ICT And The Economy: Prospects For Sri Lanka

Filed under: Colombo Telegraph,MORE OPINION,Opinion |

By S. Sivathasan


Global Perspective

When the growth of the global economy and of individual state economies over the last 110 years is examined, it is clear that the sectoral composition has changed drastically. Agriculture which was the dominant sector for centuries has ceased to be the principal component of GDP as of now. It employs a lesser workforce compared to Services. Yet it assures the world of sustained food availability. The same holds for Industry, which though increasing in importance as a producer of goods, is no longer the only pivot of the economy. In recent decades Services have become the predominant sector in global terms.


In course of time, Services have embraced a large spectrum. The compass has a range from education, health, banking, housing, trade, transport, shipping, aviation, tourism, ICT and many more. Globally they account for 64 percent of GDP as estimated in 2012, while agriculture accounts for 5.9%. A visible phenomenon in recent decades is that agriculture and industry support and sustain services and new wealth created by the latter reinforces and develops the former. In a sense it is true to say that more land and funding are needed in the services sector for healthy growth of agriculture.

Information and Communication Technology

A relatively recent development but with exponential growth in a brief span is ICT. Worldwide IT spending in 2013 is estimated to reach $ 3.7 trillion. Within its compass are: communications, computer services, computer software and computer hardware. Investment and earnings wise beginnings were modest for some of the leaders. A quarter century or less is common to many. A common thread running through success has been emphasis on education, particularly on science and math though other courses are not a bar for selection. Investment in education has come principally from the state through proactive policy and programme. Ireland and India and significantly Tamil Nadu are examples and there are very many more worldwide. Management of the industry however has been mainly a private sector preserve, supported by state initiatives in funding and through proactive fiscal policies.


With an export performance of $37.2 billion in Computer and Information Services, Ireland ranked first in the world in 2010. It was remarkable for a country about the size of SL having a population of less than a fourth. What explains? The intellectuality of the leading lights who got their perceptions and formulations accepted by those in governance. Two great changes taking place in Europe and US were capitalized on. First was the opportunity thrown open by the EU economy and the second was the prospect of investment offers from the US. With such a tie up, Ireland was able to leapfrog over industrialization. Ireland correctly identified IT as the best field for development. Education was chosen as the merited area of attention and resources were devoted more than adequately. In education, science claimed precedence and such training equipped the young for IT. The year of Ireland’s economic takeoff was 1987. It was somewhat coterminous with growth in IT development, exports and high end employment.

‘Smart Education = Smart Economy’, is the current credo of Ireland for ICT in Classroom Initiative. The watchword is RID – Research, Innovation and Development. The Innovative Task Force has estimated that High Tech and RID employment in Ireland will reach 177,000 by 2020. It is forecast that per capita income in 2050 at constant 2000 us $ is 61,363 for Ireland and 49,412 for UK.


Israel is another small nation that has astounded the world of Information Technology with her performance. The Jews reputed for their intellectual ascendancy capture every opportunity that comes their way to optimal advantage. It was so with reparations they received, funds that flowed from US and expertise from the intellectuals and intelligentsia of their own compatriots domiciled abroad. With all such assistance, pitching for the field promising much leverage was an easy choice. Success in ICT confirmed their correctness.

Securing the 7th place with an export performance of $ 7.7 billion in 2010, won her plaudits. Speedy development is spread over the last twenty years. Success is attributed to high caliber of scientists. Israel has 135 engineers per 10,000 citizens against 85 in US. When will Sri Lanka approximate such a level of production with a replication of Faculties or Engineering Colleges?

Sri Lanka

ICT Service exports in 2010 were $310 million. This denotes a 47% increase compared to two years previously. The UNCTAD Report for 2012 has this to say. “Soft Ware (SW) production in Sri Lanka has witnessed rapid growth during the past decade. Has one of the most export oriented industries in the world”. It also points out that “SL is among the developing countries with the lowest level of SW spending, related to GDP and overall spending on ICT”. Among the advantages SL has as with India, is some proficiency in English. But the numbers are limited.


When growth statistics of China are perused, it may be seen that whatever curve that China touches never dips. It only grows exponentially. This is true of ICT as well. In respect of Software, production to the value of $ 8.883 billion in 2001 multiplied 32 times in 10 years to $285.9 billion in 2011. Exports surged 42 times from $ 726 million to $ 30.400 billion. Hardware production was $ 820 billion in 2010 and transaction value of e-commerce in 2011 was $ 926 billion. UNCTAD reports an export volume of $ 9.2 billion in 2010.

