Japan woos Sri Lankan IT sector

Thursday, 18 September 2014 00:00 -     - {{hitsCtrl.values.hits}}

Sri Lanka’s IT and high-tech sector has been energised with the first-ever top level official invitation from Asia’s high-tech power. “After our own research on many Lankan business sectors, we identified the Lankan ICT/BPO sector, among others, as fit to give our development support to and we invite a Lankan ICT/BPO delegation to Japan in the first quarter of next year,” stated Masahide Sakishige, Outgoing Resident Representative of JETRO Colombo on 4 September in Colombo. Representative Sakishige was addressing Minister of Industry and Commerce Rishad Bathiudeen. The meet was both a farewell call as well as a courtesy call by the outgoing and incoming Chiefs of Japan External Trade Organization (JETRO) in Colombo. Bathiudeen extended his warm welcome to Kazuhiko Obama, new Resident Representative, JETRO Colombo. “We like to arrange one-to-one ICT/BPO business matching between Sri Lankan and Japanese ICT/BPO firms in the first quarter of next year – perhaps February or March – in Japan. JETRO can arrange B2B meetings for Lankan IT firms in Tokyo. This will be one-to-one B2B between Lankan and Japanese IT firms. Recently I received several requests from the Sri Lankan IT sector, which wants to expand in Japanese market. At the same time our JETRO office in Japan also received inquiries from some Japanese companies about Sri Lankan ICT/BPO firms. They believe that there is huge business potential in Sri Lankan ICT/BPO and can conduct good business with the Lankan sector. Depending on their evaluation of Lankan IT firms, our interested firms would decide whether to place software orders or to partner as investors,” Sakishige added. This is the first time that Japan has invited a Sri Lankan IT/BPO delegation to Tokyo and facilitated within Japan by JETRO, the powerful Government-related body promoting trade and investment between Japan and the rest of the world with 73 offices in 55 countries. The Japanese “outsourcing industry” is tilted towards enterprise levels, packing demand for cloud computing. It is projected to hit the $ 23 b mark by 2017. As for the Electronics and IT (E&IT) industry, the Japanese companies claim no less than 15% of global E&IT output with annual production increase of 3%. The 2014 estimate for global production by Japanese electronics and IT companies stands at $ 362 v. Of this, only 14% ($ 50 b) is IT/software solutions, while the rest (86%) consists of hardware manufacturing such as computers, semiconductors, communication equipment, and display terminals. The $ 50 b IT/software solutions share signifies that there is promising scope for new players in the sector to increase this rate. “I thank you for your valuable and committed services to promote trade between Japan and Sri Lanka during your stay here,” said Bathiudeen, addressing Sakishige. He added: “Total trade with Japan in 2013 stood at $ 894 m and has seen a steady increase. Japan is a highly-promising market for our IT/BPO sector and on behalf of our industry I thank you for this facilitation. We are ready to send a strong industry delegation in the first quarter of 2014 and I have no doubts that JETRO Tokyo will do its best towards a successful first-ever officially facilitated B2B session in Japan. Support from both governments is essential for this pioneering business cooperation effort to be fruitful. Thanks to the vision of President Mahinda Rajapaksa, our IT/BPO sector recorded $ 719 m exports last year. Japan is a promising market for our IT/BPO exports.” “I have no doubt that new Resident Representative Obama will continue the good work of JETRO in Sri Lanka,” said Sakishige, to which Obama responded in the affirmative. According to the Department of Commerce, total trade with Japan in 2013 stood at $ 894 m, increasing from $ 770.11 m in 2012. Sri Lanka’s major exports to Japan in 2013 were tea (22% of total), apparel (17%), fish and prawns (17%), and coconut fibre/coir (8%). In 2013, Sri Lanka’s IT and Business Process Management (BPM) exports stood at $ 719 m, surging 237% from 2007’s exports of same; 77% of 2013 exports were under BPM.  Sri Lanka has now set a target of $ 5 b IT and BPM exports by 2022 of which it expects 62% to be BPM while also creating 200,000 jobs and 1,000 start-ups by 2022.  To support the growth targets, in its National Budget 2014, the Government proposed a five-year half tax holiday for new partnerships or firms engaging in international services in the field of accountancy, commerce, finance, law, IT, engineering and architecture. After discussions with Sakishige, Bathiudeen joined Obama in discussions and gave an introductory explanation of Sri Lanka’s business and growth outlook to the new JETRO Representative.