Ramesh Shanmuganathan, an Executive Vice President and Group CIO at John Keells Holdings (JKH), and Chief Executive of John Keells IT, shares insights into how Sri Lanka can unlock its tech potential by becoming an innovation powerhouse, fostering talent, embracing progressive regulation, developing world-class infrastructure, forging global tech alliances, driving sustainable innovation, and catalyzing digital disruption across sectors. Shanmuganathan contends that by learning from nations like Singapore, India, and UAE, Sri Lanka can foster visionary leadership, develop robust infrastructure, enact proactive government initiatives, invest in R&D and education, build a supportive startup ecosystem, encourage international collaboration and create a conducive regulatory environment. To better integrate with global tech value chains, Sri Lanka should enhance digital connectivity, cultivate niche specializations, encourage public-private partnerships, support export-oriented startups, and create a business-friendly environment.
How has Sri Lanka’s economic setback impacted the tech sector?
The economic setback in Sri Lanka since 2019 has had a significant impact on the tech sector, causing various challenges and changes. The country’s economy has faced multiple factors such as political instability, natural disasters, and the global COVID-19 pandemic, which have all contributed to a slowdown in economic growth.
One notable effect of the economic setback is a reduction in technology-related investments and budgets across businesses in different industries. Financial constraints have compelled companies to scale back on their technology expenditures, which in turn had a direct correlation to the demand for tech products, solutions, and services. Furthermore, limited access to financing and investment opportunities has placed a strain on tech startups, scale-ups and innovation as well. The lack of available capital has impeded the development of solutions built upon new technologies, slowed down digital transformation adaption, and hindered the overall growth of the tech sector.
Additionally, the talent pool in the tech industry has been affected significantly due to limited opportunities for career growth as well as exposure and due to this some skilled professionals have been compelled to leave the country or seek alternative career paths. This brain drain will pose a significant challenge to the industry’s growth and progression.
Despite these challenges, it’s important to acknowledge that the tech sector in Sri Lanka has exhibited resilience and adaptability. The government, along with private organizations and educational institutions, has taken proactive steps to foster innovation and support the industry. Initiatives promoting entrepreneurship, providing training and mentorship programs, and attracting foreign investments have been implemented to create a favourable environment for tech growth. Looking ahead, as the economy stabilizes and recovers, it is expected that the tech sector will regain its momentum. The ongoing support from stakeholders and a continued focus on creating an environment conducive to innovation and investment will play a crucial role in driving the tech sector’s rebound. With perseverance and collaborative efforts, the tech industry in Sri Lanka can contribute to the country’s overall economic recovery and growth in a significant way
IT and BPM exports have continued to grow, what is working well here?
Several key factors have contributed to the continued growth of IT and BPM exports from Sri Lanka and some of the noteworthy aspects that are working well in this regard are as follows:
1. Skilled Workforce: Sri Lanka has a highly skilled and talented workforce in the IT and BPM sectors. The country’s education system focuses on producing graduates with strong technical expertise, ensuring a solid foundation in areas such as software development, data analysis, finance, and business processes. This talent pool is a valuable asset for companies looking to outsource their IT and BPM needs.
2. Competitive Cost Advantage: Sri Lanka offers a cost advantage for businesses seeking IT and BPM services. Compared to other outsourcing destinations, the costs associated with labour, infrastructure, and operations in Sri Lanka are relatively lower, making it an attractive option for cost-conscious businesses without compromising on quality.
3. Language Proficiency: Sri Lanka enjoys a high level of English language proficiency among its workforce. This is a significant advantage for service-oriented roles that require effective communication, such as customer support, voice-based services, and knowledge-based processes.
4. Supportive Business Environment: The Sri Lankan government has implemented policies and initiatives to create a conducive business environment for IT and BPM companies. These include tax incentives, simplified regulatory procedures, dedicated technology parks, and business-friendly policies that promote investment and growth in the sector.
5. Infrastructure Development: There have been ongoing efforts to enhance and develop world-class IT infrastructure in Sri Lanka. This includes the establishment of state-of-the-art office spaces, robust telecom networks, reliable power supply, and advanced connectivity options – all of which are vital for supporting uninterrupted IT and BPM operations.
