Thursday Dec 12, 2024
Thursday Dec 12, 2024
Friday, 16 July 2021 02:58 - - {{hitsCtrl.values.hits}}
Chairman Ajit Gunewardene
Mobility solutions specialists PickMe has ended its most challenging year with pre-tax profit, prompting Chairman and investor Ajit Gunewardene to renew his call for greater use of technology and promotion of digital transformation by policy makers and corporates alike.
Noting that digitisation is already adding significantly to Global GDP, Gunawardena said that tech is a magnet for capital.
He stressed Sri Lanka needs to enable local technology businesses to grow.
“This is imperative and must be given pride of place in all discussions when formulating national policy,” PickMe Chairman said.
“We must get our act together from both a strategic and policy perspective,” he added.
“From a policy perspective,” reiterated Gunewardene, the Government must “encourage digitisation and digital businesses to continue to invest and support economic growth in Sri Lanka”.
In terms of support, PickMe Chief urged the Government to enable a level playing field to compete against the digital multinationals.
“This is relevant to all digital domains, not just to us. All digital platforms should incorporate an onshore company to carry on commercial activity. This will ring fence local operations and create transparency and a level playing field with local entities,” said Gunewardene, adding: “This follows the standard format of traditional multinationals and foreign bank branches.”
In addition to trading activity, all legal contracts could also be with the local entity, he said.
“This makes recourse localised and hence affordable and thereby safeguards the consumer. Overall, this will encourage local competition, minimise foreign exchange outflows and increase tax income,” PickMe Chairman said.
According to him, even Bangladesh had done this. Recently Google and Amazon, two of the world’s largest tech giants, have obtained their Business Identification Number, a mandatory requirement for any business operating in Bangladesh. These two non-resident companies will now pay a 15% VAT on revenue derived onshore and submit returns on total turnover at the end of each year.
Adding to the digitisation of businesses and economies is the Artificial Intelligence revolution. It is a fact that as digital businesses get entrenched and AI gets deployed, there will be productivity gains not seen since the Industrial Revolution.
Gunewardene quoted PriceWaterhouseCoopers estimate that AI deployment alone will add $ 15 trillion to global GDP by 2030.
“This will be the new world order which will take place at an accelerated pace. Sri Lanka must be an active participant as being a spectator during this revolution is not an option. Speed is of essence,” pointed out PickMe Chairman. He said capacity building followed by action at a policy level is a must.
“This will ensure that Sri Lanka will also enjoy exponential GDP growth and not be left behind, which has been our historic tragedy. If we are to pull ourselves out of the current economic predicament and stay relevant, the only way is to embrace and participate actively in the digital and AI revolution,” Gunewardene said.
Another aspect that must be addressed according to the PickMe Chairman is the ability of technology businesses to attract capital.
“The capital markets world over are changing rapidly. Just 17 years ago, GE, ExxonMobil, Pfizer, Citigroup, BP, AIG, Walmart, Bank of America, Intel were nine of the ten largest companies by market cap in the world. None of them are in the top ten now,” recalled Gunewardene, who was one time the Chairman of the Colombo Stock Exchange.
He said a stark reflection of the failure of economic policy is that nothing much has changed on the Colombo Stock Exchange over the last 25 years.
“Leaving the past aside, let›s look to the future. What should our top 10 look like in 10 years? If it’s a shuffle of the same lot of companies, we can conclude that we as a nation have failed. It would mean that we have not evolved and not participated in the technology revolution, and as a result we have not attracted the badly-needed capital into Sri Lanka,” said Gunewardene, who was a former Deputy Chairman of premier blue chip John Keells Holdings.
Noting that tech is a magnet for capital, he said bricks, mortar and cheap labour are no longer the game.
“We need to enable local technology businesses to grow, scale and attract capital. This is imperative and must be given pride of place in all discussions when formulating national policy,” emphasised PickMe Chairman.
Focusing on the company, he said FY21 truly tested the resilience of all businesses. In his opinion, PickMe passed with flying colours.
“From pivoting and creating a new market vertical, raising a Series B round of funding to buffer the shocks of the pandemic and adjusting the operating model to function more efficiently and at high productivity, the company closed the year reporting a Profit-Before-Tax. This is nothing short of remarkable in this new and uncertain operating environment,” PickMe Chairman said.
He expressed his confidence that PickMe, a champion outfit, is going to be a major force in the digital revolution that will drive economic activity in this country over the next 20 years.
He said PickMe has shown how technology attracts capital, enabling it to continue to invest, innovate and grow, and how technology levels the playing field by democratising access to the economy.
“We will continue to entrench ourselves in the digital ecosystem and enable inclusive economic growth,” Gunewardene said, adding the company has a world-class team of engineers and managers.
“Technology and execution on the ground together with adequate capital has been our winning combination. We will continue to invest and innovate. I have no doubt that we will be playing our part in the digital revolution in Sri Lanka and in the process, we will be part of the top ten on the CSE in the not too distant future,” Gunewardene said.
