Unlocking Sri Lanka’s full economic potential by leveraging human capital

Sri Lanka’s investment in education has created a highly skilled female workforce. Yet, systemic biases and cultural norms prevent the country from harnessing this talent in full. Addressing these barriers is essential—not only for justice and equality but for driving economic growth and competitiveness. To reach its full economic potential by using most of its educated workforce, Sri Lanka must act now—through policy, organisational reform, and addressing cultural barriers 

Sri Lanka stands out as a nation that provides free education to its citizens from primary to tertiary levels, depriving no child of education. A vision made possible by the late Dr. C. W. W. Kannangara, former Minister of Education through the landmark Free Education Act of 1945. His introduction of Central Schools across the country helped bridge the divide between elite colleges and rural communities, which was instrumental in bringing key reforms to the country’s educational sector. Today, with a literacy rate of 93%, Sri Lanka remains one of the most literate nations in South Asia.

Sri Lanka’s females represent a significant share of the country’s educated talent pool. Nearly 50% of undergraduates who enrol in degree programs in STEM (Science, Technology, and Engineering and Maths) are females, yet, there is less representation of females in the STEM workforce.  As such, the country is not fully capitalising on its human capital, which could be attributed in part to being a patriarchal society.

To reach its full economic potential, Sri Lankan policy makers must address the structural and cultural barriers that prevent women from advancing into leadership roles.

Unconscious bias and its impact on leadership pathways

Unconscious bias operates subtly, shaping decisions and organisational structures without deliberate intent. Over time, these biases become embedded in corporate systems, influencing recruitment, promotions, and succession planning.

 One of the most significant outcomes of unconscious bias is the skewed representation in leadership roles. Women are often concentrated in functional areas such as HR, legal, and communications— in supporting roles that, while critical, may not lead to taking over CEO positions. In contrast, operational leadership roles, which are considered stepping stones to top executive positions, remain dominated by men. This imbalance is perpetuated by biases such as:

• Performance Bias: Men are promoted based on perceived potential, while women are judged on proven results.
• Maternal Bias: Assumptions about family responsibilities limit opportunities for women in demanding operational roles.
• Affinity Bias: Senior leaders tend to mentor and sponsor individuals who resemble themselves—often men—reinforcing male dominance in leadership pipelines.

These biases create systemic barriers, preventing Sri Lanka from fully utilising its educated female workforce.  

Social roles and cultural expectations

Cultural norms continue to shape career trajectories. Women are often expected to prioritise family responsibilities, and workplaces do not provide adequate childcare support or flexi work arrangements.  These factors contribute to mid-career dropouts among women, shrinking the leadership pipeline despite high educational attainment. 

The COVID-19 pandemic exacerbated this issue, leading to widespread job losses. Supporting female entrepreneurship, offering flexible working hours, and ensuring access to micro-SME financing are critical to enhance financial independence and improve gender equity in the workplace. However, post COVID, there was a sharp increase of usage of communication platforms like Zoom, MS Teams – virtual meetings outside the office space, which has made things easier for the female workforce.

Sri Lanka’s female labour force participation rate has stagnated between 31%–35% for two decades, even though women consistently outperform men in secondary and tertiary education.

On decision making roles, Sri Lankan female representation in the Parliament is 22 out 225 seats, accounting for only 9.8%.  In Sri Lankan corporate boards, female Board directors’ representation is only 13.5%.  

 This disconnect between education, higher education and employment represents a significant economic opportunity cost.

  Global lessons: How other countries have closed the gap

Several countries have successfully implemented strategies to counter unconscious bias and improve gender representation in leadership:

• India: Mandated in 2015 that all listed companies must have at least one female board director, accelerating representation.
• Norway: Introduced quotas requiring 40% female representation on boards of public companies, transforming leadership demographics.
• France and Germany: Combined quotas with leadership development programs for women, ensuring readiness for executive roles.
• Australia: Adopted voluntary targets and public reporting, creating accountability and cultural change.

These examples show that policy interventions, organisational commitment, and cultural shifts can dismantle structural barriers and unlock economic potential.

Advocating for gender quotas on corporate boards can help break the invisible glass ceiling .Studies by McKinsey and Company show that companies with more than 30% women in senior roles tend to outperform those with lower female participation.  

The way forward for Sri Lanka

To fully leverage its educated workforce, Sri Lanka must:

• Re-examine succession planning to ensure women are considered for operational leadership roles without any gender bias
• Implement DEI (Diversity, Equity and Inclusion) frameworks and unconscious bias training across organisations.
• Introduce flexible work policies and childcare support to retain women in the workforce and also giving paternal leave for the males to share joint responsibility in raising children
• Set measurable targets for board and executive representation, backed by transparent reporting.

Breaking unconscious bias is not just about fairness—it is an economic imperative. Research shows that companies with diverse leadership outperform peers in profitability, innovation, and resilience.

Real change requires sustained and systematic effort. Policy frameworks must be updated to ensure fair representation. Education systems must promote critical thinking, empathy, and inclusivity from an early age. On a personal level, individuals must be willing to confront their own biases—many of which are passed down through generations of social conditioning—and commit to fostering a more just and inclusive society.

Conclusion

Sri Lanka’s investment in education has created a highly skilled female workforce. Yet, systemic biases and cultural norms prevent the country from harnessing this talent in full. Addressing these barriers is essential—not only for justice and equality but for driving economic growth and competitiveness.

To reach its full economic potential by using most of its educated workforce, Sri Lanka must act now—through policy, organisational reform, and addressing cultural barriers. 

(The author is a member of the Council and The Women Directors Forum of The Sri Lanka Institute of Directors. She also serves as an Independent Non-Executive Director in Boards)