What is conspicuous in China is the comprehensive manner in which the challenges are responded to. Hardware manufacture to produce software and both serving the domestic and foreign markets has been the feature. In addition are e-commerce and e-governance. To serve all the needs 7.7 million trained people are engaged. The spread of English to encompass IT personnel is relatively recent and perhaps the change explains the spurt in exports. Even for smaller nations this can be a model.


In computer and information services, NASSCOM the trade body of IT professionals with international representation, reports an estimated volume of $ 76 billion in  exports in 2012/13. Estimate of domestic sales was $ 32 billion. India stands out as one among the top leaders. The industry provides high end employment to three million people while adding 180,000 net jobs in 2012.

As is the case with many a leader in the field, education diligently directed to computers and IT succeeded in creating the academic leadership capable of winning the day in the echelons of  governance. Of great significance was also the economic reform of PM Narasimha Rao and FM Manmohan Singh in 1991 and in the years following. It is to their credit that they “ twisted their own arms”, though under economic compulsion and started dismantling the license-control regime without waiting for IMF behest. Their attribute of intellectuality prevailed over safeguarding long nourished vested interests or in yielding to populism or expediency. Successive governments followed the lead and private sector took initiatives thereafter.

[There is a wide disparity in the statistics of China & India, reported by the respective countries and those of UNCTAD. A variance in the definition of IT, ICT, Software production, Software services, Software exports etc. and their composition offer part of the explanation. The reporting years are also different.]

Prospects for Sri Lanka

If the first decade is considered productive for SL, the nineties may be treated as a period of gestation or hibernation or a run for takeoff. It need not imply that late entry makes for slow growth. With attention sharply focused, amends can be made for the defaults of the past.

The first and most crucial area demanding state assistance is that of finance. UNCTAD in its report for 2012 points to Sri Lanka being among the lowest spenders on software in developing countries.  It is good to be aware that the world will be spending $ 3.7 trillion on IT in 2013. The first charge on the peace dividend should have been for IT, realizing the leverage that costs have on benefits.

The second area connected to the first is Education. But cavalier treatment manifests in paltry allocation resulting in utter neglect particularly at tertiary level. More institutions with affiliation and accreditation particularly for science and engineering can promote the ICT industry.

Third is English instruction without which no headway is possible in ICT development. Present day literacy level is enough only to decipher name boards. A student well educated in English should engage in elegant speech and chaste writing which can come about with wide reading. How succinctly Sir Francis Bacon said “Reading maketh a full man, writing an exact man and conference a ready man”. This should be the template for language study foreign or indigenous. I have mentioned Sir Francis to avoid confusion. Fifty years back we had high levels. We can get it back in twenty years. Depriving the underprivileged of the benefit of English with the argument that primacy for English would marginalize the rural student is neither rational thinking nor logical reasoning.

Fourth is pulverizing Colombo centric obsession. It is essential to take good education, IT, English and broadband to the districts and the countryside. All of them going together will deflate the costly metropolis and vitalize the other areas.

Fifth will be satellite townships, industrial parks, private sector housing and other appurtenances. For an Industrial Park, Mahindra World City (MWC) outside Chennai, the first and the best of its kind in India is a model. MWC is 1500 acres in extent and is in the 11th year of development with over 75 % completed. It is host among several others, to Infosys – IT giant – which at full development in an year or two will reach an employment figure of 15,000 at a single location. The components mentioned above have to be part of the composite arrangement. The beginning of this dispersal over the last ten years in Tamil Nadu is displaying the benefits.


Full realization is necessary that premium value should be placed on education if the regeneration of the country is envisioned. As for the country so with ICT. Those in governance have to pick up men of intellect, competence and probity to manage it and to give it direction.

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4 Responses to ICT And The Economy: Prospects For Sri Lanka

  1. 0
    Improved quality of education with additional funds, more and better English and increased inputs into ICT in that Order,will surely deliver results. To achieve such goals, we should have men with vision at the helm, which we are totally lacking now.

