Tech start-ups
View(s):In our first column (on August 5), we discussed about the nature of digital services while touching on issues around Trace IT Park and the mindset of people. I wanted to extend this a little further and take our discussion towards Tech start-ups.
The industry currently marks nearly US$1billion in exports for Sri Lanka through ICT services, Business Process Outsourcing (BPO) and Knowledge-based services. It is expected to grow up to $5 billion with an increase in the staff from the current number of 75,000 to 200,000 over the next five years. This will also mean that there will be about 1000 new start-ups over the same period.
Why are so many required? Compared to other industries, the tech industry needs a lot of start-ups for it to develop and grow. This is because tech ideas will start small and develop into large companies. This industry does not need huge capital investment as we don’t need factories to be put up or hotels to be built. What a tech start-up needs is a good idea, a couple of good people to nurture it, develop the tech components, a couple of laptops and a place for them to get things going from. So, you need less investment, relatively. The large tech companies that you see from Sri Lanka or globally have started like this. Sometimes even from someone’s garage.
That is the beauty of this industry. Nurturing people becomes central in this development.
Making those places available is also an important part, as they don’t have time and energy to do that. Their focus is tech and getting the product/service out to the market. This is why Trace IT Park becomes important. Orion City becomes critical.
If the government takes forward the Tech City idea to Homagama under Megapolis plans, that will also add value. However, it is important that transport and other aspects are aligned for it to succeed, otherwise people would not want to go and work from logistically, disconnected locations. For instance, several years ago, the government at the time had plans to grow an IT park in Malabe, only a few went there because transport connectivity was an issue.
Hatch Works is the newest addition that is developed just to support start-up needs. Hatch, located centrally in Colombo 1 started operations about a month ago. It facilitates tech start-ups as a co-working space. It aims to create a platform that empowers the transformation of ideas into commercially viable companies, become the centre of gravity for all things start-up and to provide a culture and eco-system to support entrepreneurial ventures while providing them space to work from. People can choose co-working areas or private rooms to sit their teams. It’s a commercial venture that has a great national vision. Jeevan Gnanam, Chairman of SLASSCOM (the industry chamber for knowledge services companies), Nathan Sivagananathan and Brindha Selvadurai are the livewires of this initiative.
The Export Development Board (EDB) has also given an important place for this industry in its recently launched National Export Strategy.
It has four main areas to be looked at from 2018 to 2022 -
- Support investment and exports in the IT-BPM sector through a business-enabling, predictable and transparent policy and regulatory framework
- Drive export growth through innovation and entrepreneurship
- Improve the supply of skilled highly qualified professionals to satisfy the growing IT-BPM market
- Grow champion firms
While this is quite broad and includes many things to push forward, innovation and entrepreneurship takes a cornerstone in the planned path.
Taking the industry out to regional locations is also an important part to de-centralize the opportunities and help the growth. It will also help companies to offer services at a lower cost. Young knowledge experts do not have to move to Colombo for their jobs. However, developing regional hubs is still challenging. Kandy has a few operations but not many. There were initiatives to develop Galle, but it has still not picked up that well. At times, people also show some preference to move to Colombo for work, which is surprising but understandable with the lifestyle options. There are few tech companies coming up in Jaffna also, which is encouraging.
Hatch Works operates a smaller co-working space in Jaffna too. There needs to be policy level drive from the government to grow the knowledge services sector regionally, which will be helpful not only for export revenue but also to reduce urban congestion, traffic, additional lodging requirements etc.
All in all, a cohesive growth plan supported at policy level, driven well with an action plan is what we need. While there is a bit of it, we see gaps in that equation, which will be discussed in future columns. (The writer is the current President of CSSL – Computer Society of Sri Lanka and can be reached at yvabeywickrama@gmail.com)