Sri Lankan IT industry leverages niche appeal

Consistently ranked as a top global destination for business process outsourcing (BPO) and IT, Sri Lanka’s tech services industry has grown substantially in recent years, with high expectations and ambitious targets going forward, according to the Oxford Business Group (OBG)

Recent years have seen significant growth in Sri Lanka’s ICT revenues, particularly exports, given its limited domestic market. From US$128 million in revenue in 2007, figures rose to $325 million in 2009, $440 million in 2011 and $719 million in 2013, representing 6.47 per cent of total exports. With official figures slightly delayed and reliant on periodic industry surveys, estimates for 2014 were around $820 million with projections for 2015 topping $1 billion, OBG said in a media release issued on today (Monday).

The industry aims for a total of $5 billion in revenue by 2022, with 200,000 direct jobs and 1000 new start-ups.
These numbers largely align with accelerated global growth rates for BPO. The global BPO market is projected to grow at a five-year compound annual growth rate of 5.3 per cent, reaching $202.6 billion in 2016, according to the International Data Corporation, an IT market research and advisory firm quoted in the OBG statement.

Sri Lanka, it said, shows unique expertise around building intellectual property and software engineering, at a higher value-added segment of the market.

“In India it has historically been a numbers game, with a wide range of services offered at a low price point,” Mack Gill, CEO of MillenniumIT, a local IT firm providing capital markets software and services to a number of global exchanges, told OBG. “But Sri Lanka is coming at it from a different perspective, as it is obviously smaller, but also has a strong legacy in engineering.”
Apart from products and services, there is also an emphasis on different sized clients. Jeevan Gnanam, CEO of Orion City, the island’s only private IT park, told OBG that Sri Lanka has a true leg up on India in the small and medium-sized enterprises (SMEs) market.
"We are not so much focused on big-scale business out of places like the US, as many of them are already covered, but there is a lot of scope around SMEs that can save on cost and get quality work,” he told OBG.
Perhaps most important is Sri Lanka’s batch of yearly IT graduates, primarily coming out of technical programmes at the University of Colombo and University of Moratuwa, as well as the privately owned Sri Lanka Institute of Information Technology.
Figures from the Sri Lanka Association of Software and Service Companies, which acts as a sector-specific chamber of commerce, shows the total number of annual IT graduates rising from around 3800 in 2007 to an estimated 7000 in 2014. However, with revenue growth rising more than 200% over the same period, the industry may need to boost the flow of skilled graduates to keep pace with continued expansion. - ENDS -