PwC report provides insights on the challenges faced by start-ups in Sri Lanka

From left: PwC Sri Lanka Chief Operating Officer and Advisory Leader Channa Manoharan and PwC Sri Lanka Director of Corporate Finance and Valuation Consulting Aruna Perera    

Over the recent years, there has been a significant rise in the number of start-ups being established within Sri Lanka, resulting in the creation of a burgeoning sector that many of the country’s business experts regard as an essential factor that would drive the economy of the country forward. 

It is a growing belief within the tech and start-up sector that the establishment and expansion of start-up organisations into international markets would lead to the development of Sri Lanka’s export-based economy and re-establish its marketability on the international stage as a hub for technological and technology-based services.

PwC Sri Lanka, in its capacity as an organisation providing consultation on economic and business-related insights, along with ICTA, have employed its experience and nous to study the nature of the start-up ecosystem of the country in an effort to identify and understand the challenges faced. 

Titled ‘Towards a Start-up Friendly Government’, this document delves into the state of the country’s start-up ecosystem under a number of key sections, classified by relevant operational and macro-economic factors. Chief among these sections is the digitisation of administrative tasks, the facilitation and usage of intellectual property, as well as technology-based laws and regulations. Elaborate and comprehensive, this report has been created with the intention of providing entrepreneurs, business owners, governing bodies and stakeholders of Sri Lanka with a comprehensive account of insights provided by entrepreneurs and stakeholders of start-ups and propose strategies that decision makers could use to better the start-up ecosystem, based on successful case-studies from other countries.

Digitalisation is the modern revolution in commerce and communication, and it is one of the common barriers that PwC have highlighted through this report. While the report shows that government departments are actively involved in resolving the current deficiency, it reports the lack of digitisation for administrative tasks as a key challenge faced by the start-up ecosystem of Sri Lanka. Overcoming this hurdle to successfully to digitalise administrative tasks effectively would lead to a significant improvement in efficiency.

The report also finds that governments of significantly developing economies, such as Singapore and Hong Kong, take an approach to open communication of the governments’ developmental plans through dedicated websites, providing in-depth literature explaining the procedural elements of each development initiative and even offer live chat options to clarify any information for online queries. Sri Lanka does not currently have a unified government resource or website that provides comprehensive information on outlining their entire processes.

Data Privacy, Cyber Security and IP have risen to the global fore influencing government and businesses. Intellectual Property (IP) infrastructure is a legal aspect of Sri Lanka’s business environment that would benefit from being updated. While existing IP laws are robust and can potentially offer protection against IP infringement, due to the resource intensive nature of policing and protecting intellectual property, the country is not ideally conducive to IP sensitive business activities.

PwC Sri Lanka Chief Operating Officer and Advisory Leader Channa Manoharan stated: “The resilience, the courage and the drive of entrepreneurs and start-ups of our country was evident through the pandemic. The ingenuity of these people and businesses have given us a leg up on our path to economic development. Now is the time we examine where we are together as a country, for the continued development of our start-up ecosystem.”

PwC Sri Lanka Director of Corporate Finance and Valuation Consulting Aruna Perera added: “We have prepared this report, hoping it would serve as a centralised document for all stakeholders of the country’s economy. This will provide the information and insights that ICTA requires to take the country’s start-up ecosystem to new heights.”

The report has been made available on the PwC and the ICTA websites, enabling all stakeholders to the start-up ecosystem of Sri Lanka to learn about and act upon positively, influencing both it and the economy of the nation as a whole.