4 December, 2020

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Sri Lanka’s Knowledge Export Road Map – Is It Achievable?

By Eran Wickramaratne

Eran Wickramaratne MP

Sri Lanka is known for the export of cheap labour.  While it is the intension of government to turn it into a knowledge hub, the road to make Sri Lanka known as a exporter of knowledge requires a meaningful commitment of resources by government and all other stake holders.

More than one million Sri Lankan workers remit 5 – 6 billion US Dollars annually to the country.  The trade deficit of nearly US $ 10 billion is largely funded by these worker remittances which annually grow by 15 – 20 %.  If Sri Lanka is to be known as a knowledge process out sourcing (KPO) destination we have to set our sights on increasing our IT-BPO/KPO revenues above the worker revenues within the next decade.  SLASSCOM’s goal is reaching US$ 1 Billion in revenue with 80,000 employed in the industry by 2015. Is this achievable? Presently the IP-BPO industry employs about 40,000 and government revenues in excess of US$ 400 million.

The IT-BPO industry is dependent on having a steady supply of high quality IT-BPO professionals.  The human resource availability is the key critical success factor.

The enabling environment has improved in many areas over the past decade while the availability of quality human resources and the unstable policy environment is of concern.

The physical infrastructure consists of eight mobile operators, broadband, leased line and stattelite connectivity.  Office infrastructure and road networks are improving.  But the power supply is less reliable and too expensive.

The legal infrastructure is largely in place with Sri Lanka being a signatory to international treaties on intellectual property, TRIPS, Electronic transactions, computer crimes and E-contracting.  However, the enforcement of commercial contracts in timely manner is yet to be achieved. Tax holidays of 5 – 12 years, concessionary income tax rates of 15%, and special assistance on real estate acquisition based on investment and employment generating potential has been a boon to the industry.

Even though post war  economy has grown at reasonable rates the country has still not been able to realise its potential in the ICT sector.  SLASSCOM itself has had to revise its goals for the IT-BPO industry.  While A.T. Kearney and Gartners have rated Sri Lanka for financial attractiveness and as a top destination in the Asia Pacific, investment has not materialized in significant amounts. The US department of State Investments climate statement of June 2012 stated “with an unpredictable policy environment, cumbersome bureaucracy, and a recent asset  seizure bill has created business uncertainty”.

The slow down on the European and North American economies which are Sri Lanka’s largest trading partners has major implications for the IT-BPO sector too.  Cost and effectiveness are paramount in making outsourcing decisions.  The outsourcing needs and the IT needs are merging.  The job of the Chief Information Officers (CIO) is becoming more about information than technology.  Outsourcing is no longer a standalone decision.  There is an increasing focus on an end to end approach, business outcomes, domain expertise and  technology as an enabler.  BPO services out of Sri Lanka have mainly focused on financial and accounting services, investment research, engineering services and UK based legal services.  The country has attracted some of the prestigious global brands, but generates relatively small revenues.

The single critical success factor is the available human resources.  A study in 2008 by the Export Development Board (EDB) describes expectations at policy level – “should improve the relevance of education by changing curriculums to meet the industry’s skill requirements”.

While the ICTA has been proactive in spending over US$ 5 million for capacity building as a part of the e-Sri Lanka initiative the human resources problem is more complex to fix.  Pre-vocational skills of English, IT literacy and familiarity are a prerequisite.  The industry also requires the workers to have the attitudes that support a global 24 x 7 work environment where men and women have equal access.

India produces more than 3 million graduates a year, while Sri Lanka graduates 22,000 from its state universities.  I hazard a guess that the total graduates from both state and private institutions are about 35,000.  Sri Lanka’s under investment in education over several decades has blunted a comparative advantage with competitors overtaking us even in smaller countries.  A Knowledge Process Outsourcing industry requires quality and reasonable supply of people.

Sri Lanka’s investment in the education sector :

Educational Expenditure as % of GDP            University Expenditure as a % of GDP

1990                3.3                                                                                0.37

1995                3.4                                                                                0.48

2000                2.8                                                                                0.45

2005                2.8                                                                                0.50

2010                1.9                                                                                0.28

Sri Lanka’s low investment in education has been rapidly declining in recent years. It must be noted that Bhutan, Nepal, Pakistan, Cambodia, Indonesia & Singapore have educational expenditures at 2.4 – 4.7 % while China 3.6%, New Zealand 7% UK 5.6%, USA 5.4% and South Africa 6% are continuing to invest in creating knowledge.  When budgetary educational expenditures are compared as % of total expenditure, or  the investment per university student, or the research expenditure as a % of university expenditures are compared across countries both in Asia and Europe, Sri Lanka’s under investment in education becomes apparent.

