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SLASSCOM Chairman Mano Sekaram (4th from left) exchanging the MOU with Norwegian Industry Development Director of ICT Fredrik Syversen. Norwegian Ambassador to Sri Lanka Thorbjørn Gaustadsæther, Norwegian Foreign Affairs Deputy Minister Tore Hattrem and Foreign Affairs Deputy Minister Dr. Harsha de Silva is also present – Pic by Upul Abayasekera
By Shehana Dain
Sri Lanka’s efforts to further strengthen the modernisation of its economy via technological backing got a big boost as ICT Norway and the national IT/BPM Chamber of Sri Lanka, SLASSCOM, signed a memorandum of understanding (MoU) on Wednesday (1 June), vowing to enhance start-ups and entrepreneurship in the local ICT sector.
Economic synergies between the two countries run deep as Norway looks to transform its role from a civil war mediator to a business partner. The MoU materialised subsequent to the Norway matchmaking program in early May this year, ‘ICT Gateway’, which enabled Sri Lankan IT firms to link up with their Norwegian counterparts to explore global opportunities.
Indicating that authorities should take this as a clear sign that Norway wants to partner Sri Lanka in the area of business and economic development, Norwegian State Secretary Tore Hattrem said that ICT was the backbone in almost any activity undertaken by public and private enterprises.
“In maybe four to five years from now some telecom giants predict that more than 80% of the world’s population will have a smartphone. Just think what this opens up; for example education. I am glad to hear that the two organisations will look into the possibility of establishing start-ups and entrepreneurial communities. This will help create new companies and jobs for skilled young people here in Sri Lanka,” he added.
The MoU will look at how the partnership can gain access to capital and expertise while focusing on global growth and market access. It will also give prominence to IT literacy in Sri Lanka.
ICT Norway will closely concentrate on vocational training and skills development and closing the gender gap in the industry. The association also plans on giving fresh acceleration to students by making coding an integral part of the education system while exploring openings for business and educational development in the EdTech sector.
Moreover, the MoU concentrates on green IT and will focus on waste management systems pertaining to environmental issues concerning the industry, ICT as a tool for green growth and energy management.
ICT Norway Director of Industry Development, Fredrik Syversen, said that he was rather amazed to find out that 100 Norwegian IT firms were already in operation in Sri Lanka as joint ventures and other business forms, adding: “This endorses our presence in the right place at the right time.”
Elaborating on the gender gap issue in the ICT sector of both countries, Syversen highlighted: “We’re looking closely at the gender gap and for me coming from Norway our IT sector has 23% women and I come here to Sri Lanka and find out that 37% of the workforce in the IT industry are women. Therefore we have something to learn from you guys as well. When it comes to green solutions we are both on the same level and it’s also good to know we can learn from each other.”
SLASSCOM Chairman Mano Sekaram, who signed the MoU representing the Sri Lankan IT/BPM industry, declared that the growth obtained by the tech industry in Sri Lanka, which was $ 1 billion this year, up from $ 850 million in 2015, is quite substantial.
“We became the fifth largest export industry in Sri Lanka in just 15 years; with all due respect to my tea colleagues, they took 150 years to reach $ 2 billion in export value. We want to become a $ 5 billion industry and create 200,000 jobs. This will be predominantly fuelled by the 1000 start-ups. The next growth of our industry belongs to our younger generation and that’s why this cooperation is very important,” he stressed.
Meanwhile, the Norwegian Business Association of Sri Lanka was also launched at the event to perform an advisory role for new investors venturing to the island nation.
The association also plans on promoting trade in industry, finance, agriculture and other economic activity while building more businesses in Sri Lanka.
Norwegian State Secretary Tore Hattrem called on Government authorities to closely monitor the Norwegian pension fund’s investment portfolio as it could be critical for the country’s capital inflow.
Addressing a reception where an MoU was signed between ICT Norway and SLASSCOM, Hattrem said: “The Norwegian pension fund is the world’s biggest sovereign wealth fund and it has recently started investing in Sri Lanka. In 2015 there was a portfolio investment of $ 31 million, this sounds like a modest sum but one has to remember that the total fund is close to $ 1000 billion which represents 1.5% of the value of shares and stocks of the whole world. So if the sovereign wealth fund decides to increase the Sri Lankan portfolio that would be a lot for Sri Lanka when it comes to capital.”
As of the valuation in June 2011, it was the largest pension fund in the world, but it is not a pension fund in the conventional sense as it derives its financial backing from oil profits, not pension contributions.
Since 1998, the fund has been allowed to invest up to 40% of its portfolio in the international stock market. In June 2009, the Norwegian Finance Ministry decided to raise the stock portion to 60%. In May 2014, the Central Bank governor proposed raising the rate to 70%. The Norwegian Government planned that up to 5% of the fund should be invested in real estate, beginning in 2010. The fund’s current investment strategy dictates 60% equities, 35% fixed income and 5% real estate. Of the fixed income sector, 70% is invested in bonds issued by governments and 30% is issued by the corporate sector.
Emphasising that Norway stands by the Sri Lankan business community so that the island nation can continue its transition from a middle income to a higher income country, he said that to promote Sri Lanka as a investable nation and attract serious investors the Government should pitch a predictable environment and a solid tax regime.
