Sri Lanka should aim to create at least 5 Fortune 500 companies
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50 per cent of the ‘Top companies in the World’ will come from emerging marketing by 2025 according to a new report from the McKinsey Global Institute (MGI). This means that there is an incredible opportunity for Sri Lanka to gain from this movement in the next 10 years. As in most things in life this will not happen in a vacuum and will require strategic planning and careful execution. Currently of the 20 cities with the largest number of big companies, only five are in emerging regions (source: McKinsey). Cities like Singapore currently have some of the largest number of companies being represented in the region and this will only continue to grow but the expectation is by 2025 some of these cities will at least have a few cities from India and China. Sri Lanka should be thinking along these lines, we should think bigger and globally so that we can gain from the growth in the region and growth centres closer to home. We should aim at being one of these cities. What must be done?
Macro picture
I had the pleasure of speaking at a World Economic Forum dialogue in Delhi, India recently. The topic of discussion was on a ‘Digital South Asia’. The dialogue attracted regional policy makers, the private sector and NGOs. The region is making great strides led by India in becoming digital and Sri Lanka so far has made great strides but if we are take full opportunity of the growth potential more must be done. Based on the discussion the following recommendations can be suggested-
1) Tax incentives for large telcos/corporations to make big investments into digital; especially in regards to faster and cheaper data connections. More proliferation of data coverage means, more information flow, greater productivity and growth in the economy.
2) Consumers of data should not be taxed in an ideal world, or tax should be kept at a minimum. In the 21st century information is power, and we must take steps to reduce the tax burden on citizens and encourage them to go online.
3) Free trade agreements that allow for the free movement of people and goods in the region. Sri Lanka cannot compete globally thinking locally; we need people who excel in the region to come and work in Sri Lanka. Access to bigger markets through free trade will also mean more investment into Sri Lanka from regional and global players.
4) Start-ups have to have policy backing to thrive. Small start-ups don’t grow up to be Facebook and Google in a vacuum. It needs help. This will include making policy that makes it cheap for business to fail. Tax breaks for start-ups especially in the early years.
5) Invest in education. Major investments will have to be made by the government in order to get our younger generation computer literate. We have to churn out more computer engineers, simply having doctors and accountants are not enough in the 21st century.
Micro scenario
As Sri Lankans, we cannot just depend on governments to bring about the changes that will lead to building of Fortune 500 companies. Here’s why:
1) Investment in technology is crucial. There is a notion in Sri Lanka that technology can be bought. But to be the best you need to create technology and innovate.
2) Companies also should have diversified leadership teams; ideally if a company is big enough and have people at the top from around the world.
3) Make more inroads into gender balance at the workplace
4) Invest in the future and think very big. Start thinking on regional plays and global plays.
Sri Lanka should aim to create at least five Fortune 500 companies by 2025.
It’s an extremely exciting time for the region and it’s in our best interest to take full advantage of the changes that are taking place globally. We cannot afford as a nation to lose out on the Fifth Industrial Revolution.
(The author is the co-founder CEO of takas.lk. The opinions shared in this article is personal and does not necessarily
represent the stance of takas.lk)