Global comparison of Annual cost per student ;

US$

University of California                      66,667

Singapore NUS                                  41,025

University of Oregon                         25,547

Cape Town                                         14,745

Sri Lanka Universities                          1,761

Source : FUTA Presentation

We must truly be amazed at the quality of our graduates for such  a meagre investments we make.  It must also be pointed out that in creating a knowledge Economy the quality of the graduate has to be internationally competitive.  We cannot export the required quality without much more investment in the university system to increase  both quality and quantity to support KPO, cutting edge research and increase patents with the present low levels of investment.

I have always believed that Sri Lanka’s greatest asset is its human resources.  We have the potential to become   South Asia’s hub of excellence for IT- BPO.  We need a government that not only professes but will put its resources where it  will give returns that are commensurate to the investment.  “The people who are crazy enough to think they can change the world are the ones who do” was Apple’s  ‘Think different commercial’, 1997.  Ladies and Gentlemen You can do it – provided the government understands the priority of investment in human resources.

*Extracts of the key note address made by Eran Wickramaratne, Member of Parliament and founder Chairman of the Information Communication Technology Agency (ICTA).

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Latest comments

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    We have seen an old fissile Nalin what ever coming on Tv and showing what a crass opportunist he is . Most of the lecturers who talk against setting aside 6%of GDP for education ,are those who have used tax payers money gone abroad for postgraduate degrees and came back with out them . Reasons given are sick children etc!!! These guys are promoted as senior lecturers as there are no qualified persons. Can you be a senior Lecturer with out a PHD in any other Country. The man claims he is not holding a brief for the government but has only the best interest of the students in mind and in the same breath he says , Mr Rajapaksa has kept all his promises so far. What planet is the man living in? And he is teaching ? Those of you who do not want our universities upgraded,(because they may not have a place in them if qualified personnel join the staff) shut up we see through you. And sir thank you for trying to make our universities better and all those who are continuing with the battle may the noble triple gem bless you all

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      Ye in most countries only PhD qualified are recruited as lecturers. But most striking lecturers don’t understand what does GDP mean or how we could develop education anyway.
      This MP is trying to make a name for himself using FUTA slogans. Anybody who talks about percentages not the real numbers is making himself a fool. He should know better, he is a learned man that investment depends on the country’s income and comparing different countries this way makes no sense. The numbers he quote from FUTA pamphlets are hilarious. For example, according what he says here, to improve the quality of our graduates to University of California level, we have to increase our investment 40 times meaning the education budget will have to be 75% of the GDP taking FUTA number 1.9% as the current education investment.But then, we only send 5% of our kids to the university, so to make it at least 20%, we only have to invest 300% of our GDP or 20 times the national income. I agree, that’s what we should do but would be interesting to see what Mr.Eran’s stand when he is in government oneday.

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      I have met one prof. in Germany, he has not completed a doctorate as the average professors shold have done. His industrial experience that he collected during his research over the years have been recognized for him to get his full professorship. This kind of professors are also seen though not the majority – in rigorous Germany. Germany is a country where they maintain law and order very strict.

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    Extremely well thought out and researched article Eran.

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    At the time we gained Independence our educational standards were world class. Doctors and Engineers who passed out from our Universities easily found employment out side without much difficulty. Students who qualified to enter University had to face a Viva and the suitable were selected. Just because someone qualified did not mean that he found entrance to a University. Therefore the University products were the best. Then with the changes in the Political firmament in the mid fifties everything changed. Vivas were done away with and any who passed the entrance found a place in the University. Entrance to Universities were based on standardisation. Brighter students who had higher marks from leading schools had to make way for students from rural schools with lower marks. The govt. started to clamp on specially Doctors leaving the country to prevent what was called Brain Drain. The standards of Education declined as the Politicians started to interfere. The result was that our University products were substandard that they swelled the Unemployed in the country. Finaly the University Graduates were not only unemployed but were unemployable. Sri Lanka where as earlier were sending out Academics and Professionals to the world outside had to contend with sending domestic aids to the Middle East. Had Sri Lanka maintained the levels of education we had and encouraged Brain Drain, today we will be having a thousand fold Professionals and Academics all over the world, remitting money far more than what the country receives from the domestics in the Middle east.

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      This kind of comparisons are not correct.