6. Industry Collaboration: Collaborative efforts between the public and private sectors, along with industry associations and knowledge-sharing platforms, play a pivotal role in fostering collaboration within the IT and BPM sector. These collaborations facilitate knowledge exchange, skill development, and innovation, driving the overall growth of the industry.
7. Diversified Service Offerings: Sri Lanka’s IT and BPM industry has successfully diversified its service offerings to cater to various global markets. This includes expanding into areas such as software development, digital marketing, finance and accounting services, research and analytics, and more. This diversification reduces reliance on a single market or service, further bolstering the stability and growth of the sector.
8. Focus on Quality Assurance: Sri Lankan companies prioritize delivering high-quality services to their clients. Adherence to international quality standards, certifications, continuous professional development, and stringent service level agreements have helped build a reputation for reliability, excellence, and client satisfaction
These factors, coupled with sustained government support, ongoing infrastructure development, and industry-led initiatives, have been instrumental in driving the continued growth of IT and BPM exports from Sri Lanka. As a result, the country has positioned itself as an attractive destination for outsourcing, providing high-quality services at competitive costs.
If Sri Lanka was more ambitious about the tech sector, what should then be its vision?
Innovation Powerhouse: Sri Lanka should become an epicentre for innovation by inspiring a new generation of tech pioneers where audacious ideas become reality. By cultivating a dynamic ecosystem that fuels entrepreneurship, supports startups, and facilitates collaboration, Sri Lanka can redefine what’s possible and drive breakthrough technologies that shape the world.
1. Brilliance: Sri Lanka unleashes the brilliance of its talent, equipping them with game-changing skills in AI, cybersecurity, data analytics, and more. Through strategic partnerships and visionary education reforms, we empower our tech professionals to lead on a global stage, attracting top-tier talent both locally and internationally.
2. Progressive Regulation: Leading by example, Sri Lanka embraces progressive regulation, tearing down barriers to innovation. With business-friendly policies, robust IP protection, streamlined processes, and enticing incentives, we create an environment where disruptive technologies thrive and international companies want to invest.
3. Infrastructure Overdrive: Sri Lanka builds an infrastructure superhighway, turbocharging digital connectivity and opening a world of possibilities for accelerated growth. From everywhere-accessible high-speed internet to cutting-edge innovation hubs and tech parks, Sri Lanka paves the way for ideas to flourish, startups to scale up, and transformative technologies to take flight.
4. Global Tech Alliance: Sri Lanka forges global alliances with trailblazing tech leaders, universities, research institutions, and startups – fostering knowledge exchange and propelling us to new heights. These collaborations open doors to global markets, attract investment and establish Sri Lanka as a force to be reckoned with on the global tech stage.
5. Sustainable Innovation Drive: Recognizing our role as stewards of the planet, Sri Lanka champions sustainable tech innovation. We harness the power of technology to tackle environmental challenges head-on, embracing eco-friendly practices, green initiatives, and responsible data management that drive not just profit, but also a greener, more sustainable future.
6. Digital Disruption Catalyst: Sri Lanka ignites digital transformation across sectors, revolutionizing finance, healthcare, agriculture, logistics, and more. Embracing cutting-edge technologies like cloud computing, IoT, and automation, we unleash productivity gains and catalyze innovative business models that position Sri Lanka as a true pioneer of digital disruption.
With this punchy vision, Sri Lanka is primed to impress on the global tech stage. From attracting investments to creating high-value jobs and driving societal progress, we unleash the full potential of our nation and leave an indelible mark in the annals of technology’s evolution. Together, Sri Lanka will redefine what’s possible, revolutionize industries, and shape a better future for all.
What can we learn from the successes of other countries, particularly Singapore, UAE & India?
Sri Lanka can derive valuable insights from the successes of countries like Singapore, India, and the UAE. Some of the key lessons that Sri Lanka can learn are:
1. Visionary Leadership: Sri Lanka can look to these countries as examples of visionary leadership that sets clear goals and fosters innovation-driven growth. Strong leadership can provide the direction and policies needed to support the tech industry.
