OFFSHORE IT DESTINATION
Randima Attygalle assesses Sri Lanka’s path to achieving ICT hub status
A rapidly growing industry in Sri Lanka, ICT serves a broad spectrum of areas. With Sri Lanka graduating to a middle income country, the number of industry verticals benefitting from ICT is on the rise.
The ICT industry is Sri Lanka’s fourth largest export earner. Over 300 local ICT companies export software products and services to several regions, largely to North America, the EU, Australia, East Asia, the Middle East, Africa and the Nordic region. Moreover, Sri Lanka acts as an offshore development centre for Fortune 500 companies in the US, Ireland, the UK, Australasia and Sweden, and joint ventures based in Sweden, Norway, the US and Japan among others.
As the Sri Lanka Association of Software and Service Companies’ (SLASSCOM) Strategy Document 2016 states, its Vision 2022 is an “aspiration that foresees the Sri Lankan IT sector becoming a US$ 5 billion industry, creating 200,000 direct jobs and enabling the launch of 1,000 startups.”
Ranked 11th in A. T. Kearney’s Global Services Location Index, Sri Lanka’s competitive advantage in the IT and business process outsourcing (BPO) industry is built around agility, high value to cost, a niche talent base, strong ethics, cultural adaptability and superior quality of life as a destination for doing business.
Sri Lanka is the first South Asian nation to become a state party to the Budapest Convention on Cybercrime – a process led and facilitated by the Information and Communication Technology Agency (ICTA) of Sri Lanka. The Electronic Transaction Act was amended to fall in line with the UN Electronic Communications Convention – another first for South Asia, which provides a major boost to commerce, business and trade in the digital era.
“These moves not only strengthen the role of our IT industry in bilateral trade but also foster confidence in cross border transactions and bring our legislation in line with countries such as Singapore,” observes Chitranganie Mubarak, Chairperson of ICTA. Bridging the ‘digital literacy gaps’ of the country could establish an industry talent pool for ICT.
This in turn could empower other industries, notes Mubarak, who cites the ‘specific skills gaps’ prevalent in the industry: “There’s ongoing discussion among all relevant stakeholders on the possibility of addressing these skills gaps through bilateral trade agreements with necessary safeguards to ensure that the local skill base is unaffected.”
Those who actively aspire to a career in ICT are few and far between in the country, as ICTA’s chairperson bemoans: “Less than five percent of the annual intake at national universities each year opt for ICT,” says Mubarak, who calls for more numbers to join the industry.
She adds that the avenues open to young IT professionals within the industry as well as in other sectors that leverage on ICT are numerous. ICT could lend itself to a more women friendly working environment with flexible hours coupled with a global drive to encourage more females to be at the decision-making level of the industry.
Mubarak is lobbying for an increased female presence in the industry: “Across the board, having women in top positions has helped the bottom line as they usher a different perspective into business.”
Innovation and quality should be defining traits of Sri Lanka’s ICT brand to clearly differentiate it from other players in the region, asserts London Stock Exchange Group’s Shanaka Abeywickrama, who is the Head of Marketing, Corporate Communication and Sustainability – Sri Lanka, which includes the financial technology product company MillenniumIT.
“Whilst cost arbitrage will play a role, we cannot compete on numbers alone. Our proposition should not be to come to us because we’re cheaper but rather because we are better,” he asserts. The possibility of improving the gender balance in the industry, which would create considerable capacity and facilitate organic growth, is a tremendous opportunity for the local ICT industry, Abeywickrama maintains.
High levels of adoption such as companies embracing digital channels for both customer interaction and communication, the presence of global digital technology based service providers and process automation, and the potential for innovation through the startup ecosystem are among the other prospects, he adds.
But the challenges that confront the local ICT industry cannot be ignored. Retaining talent in the face of the growing appeal of migration coupled with concerns about capacity are notable among the issues that persist.
“To ensure that sufficient skilled resources are entering the market to fuel industry growth requires investment in the youth, and creating awareness about opportunities in ICT – and amongst their influencers, about the potential of the industry. This requires the industry to address areas such as diversity and inclusion, to ensure a healthy and sustainable pipeline of talent,” Abeywickrama concludes.