      How can you compare the numbers that sucessefully passed out unis then with that of today in SL, even if the quality of uni products as you say are low ?
      No doubt I agree with that the uni graduates (just first degree holders) were then more competent. But if we compare the percentages, only a tiniest minority was the degree holders those days when compared to the numbers of today. Population of the country was also not 20 mio in fifties. Even Olevels were high standard at that time than that of today.

      Besides, this is common to many developing nations and their Uni products today. I believe if politicians together with Uni authorities were able to do their jobs properly, we could have kept highstandards of the degrees.

      Let alone, see how many of lanken are taking advantages of Internet today while developed nations make billiions out of it. I personally believe internet can rather destroy our youth than help them for a better future. How many of youth today would want to spend time reading books ? if you may check the statistics – iit is much less than 1%

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        Sam, you admit that the standards have declined and there is no issue on that count. What is the reason for the standards to decline, from a Garaduate then compared with a Graduate now? Graduates then had a wider knowledge base, compared to the Graduates now who only have a narrow book application. Is this not due to the intake of poor quality students? Compared to the students being shut out who have higher marks sitting from the Popular schools? These students who are shut out of the Local Universities, almost 99% go to Foreign Universities and pass out and are absorbed by host countries.

        You differ on the comparison saying the numbers passing out from the Universities then was with a smaller population compared to todays 20 million. Well then there were only two Universities, Colombo and Kandy whereas today there are over ten Universities.

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          University in Kandy? You must have been misled by somebody here. That is Kandy Police station. True they were university students, but they were held there only for a couple days after students protested in Kandy.

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          Shows the level of intellect. When I refered Kandy was obviously refering to Peradeniya in Kandy. But for the ignorant and the stupid such irrelavancies matter and the essence of the issue can not be comprehended. It is understandable. PBJ would have graduated around late ’70s, by which time the rot had set in. Mention a Graduate for the period up to the end of ’50s who is substandard. I do not know, but if this critic Rubert Banderkoon is a Graduate himself, what better example than him to show the present standards of Graduates.

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        Top graduates of those days are the likes of PB Jayasundara..need I say more? University standards keep shifting but the unemployment is a global problem, not just ours. No technologically advanced country is immune to this ever changing economic clout. In Spain, the fourth largest economy in Europe, the graduate unemployment is 50%.In the UK it is close to 15%.Last month, an official report said more than one in three recent graduates are employed in a lower skilled job in the UK. Although, the US maintains a low graduate unemployment rate, below 8% or so, a recent report said that more than 50% of graduates under 25 were underemployed. These statistics could be worse if the degree standards were kept as high as those days. Fortunately for statistics, over the course of the last few dacades, most advanced countries have lowered the standard of graduate courses substantially. The first degree standards are so low Now, that Europe is pushing boundaries by making Masters degree the basic requirement for graduate level jobs.

        Raising standards will always be a debate but just doing that, we won’t be able to employ our graduates anywhere, everybody has the same problem, and as somebody said, we are all in together. But what we could do is make degree courses more flexible, which could open more doors for graduates. An Engineering student should be able to follow a language module while an Arts student should be taught more IT. Also it won’t do any harm if the Commerce/Management students are taught CIMA/Chartered syllabi so that they could be doubly qualified by the time they graduate. Sadly for Nirmal Devasiri and Sumanasiri Liyanage, the emphasis is on teaching history and politics (which is what is in newspapers). Liyanage in a recent Island column suggested including IUSF members in education policy committees. What would always protesting, silly IUSF members know? But that’s the standard the yesterday’s graduate Liyanage maintains.

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    It has been said that ‘a university is a storehouse of knowledge,because those who enter it, bring some knowlege with them, and when they pass out,leave it all behind’.
    As for sri lanka exporting knowledge,this has been happening and the process is called the ‘brain drain’.
    Most brains who drain away are from the science-based disciplines,which have a ready market abroad.
    It is up to the universities’ administration,to accumulate knowlege by enforcing rigid selection processes of teachers AND students.
    But, is this happening?

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      Brain drain is a slogan created to support political myths. We have always more than enough good graduates in the country but science itself is an alien concept for us. We don’t have science based technology companies to employ them. A large number of science graduates are employed as school teachers for a poor salary almost every year. The best we could do is to encourage science graduates to look for jobs abroad but even if they are geniuses, most of them struggle to find work in western countries becuase those countries also have problems associated with technological industrial decline, and unemployment among graduates.

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        The Blind trying to lead the Blind, thinking they are cat’s whisckers.

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        Dear Rupert Vanderkoon,
        Brain Drain is real.
        Many sri lankans,especially scientists and medical professionals,are in prestigious institutions abroad,after quitting their posts in sri lanka.
        Job getting aboad depends on the prestige of the instituions they graduated from.
        Indian Institue of Technology graduates find jobs readily abroad,especially in the west.