2. Robust Infrastructure: Sri Lanka can focus on investing in a robust digital infrastructure, including high-speed internet connectivity, reliable power supply, and advanced telecommunications networks. Developing a solid foundation will enable the tech sector to thrive.
3. Proactive Government Initiatives: Governments in these countries have implemented various pro-tech initiatives, such as supportive policies, tax incentives, research grants, and startup funding schemes. Sri Lanka can replicate and adapt these programs to suit its context and attract talent, encourage entrepreneurship, and foster innovation
4. Investment in Research and Development: By prioritizing investment in research and development (R&D), Sri Lanka can drive technological advancements. Increasing funding for research institutes, fostering collaboration between academia and industry, and encouraging technology transfer will strengthen the country’s R&D ecosystem.
5. Focus on Education and Skills Development: Like Singapore, India, and the UAE, Sri Lanka can place a strong emphasis on education and skills development to build a qualified workforce for the tech industry. This can be achieved through investments in STEM education, vocational training programs, and initiatives to reskill the existing workforce to meet the evolving needs of the digital economy
6. Supportive Startup Ecosystem: Sri Lanka can establish a vibrant startup ecosystem by creating incubators, accelerators, and venture capital funds. These structures would provide mentorship, funding opportunities, incubation services, and network access to nurture and support local startups.
7. International Collaboration: Following the example of Singapore, India, and the UAE, Sri Lanka can actively pursue collaborations with international partners. This would facilitate knowledge exchange, research collaborations, and technology transfer, helping Sri Lanka tap into global expertise and expand its markets.
8. Digital Skills Training: Sri Lanka should invest in digital skills training programs to bridge the talent gap. By partnering with industry experts and educational institutions, Sri Lanka can offer specialized training in fields like data science, artificial intelligence, cybersecurity, and software development. This will help create a pool of skilled professionals who can contribute to the growth of the tech industry
9. Supportive Regulatory Environment: Sri Lanka should create a supportive regulatory environment that fosters innovation while ensuring consumer protection. Streamlining regulations related to starting and operating tech companies, protecting intellectual property rights, and encouraging ease of doing business will attract both local and foreign entrepreneurs.
10. Accessible Funding Opportunities: Sri Lanka can establish dedicated funding mechanisms, such as venture capital funds or technology-focused investment programs, to provide financial support to startups and budding entrepreneurs. By connecting startups with investors and facilitating access to funding, Sri Lanka can stimulate growth in the tech ecosystem.
11. Industry-Academia Collaboration: Encouraging closer collaboration between universities, research institutions, and the private sector can accelerate technology transfer and commercialization of research. Sri Lanka can facilitate exchanges between academia and industry professionals, encourage joint research projects, and provide avenues for knowledge-sharing and mentorship.
12. Open Data and Innovation: Sri Lanka can embrace open data initiatives by making government data accessible to the public and encouraging its use in developing innovative solutions. Opening up data can spur entrepreneurship, drive evidence-based decision-making, and foster collaboration between different stakeholders in the tech ecosystem.
13. Focus on Sustainability and Social Impact: Sri Lanka should prioritize sustainability and social impact in its tech initiatives. By encouraging the development of tech solutions that address environmental challenges, promote inclusivity, and improve quality of life, Sri Lanka can position itself as a responsible player in the global tech landscape.
14. Networking and Collaboration Events: Sri Lanka can organize tech conferences, seminars, hackathons, and demo days to bring together industry professionals, entrepreneurs, investors, and policymakers. These events will serve as platforms for networking, knowledge-sharing, and collaboration, creating a vibrant community that supports the growth of the tech ecosystem.
15. Government-Industry Partnerships: Sri Lanka can foster partnerships between the government and the private sector to drive innovation and technology adoption in key sectors. By collaborating with established companies and startups, the government can leverage industry expertise and resources to solve pressing challenges and promote economic growth
By studying and adopting these strategies, Sri Lanka can pave the way for a flourishing tech ecosystem, attracting investment, fostering innovation, and positioning itself as a hub for technology-driven growth and create a thriving tech ecosystem that fuels economic development, drives innovation, and ensures sustainable growth for years to come.
How can Sri Lanka better integrate with tech value chains from the region and globally?
