly highlights that the Sri Lankan IT industry could achieve its potential through brand strengthening and ensuring stability. Still, this is only the first step, as the industry must also collectively invest in developing global sales capabilities, while working with academia to produce competent local graduates. Finally, regulators must improve the ease of doing business to ensure sustainable growth.
A high-level task force is thus needed to spearhead the implementation of the government’s US $ 3 billion annual revenue target and assure accountability. This would address many of the issues pointed out by the model, by working with academia to address the skills shortage while facilitating entry into new markets. Ideally, it’d also be capable of revisiting all aspects of doing business in Sri Lanka to remove business barriers, allowing the local IT industry to pursue high-value projects.
Ultimately, the industry’s growth requires progressive policy and a transparent legal framework. While the research indicates much needs to be done, tech parks are a positive move announced by the current administration. These parks will provide the much-needed office space and create the ecosystem necessary for the human capital-centric IT industry.