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          Justice,
          Brain Drain only rhymes well. Of course there are all sorts of professionals from our country working in many parts of the world. But at the same time,there are many good professionals begging for jobs in the country. There are thousands of quality science graduates working at the Central Bank, garments and as teachers. The list is endless. Sri Lanka produces more graduates than we ever need, (although it is only 5% of each age group) and we only have a graduate unemployment problem, not a brain drain problem. Nobody knows the difference between degree offerring institutes in our country, most only know the University of Colombo. Indian Institue of Technology graduates finding jobs readily abroad is mere heresy I am afraid. There are plenty of IIT graduates working at petrol stations. You have to speak to somebody in Sweden to find out how many IIT graduates pursuing Masters programmes spending their own money, assuming they’d find further opportunities in Europe afterwards.

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    Not only elected politicians but also people^s healthy knowledge about the prevailing situation in post war era should be enhanced if a country is to be rebuilt and restored with long lost demo values in any country that fought long lasted wars. No sinhalese populistic rhetorics can help the nation – though that can hallozinate ignorant nation to the same manner that Indians intentionally expect their folks watching their bollywood movies.

    Be it former Yogoslavia, Srilanka or Tahiti after long held wars these countries need long term rehabilitation projects. These projects should aim at varied facets and be well planned by ruling politicians with professional guidance of country^s and foreign professionals (wholehearted assistance of sociologists, psychologists and other relevant professionals are indispensable in this regard). Efficient feasibility progrms can be carried out easily by universities in analysing what areas to be given priority etc. PG studies of some graduates can focus on these areas – then the results of those studies can be made useful for the developments of the the onw country. Country ^s political leadership if they are honest should invest in these areas more than in any other areas of the country at the initial stage. Additional road developments and other infrastructure projects are not the essentials that the country needs right at the moment but the priority should be given to society building. This is how Germans and Koreans have rebuilt their countries successfully after their brutal wars. Common sense and hard working nature of average man in mentioned countries are though not comparable to that of an average person in a developing nation like SL, today’s information technology can play a significant role in achieving those standards within shorter preiod of time and making them much clearer about the great need of the hour which is society rebuilding.
    Politicians (ministers of justic and defence), lawyers and police should work together in re-establishing the rule of law. Country^s police should be well trained with the help of developed nations. Incumbent govt should invest on this than any other areas. Well set up Workshops can bring them more knowledge how the average policeman should perform their duties. Lankens are reported to be > 90% literate folks. So only qualified ones should be appointed to the police. If German, French OR English policemen can work with that confident why our police need to wait until the politicians allow them to react (independence)? Free and fair crime investigations against minor or major happenings should be carried out regardless of the perpetrators contacts to the ruling politicians. Activities that Mervin has brought before the nation should NOT be repeated. These can then work as a role model awakening the general public that the improvement of the society is in mode and this takes its time. People mind sets can become honest only through education and awareness programs. If the ministry of defence is HONEST under the guidance of MR + GR why cant they work on control underworld activities within targeted period of time. The Laws should be amended accordingly considering the needs as it is the case with European parliaments. German laws control almost every crime rigorously, why cant us lankens achieve that levels if we are ready to improve our skills.

    If a machine is defect – products that the machine produces can not be expected as “ satisfactory”. So is the society.Our is a torn society after long held war. Need of the hour is society building not anything else.

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    Samarasinghe, are you serious in proposing that this country can be rehabilitated by the Rajapaksa Brothers? First and foremost if as you or anyone expect the Rajapaksas to build this country with their track record Past and Present, it has to be something MORE THAN A MIRACLE to happen. If as you say, ‘the need of the hour is society building and not anything else’, you expecting the Rajapaksas to do that itself is an indication, that you have to build your mind set first, before the society, as you are part of it.

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      This could well be. I wrote this being out of the country and for the last two decades I was not there. My only source is online news. I did not mean Rajapakshes to rebuild the nation, but whoever be the leader of the country, his or her first priority should be to invest more in society building rather than starting with addtional infrastructure projects. This should be planned at least for serveral years. As made clear in the previous comment, if soceity is totally broken, none of us can expect country to become knowledge hub of the asia.

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    While respecting the writer’s efforts to obtain relevant statistics from genuinely concerned entities, I too feel that he might be more intent on self-promoting his image than anything to do with creating a knowledge hub in Sri Lanka.

    Before Sri Lanka can aspire to these lofty ideals, there’s much by way of the basics that need to be put in place first.

