Entrepreneurship plays a major role in Sri Lanka’s economic development. But entrepreneurs in Sri Lanka are facing greater challenge in the modern businesses environment under tough competition, rapidly changing new technologies and globalisation of products and services.
India and China have contributed to the economic growth of the world by their Small and Medium Enterprises (SMEs), which are activated by untiring entrepreneurs. A large percentage of the 500 blue chip companies in India once started by small-time entrepreneurs. In Sri Lanka too, there are hundreds of thousands of small-time entrepreneurs tirelessly working on by activating the power base of the Sri Lankan economy.
A large percentage of Sri Lankan population is living in rural areas, which consist of more than 75% percent of the island’s population. Small industries play a major role in the rural areas for creating an economic environment in which large firms flourish and contribute to export earnings. So, it is important to encourage the entrepreneurs in rural areas of Sri Lanka to contribute to the global economic growth and get its share of the benefits.
Mindset of Sri Lankan entrepreneurs
But it is important to study the mindset of Sri Lankan entrepreneurs if we want to encourage them. A study by Helan Ramya Gamage, Donald Cameron and Elizabeth Woods of the University of Queensland reveals that the entrepreneurship models in existence in Sri Lanka are often based on the assumptions of Individual Achievement and personality trait theory.
They further describe that empirical research into entrepreneurial motivations in Sri Lanka is rooted not in a need for individual achievement, but in the conscious or unconscious need to satisfy a sense of social intimacy. Their studies shows that social power, social relations and collectivism create a setting for entrepreneurial motivation in Sri Lanka, which is almost directly counter to Western ideologies of entrepreneurial motivation.
Taken into consideration the above factors, Sri Lankan entrepreneurs should be motivated with appropriate strategies by the concerned institutions and authorities.
But it is very difficult to get investment in Sri Lanka, which is one of the most important resources for entrepreneurs. Entrepreneurs are utilising for their ventures what they have saved for years or by selling the jewellery of their families.
There is hardly any support in Sri Lanka for entrepreneurs with ideas, and the institutions are more supportive to those who are well-connected.
Average entrepreneurs in Sri Lanka receive zero amount of support though they have very innovative ideas and marketable business plans, which could be easily turned into successful ventures with sustainability in the long run. Because of the naive supporting system, the entrepreneurs get discouraged in no time.
A very successful online shopping portal, anything.lk, is funded from abroad and not by Sri Lankan banks. If an average Sri Lankan entrepreneur goes to a bank with his idea of a new venture, it won’t be considered easily for a bank loan. Even if they consider with securities and guarantees the interest rates are not meaningful for a start-up venture.
Banks and other financial institutions in Sri Lanka haven’t included any services in their normal portfolio which supports entrepreneurs with the motive of avoiding risks. Even if they are willing to consider on a rare basis, it will have a lot of documentation and time-consuming process and not really helpful to the entrepreneurs.
The institutions and authorities should take into consideration to facilitate the entrepreneurs who could go into the global market place. Especially the online payment facilities from the banks are cumbersome in Sri Lanka.
HSBC has some arrangement with Global Payments Inc. and it charges a couple lakhs, but for the processing it will take a couple of weeks. At the end Global Payments Inc. will give half the code and let the customer code the interface without shipping a working payment gateway.
Many countries have well utilised the PayPal payment mode, but in Sri Lanka it is not there and no banks have so far taken any initiate to introduce it in Sri Lanka.
None of these are to say that entrepreneurship doesn’t happen in Sri Lanka, or that it absolutely requires certain support.
A good example in the recent time is extreme-seo.net which was started by a small-time entrepreneur Sharanyan Sharma three years ago in the suburb of Vavuniya, a northern town in Sri Lanka with hardly any investment but his innovative idea. Now there are 60 employees working at his search engine optimisation and social media marketing company, which serves clients base around the world.
Sri Lanka has talented young entrepreneurs with ideas that aren’t developed into full potential, but with a bit of support, primarily in terms of financing, they could monetise their ideas and reach the nooks and corners of the world.
(The writer is a Member of the Association of Business Executives (U.K.) and a partner of Selvasingam Consultants. He can be reached via email@example.com.)