Growing SL’s tech sector amidst COVID-19
Digital Reality (Pvt) Ltd this week launched the country’s first carrier-neutral, high-density data centre with a capacity of over 200 racks at Orion City IT Park, Colombo. Seen here is a view of the building.
Sri Lanka has seen a massive rise in awareness in technology. The nation has a very promising potential to build itself as a destination for technology-based services and products. In fact, this industry holds the fifth highest foreign revenue for Sri Lanka as of now. Following the end of the civil war in 2009, the technology sector was one in which Sri Lanka placed high hopes. However, the target of achieving the desired revenue per year was not accomplished. A target of achieving US$3 billion by 2025 was set, but in light of the COVID-19 pandemic that gripped the country and its economy, the target indeed seems very challenging. Therefore, there is a dire need to identify factors that affect economic growth and design a well-researched model to propel the technology sector further.
A growth model that was developed for the Information and Communication Technology (ICT) and Business Process Management (BPM) industry in Sri Lanka was recently published but it had to be re-evaluated in the context of COVID-19 that escalated over the course of the past year.
As we are well aware, the export revenue generated by key industries such as the tourism sector took a massive hit due to COVID-19. Previously through research, we identified the primary factors that influence industry growth to be stability of the country and the strength of the brand. Global sales and marketing, service quality and availability of skills were noted as secondary factors with ease of doing business and expansion of products and services falling under the category of supportive factors.
Trends in other markets
during the pandemic
COVID-19 has been met with economic protectionism and tightening of borders, therefore companies are moving BPO activities to their own countries as they take advantage of newly-unemployed workforces. The expansion of automation and Artificial Intelligence in many sectors means that the short-term future of the BPO industry is at risk. This means that there is a definite risk towards low-end work and an urgent need to strengthen the high-end knowledge jobs.
In the long run, business analysts predict that the shift in homeworking and the need for companies to cut costs due to economic downturns can in fact create gains in the outsourcing industry and trigger business growth. Among the many outsourcing trends that were highlighted, an increase in remote work, capacity for omnichannel experience, adoption of robotic process automation and higher demand for social media services are some noteworthy points. IT professionals have pushed their agenda towards redefining technology priorities. As companies reset business strategies to ramp up modern tech solutions, they are more capable of using external support to speed up the process.
It is very important for Sri Lanka to follow such trends and capitalise on the opportunity even in the midst of the challenges posed by COVID-19. With Sri Lanka’s tourism industry suffering a huge hit, there is a pressing need to develop the tech outsourcing revenue. Other sectors that can potentially survive are those where automation is less of a threat and where there is a steady demand for products or services.
Growth model
In light of all this, the growth model we proposed can be customised in this COVID-19 context. This falls under four key pillars – Ongoing, Planning, Innovation and Execution.
Ongoing
Owing to turbulence in Sri Lanka from 2010 to 2020, the ICT/BPM companies have been impacted, thereby slowing down its growth. COVID-19 has further exacerbated it and this is why there is a dire need to develop and innovate entrepreneurial culture. The work from home mode is good progress for the continuity of this sector, even in the event of any future disruption.
Planning
Sri Lanka’s country brand for ICT/BPM is very poor. However, now is a good time to re-evaluate the country’s branding and utilise this period to develop a new strategy. With the pandemic slowing down several industries, this period is perfect for careful deliberation and planning while execution can be planned for post-COVID-19 times.
We had proposed that a high-level task force is formed under the auspices of the President to spearhead the implementation of the model to achieve the industry targets set by the government. To achieve this, all aspects pertaining to the ease of doing business should be re-evaluated and supportive platforms for the growth of the industry should be implemented.
In terms of product portfolio and country brand building, we need to highlight areas in which Sri Lanka has reasonable skills in and position Sri Lanka as a destination for high end services. These include AI, IOT and Cyber Security. Therefore, the government needs to review policies around personal tax rules, transportation and logistics to make it attractive for professionals to continue working in Sri Lanka and also attract expatriates back to the country, thereby bringing skills back to Sri Lanka and also bringing new ICT/BPM opportunities to the country.
Innovation
Digital innovation in emerging technologies saw an unprecedented demand during the pandemic and is expected to sustain even in the coming decade. COVID-19 has reshaped industries and retailers are reshaping their businesses to survive and grow.
Businesses that have embraced technologies have done very well and other businesses can still leverage innovation and new technology to get their business back on track. In order to prepare for growth acceleration, some solutions that are deployed across the globe include cloud migration, AI driven finance and banking solutions, digital omni-channel contact centres and an intelligent supply chain, to name a few.
It should be noted that Colombo is listed at the rank of 76th place in Tholons (2021) – TOP 100 SUPER CITIES. It held the 71st position in 2020, so we need to work on improving on innovation. The research findings also indicate that payment methods and gateways can be further improved to facilitate foreign remittances.
Execution
This is the pillar where work streams will move to the post-planning stage and eventually become operational. It is proposed that a national taskforce is formed to track and manage the successful execution of the four pillars.
If we use this pillared approach, as a country we should be able to get ourselves on track to achieve set targets for the tech sector.
(The writer is a Past President (2017 & 2018) of the Computer Society of Sri Lanka (CSSL), the apex body for IT professionals in the country).