To better integrate with tech value chains from the region and globally, Sri Lanka needs to work on multiple facets such as:
1. Enhance Connectivity: Sri Lanka should focus on improving its digital infrastructure, including internet connectivity, data centres, and communication networks. This will enable seamless integration with tech value chains and facilitate efficient data exchange, collaboration, and outsourcing opportunities.
2. Foster Public-Private Partnerships: Sri Lanka can encourage partnerships between the government, private sector, and international organizations to promote technology transfer, knowledge sharing, and investment opportunities. Public-private collaborations can help integrate Sri Lankan tech companies into global value chains by providing access to resources, expertise, and market networks.
3. Identify Niche Specializations: Sri Lanka can identify and develop niche specializations in areas where it has a competitive advantage. By focusing on specific industries or technologies, such as fintech, e-commerce, software development, or cybersecurity, Sri Lanka can position itself as a valuable player in the global tech value chains
4. Promote Trade and Investment Policies: Sri Lanka should adopt policies that promote trade facilitation, and ease of doing business, and attract foreign direct investment in the tech sector. This includes creating incentives for multinational tech companies to establish operations in Sri Lanka or form partnerships with local firms.
5. Participate in Regional Tech Platforms: Sri Lanka can actively participate in regional tech platforms, such as ASEAN’s digital initiatives or South Asia’s tech networks. This will provide opportunities for collaboration, knowledge-sharing, and access to regional markets.
6. Support Export-oriented Tech Startups: Sri Lanka can provide support and resources to export-oriented tech startups, helping them connect with global value chains. This includes offering incubation programs, mentorship, funding, and assistance with market entry and scaling up operations.
7. Facilitate Cross-Border Collaboration: Sri Lanka can establish channels for cross-border collaboration with neighbouring countries and other tech hubs. This can include initiatives like joint research and development projects, technology transfer programs, and cross-border innovation challenges. Such collaborations will enable knowledge sharing, expand networks, and foster partnerships.
8. Strengthen Intellectual Property Protection: Sri Lanka should strengthen its intellectual property protection mechanisms to instil confidence and encourage innovation. Robust IP laws and enforcement can attract foreign tech companies seeking to protect their inventions, software, and brands when considering partnerships or investments in Sri Lanka.
9. Cultivate a Business-friendly Environment: Sri Lanka should focus on creating a business-friendly environment that supports tech startups and encourages foreign investment. This includes simplifying bureaucracy, reducing regulatory barriers, offering tax incentives, and ensuring ease of access to finance and venture capital funding
10. Build Technological Infrastructure: Apart from digital connectivity, Sri Lanka should invest in advanced technological infrastructure, such as cloud computing capabilities, big data analytics platforms, and cybersecurity networks. Building a robust technological foundation will enhance Sri Lanka’s ability to participate in complex tech value chains.
11. Promote Diaspora Engagement: Sri Lanka can leverage its diaspora population by actively engaging them in the country’s tech ecosystem. Encouraging diaspora professionals to connect with local startups, mentor entrepreneurs, and invest in tech ventures can bring valuable expertise, networks, and international exposure to the industry.
12. Establish Tech Parks and Incubation Centers: Creating dedicated tech parks and incubation centres can attract both domestic and foreign tech companies. These hubs can provide infrastructure, support services, and a collaborative environment that nurtures innovation, entrepreneurship, and knowledge exchange.
13. Promote Tourism as Digital Destination: Sri Lanka can promote itself as a desirable destination for digital nomads, remote workers, and tech conferences. By highlighting its natural beauty, cultural diversity, and emerging tech scene, Sri Lanka can position itself as an attractive option for those seeking a work-life balance in a tech-oriented environment.
14. Engage Multinational Tech Companies: Sri Lanka should actively engage multinational tech companies and encourage them to set up regional offices or innovation centres in the country. Partnering with established players will allow local tech companies to tap into their global networks and value chains.
By implementing these as a well-coordinated and cohesive program Sri Lanka can enhance its integration with tech value chains from the region and globally, foster innovation and growth in the tech sector, and attract investment and partnerships. This will enable Sri Lankan tech companies to network, learn from global leaders, and explore potential partnerships as well .