    Sengodan. M
    June 11, 2013 at 5:46 am

  2. 0
    Third is English instruction without which no headway is possible in ICT development My thoughts are that SL should invest in a good secondary education in science and math and the ability to read and comprehend English. Its appalling to find school leavers who were commerce and arts students have very rudimentary knowledge. a) Algebra, basic geometry is appalling. b) In the case of science a simple example is that many dont know voltages and circuits in electricity, a very practical component of everyday life. c) Many dont know how to read a graph. English: The govt cannot even fill the vacancies for English teachers. What we need is a secondary level education where one is able read a pamphlet which has some basic science (say agriculture), graph and comprehend the contents. That will a good investment for a broad populace that understand the science of new ag developments and able keep up with technical enhancements be it construction, heavy machinery etc. In the case of English SL does not need “elegant speech and chaste writing. What is needed is the basic ability to read and comprehend a manual, be it for a DVD player or a software program. I went through a Science Degree from a Sri Lankan University and later attended graduate school in the US. In the SL University, many of the students had rudimentary English. In the Science faculty after the first term lectures were only in English. Obviously the text books were also only in English. However, the fluent English speaking Colombo School component including me were quickly left behind. Many who ended as research or faculty in the west were those who inihtially had lesser English skills. In grad school, many of the Chinese/Japanese/Korean students could barely speak English. However, in a year or two they became star researchers and are now leading names in academia. My point is that Fluent English and math/science was quickly outclassed by tenacity, rudimentary English and math/science Now to IT. In SL University we only saw the computer. It never worked while I was in UNi. When in Grad school I resisted for almost one semester to use a word processsor. Finally one Professor put his foot down and said he would not accept the assignmment unless printed from word processor on a DEC Raimbow. Within a year quickly had to learn spredsheets (quickcalc) and coding to analyse data for research projects. That was without a single formal class in IT/coding. Within the last few years worked in areas that need coding and analyis and thats without any formal qualification in IT. So what is the point I am trying to make. In the upper end of technical Employment,a solid math-science background coupled with some IT will take you much further than a pure IT education.

    June 11, 2013 at 6:58 am

  3. 0
    Another story: This is a about a second wave (mid 80’s) JVP guy now in his mid late 40’s. I knew him because he was the electrician while I owned a property down South (Hikkaduwa/Dodanduwa). I got to know of the stories because he would share a bottle of booze with me. Anyway Mr.JVP had been active in the area in the mid/late 80’s. It was a bad time to be in the south as a young male. Mr.JVP got caught, there were some reasons which I cant recall why he did not become history. He was sent to a rehab camp in Anuradhapura. At some point he was given a choice of early release if he took vocational training. He elected to do Electrical wiring. By the time I met Mr JVP, he was married in his early 40’s, three kids. Though the kids were initially educated in schools in the vicinity, they were later sent to bigger schools in Galle and Ambalangoda. He did not want to go to the Mid East because he would miss the kids. He was always busy, earning a good LKR 1,500 to 2,000 per day. When tourism resurged he was just impossible to get hold. So whats the point. Mr.JVP was regretfull that he did not fully grasp the science beyond electrical. He was a commerce background, who just learned electrical wiring to get early release from a rehabilitation camp. Addendum: Mr.JVP was still a staunch JVPer. But when a prominent JVP MP started charging money to send workers to Korea he became disillusioned. He was pragmatic, saying charge money from some people but keep an allocation for JVPers.

    June 11, 2013 at 7:50 am

  4. 0
    We need to discard the terms ICT and IT, and concentrate on creating our own needed technical capabilities among our young. Let’s teach them assembly level programming of microprocessors in Sinhalese and Tamil. English is not essential at that level because they will be writing their programs in Hexadecimal, which is just streams of numbers punched into the computer, written using the digits 0 through 9 and the letters A through F. They could comment these programs in Sinhalese or Tamil either on paper, or using Sinhala and Tamil keyboards, to document what each step does.. They can gain a basic understanding of computers in this way, and even become proficient low level programmers. If they are able to make a good living in this way, they will not be able to, or even need to set their sights on overseas employment, and so it would be an investment that will remain in Sri Lanka. Assembly level programming skills would enable them to develop microprocessor based embedded products and this is the only way Sri Lanka can add enough value to electronics exports so as to make a decent profit. It would be a waste to use ordinary teaching methods, when extremely efficient techniques have been developed by Khan Academy. Those children who become proficient can be encouraged to help their peers and become a source of savvy teachers rather than trying to teach older teachers these new subjects. All it needs are centrally positioned servers containing short video lectures that have been recorded by the very best teachers we have. These should be made available 24hours a day, 7 days a week, so children can come in, say to some Nanasela somewhere, or at a school that has computer labs, at any convenient time, watch the videos, and answer questions so the computer can keep track of each student’s status including weaknesses and strengths in various parts of the syllabus. To do the labs, cheap computers that are basically USB sticks can be plugged into the computer’s USB port…these can be made for minimal cost, or bought in bulk for tens of dollars. Major microprocessor vendors in the US, taught assembly language programming to paying customers and university professors in the 1980s. Those who took these courses designed products that incorporated microprocessors. Those are the very skills now needed by our poor children. A grassroots self-help movement is what we need – not posh degreed programs that nobody can afford.

    June 13, 2013 at 12:52 pm

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