Setting out Sri Lanka’s knowledge export roadmap

Sri Lanka’s ICT/BPO industry has been set the daunting target of reaching one billion dollars in exports by 2015 which will in turn require several supporting factors to be strengthened, including the generation of 80,000 jobs. Acting as the catalyst of growth in the country’s ICT/BPO industry, SLASSCOM took it upon itself to how these targets could be met through the SLASSCOM HR Summit 2012.

Held last week at the Cinnamon Lakeside, the summit set out Sri Lanka’s knowledge export roadmap. The third HR conference facilitated by the SLASSCOM HR forum, this year’s summit focused on empowering HR executives and managers to identify the challenges of HR in the current global economy and to take the lead in nurturing the performance of their organisations.

Boosting tertiary education rates

In his opening remarks, SLASSCOM Chairman Sujiva Dewaraja noted that the ICT/BPO industry is already one of the top five exporters in the country, employing a workforce of 35,000, with exports amounting to $ 400 million.

“The mission of SLASSCOM to be the catalyst of growth for Sri Lanka’s IT/BPO knowledge services industry. The foundation for this is our education system and a lot of what we have achieved in the past has been due to the strength of our education system and what we achieve in the future will also depend on it,” he stated.

Commenting on the current status on the education system, he said that he didn’t wish to cast blame on any party involved but fervently wished that all parties would come together to resolve their current differences and set the country back on the path where it needs to head in terms of the education system.

He observed that the ICT/BPO industry is one that provides very desirable workplaces and is therefore sought out by the country’s youth which in turn has made it harder for manufacturing industries to find people to work in such sectors.

“I think our industry is a great example to politicians and leaders as we have no disputes and strikes – people in governments should promote these kinds of industries because we have no record of strikes disputes – politically motivated or otherwise. The industry has been a darling of the Government,” Dewaraja added.

While Sri Lanka boasts one of the highest literacy rates in this part of the world and high rates of primary and secondary enrolment, the tertiary enrolment rate is only five per cent which is extremely low even by regional standards which is a deficiency that needs to be addressed.

Another area that should draw the attention of influential people in the industry and policy makers, he stressed, was the low levels of English amongst Sri Lankans.

“We need to internally regulate practices to be ethical and align them with the national interests to achieve our goals. The cost effectiveness of our HR is a competitive advantage we have but this is not a sustainable advantage. We can’t always be a low cost destination but while it lasts, we should make the most of it. We should not adopt practices that artificially make costs and wages go up,” Dewaraja asserted.

“Let’s also ensure we have ethical practices in recruiting, hiring and firing people because being ethical is very important now especially with foreign investors showing a great interest in sustainability and fairness of practices within the industry.”

The roadmap – is it achievable?

The keynote address at the forum was delivered by Founder Chairman of the Information Communication Technology Agency (ICTA) MP Eran Wickramaratne whose address was titled ‘Sri Lanka’s knowledge export roadmap – is it achievable?’

“Sri Lanka is known for the export of cheap labour. While it is the intension of the Government to turn it into a knowledge hub, the road to make Sri Lanka known as an exporter of knowledge requires a meaningful commitment of resources by the Government and all other stakeholders,” he stated.

“If Sri Lanka is to be known as a knowledge process outsourcing destination, we have to set our sights on increasing our IT-BPO/KPO revenues above the worker remittances which grow annually by 15 to 20 per cent within the next decade.”  

The IT/BPO industry is dependent on having a steady supply of high quality IT-BPO professionals. Therefore the human resource availability is the key critical success factor, he observed, adding that 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 satellite connectivity.  Office infrastructure and road networks are improving but the power supply is less reliable and too expensive, he noted. The legal infrastructure is largely in place with Sri Lanka being a signatory to international treaties. However, the enforcement of commercial contracts in timely manner is yet to be achieved.

“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 Gartner have rated Sri Lanka for financial attractiveness and as a top destination in the Asia Pacific, investment has not materialised in significant amounts.”

The slowdown on the European and North American economies which are Sri Lanka’s largest trading partners has major implications for the IT-BPO sector too. The country has attracted some of the prestigious global brands, but generates relatively small revenues, Wickramaratne pointed out.

“The single critical success factor is the available human resources. 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 24/7 work environment where men and women have equal access,” he stressed.

India produces more than three million graduates a year, while Sri Lanka graduates 22,000 from its state universities. He hazarded 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. He noted that a knowledge process outsourcing industry requires quality and reasonable supply of people.

Sri Lanka’s low investment in education has been rapidly declining in recent years. Bhutan, Nepal, Pakistan, Cambodia, Indonesia and 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 percentage of total expenditure, or  the investment per university student, or the research expenditure as a percentage of university expenditures are compared across countries both in Asia and Europe, Sri Lanka’s under investment in education becomes apparent.

“We must truly be amazed at the quality of our graduates for such meagre investments that 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. You, the private sector can do it – provided the Government understands the priority of investment in human resources.”

Employee diversity

Addressing the gathering on employee diversity, MP Rosy Senanayake took to the podium next, first commenting on the education system in the country.

“PPPs are absolutely essential at this point in time for education. Three years have passed since we won the war and we have a golden opportunity to make changes. If you are to reach these goals in three years, you need to think smart, differently and be able to partner with the Government. Education to me is the key to reaching these goals. However, the education system in this country is like a pyramid – it starts very well at the bottom but dwindles towards the top.”

The world is evolving into a knowledge economy, but where is Sri Lanka, she questioned. “It is a very sad state of affairs – your industry can do so much through your CSR programs to groom the younger generations to take on the challenges of the future – this is what is needed. Do we even talk about the triple bottom line: environmental and economic sustainability and social issues?”

Sustainable development is key, she stressed, noting that there needs to be a mindset change towards which the private sector could do a lot. Science, technology and innovation are the way to move forward, she added.

Moving on to employee diversity, Senanayake observed that people think that ethnicity refers to merely race, religion and gender, when it is in fact much broader. When talking about employee diversity, it is important to understand how the conventional dimensions affect performances, success and interaction with others.

“The best example for me is what I have faced – the fact that I am a woman, the fact that I belong to the majority community but minority religion – these are some of the stumbling blocks I faced when I was entering politics.”

Gender has always become an issue when talking about barriers. In the IT/BPO industry the ratio of men to women is 61:39, which Senanayake dismissed as not being good enough, seeing that 53.8 per cent of the population in the country consist of women.

“Even the women in Parliament, except for myself and another woman, have come through some connection in the family with politics or come from the national list except for myself and another woman. There are more than 2,500 trained women waiting to take on responsibilities at a local level but they don’t seem to get nominations from their respective leaders and this seems to be very much so even in the private sector,” she stated.

She added that the talent outside Colombo also needs to be harnessed.

“I believe that people have diverse abilities and skills and they should be harnessed and cultivated because in a group, you will always have multifaceted, diverse people. In order to cultivate and enable these skills, especially if we are to reach these goals, it needs to start at the primary level. The corporate sector needs to be a voice to change the education system.

“I’m glad that the professors and teachers are on the streets fighting the good fight. If we are to reach these goals, we need to change the entire system in this country and a lot of work is needed for this change to be made. I’m hoping the private sector could be a strength and put their foot down and say that we need these changes to be made in order to reach our goals to not only to the prevailing regime, but also the opposition.”

Pix by Upul Abayasekara