    “One must develop modern, clean hospitals, well-equipped schools and a healthy and intelligent population before driving on carpeted main roads”.

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      Lasantha, development of a country can not be selected, where Hospitals, Schools comes first, before carpeted roads. All these should go hand in hand. I certainly agree everything else should come first before spending on Formula One Race tracks, New Air Lines without improving the existing ones, spending on projects that brings no immediate returns etc. Singapore was infested with Shanties. The transformation with decent housing and the very people being dressed well today, rather than being in rags have changed the whole society. I have seen the housing and roads in Malaysia, it is to the credit of the Politicians there, the upliftment seen today although there might be some sort of corruption. Whereas in ours, there is more corruption than any development and we have got our priorities mixed as the society can easily be led with Cricket Matches on empty stomaches and Hospitals without medicine or not addressing issues on Education for months on end. That is the commitment of our Leaders to develop this country.

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      Lasantha,
      You mean, we should travel along pot-holed roads in tattered buses to wherever we work or to get our day to day businesses going, spending hours on road until we have clean hospitals, well-equipped schools and healthy and intelligent population. Absurd!

      Those of you who live abroad may not know what it was like to move about in rural Sri Lanka just a few years back. I mean before start concreting rural roads and carpeting roads between towns.

      Man, this is not the country that you saw ten years or even five years back. You should understand that people have changed and their want have gone up scale. Every household has at least one motor bike. All enterprising people have gone for a batta. They all want a smooth ride. And that’s why they keep voting for Rajapakses in spite of their many shortcomings.

      It’s good that Eran put together this article but we all know that he is [Edited out].
      Leela

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        Judging by Leela’s comment she seem to be under the misconception, that our entire road net work was pot holed, the busses being tattered and the Country and it’s economy in the backwoods and now MR has brought about a change, the roads carpetted, with newer busses and the public owning mo-bykes, computers, TVs, houses etc. Ah! Yes Leela that was prior to ’77. obviously the time you claim to have left this country in search of greener pastures. The UNP Opening the Economy all these became possible for a society who were earlier denied. In the rush some of those UNPers who were Ministers also helped themselves to Public Funds. That is why the masses defeted the UNP but what has happened thereafter is even worse as the present lot with a Tsunami Fund Embezzler is doing thousand times better and the masses are helpless. The UNP then brought prosperity to the Country with the Mahaweli Project, where new vistas and new roads in the Mahaweli range opened. The houseless, I can not definitely confirm their claims, but certainly many poor in the country were blessed with a house under the Gam Udawa Project. Yet they were thrown out by the masses with the expectation of getting more and now are stuck unable even to bring about change as the Elections are fixed in many a manner. Therefore do not believe that your idol MR is enjoying the seat without change because the masses want so, for the work done. As I said, even with better facilities provided to the masses the powers have been kicked out. So MR is not an exception. It is just a matter of time.

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    gamini,
    You’ve got it wrong. I went to the UK when I was only nineteen and not in the seventies but sixties and not to look for a greener pasture for we already had one but because my father wanted me to study in the UK.

    If you are insisting that roads were not improved tremendously since 2005, buses in village routes had not got better and the mass is not better off now, you must not be living in Sri Lanka right now.
    Leela

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      Dont think that Road constructions were improved since 2005. Road constructions were started from the previous regime together with all telecommunication projects. Sure, feasiblity studies of all of them were made during that time though highway work were done during his terms.
      However, so long they would NOT pay due attention in rebuilding the society which is deteriorating and has reached to appalling levels today – the development of the country cant reach the targets. People s mind should be changed to achieve high productivity levels with the mentalities of the average changed. Only road construction or additoinal other projects cant DEFINITELY bring the country forward.Today youth in SL are much worse than those of in the UK. They dont respect their families. They just spend days with IT gadjets. No matter parents struggle for the supper, grown up children in general dont care – with every 4 th is caught by maraka -drugs.

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      From the horses mouth. Leela went to the UK for studies in the ’60s because his/her father wanted to. Local Education was for the ordinary masses and was not good enough, so naturally he had to leave. So Leela was lucky not to have experienced what the masses were subject to during the ’70 – ’77 period of Curse. Shortages, Queues for everything, Restrictions of sort on everything, even foreign exchange. How Leela’s father managed to spend for his Education is obviously thanks to the Foreign Currency Black market that prvailed then as no one was allowed foreign currency. I am sure he will come out with an answer that he had a relative who spend for him. This was a common excuse trotted out by many in Leela’s shoes. I believe Leela is under the belief that this country developed under MR. Good for her!

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