Sri Lanka aims to be paradise for high-end outsourcing
By Poornima Weerasekara
The need to position Sri Lanka as a provider of top-end, high value adding outsourcing destination was highlighted yesterday at a CEO’s conference, titled “Offshore to Sri Lanka.”
The conference organised by the ICT sub-committee of the Ceylon Chamber of Commerce and the World Bank in partnership with the Board of Investment (BOI) and the Information and Telecommunications Agency (ICTA) comprised of industry experts, venture capitalists and over 150 public and private sector CEOs. It aimed to create awareness about Sri Lanka’s potential as an off-shoring destination and to galvanize CEO’s into collectively realizing this potential.
“Sri Lanka has the largest number of UK qualified accountants outside of UK. This itself is a unique differentiator to position Sri Lanka as a provider of high quality financial services,” World Bank Senior Economist Ismail Radwan said.
According to him although Sri Lanka needs to focus on creating jobs with the low-end, low- value adding call centre type of business process outsourcing (BPO) ventures the long-term focus should be to position itself as a provider of “knowledge based outsourcing services”. Sri Lanka’s inability to compete with countries like India and China in terms of the number of graduates and the size of the skilled labour pool necessitates it to move into this niche market.
The World Bank Senior Economist highlighted five key policy changes required to propel Sri Lanka up the off-shoring value chain. Achieving peace and political stability, expanding and improving education, removing regulatory barriers, specially with respect to labour laws, deregulating the telecommunications market and consolidating industry associations in the off-shoring sector was seen as key to projecting Sri Lanka’s image as an effective Off-shore destination.
Echoing similar sentiments WTP Capital CEO Abhishek Jain noted that the only sustainable way to provide off-shore services is to make “knowledge services” the long-term focus as it utilises Sri Lanka’s key strength – it’s highly skilled human capital. “It also helps to reduce the impact of certain weaknesses that hamper Sri Lanka, like the high telecommunications and electricity charges,” he added.
BOI Deputy Director General for Marketing Duminda Ariyasinghe highlighted the range of incentives provided by the BOI, specially to promote the ICT sector. “It is the only sector in which the BOI does not require a minimum investment to grant tax concessions,” he said. “Recognising the importance of a string infrastructure backbone, the BOI also grants incentives of up to 12 years for investments in these areas, such as special economic zones, IT parks ad telecom services,” he added.
ICTA Chief Executive Officer Manju Hattotuwa added that “the government’s role as a facilitator and catalyst in developing the off-shore sector is a crucial one. A successful strategy for this needs to include measures to improve telecom regulatory quality, expand internet access and expanding the access to scientific and technical tertiary education.”
NeoIT Managing Partner Avinash Vashintha and author of “The Offshore Nation” stressed that “clients do not want to put all their eggs in one basket. They are actively seeking other centres of excellence to establish offshore operations, other than India, in order to spread risks.” The potential for Sri Lanka to act as a disaster recovery zone or business continuity hub for South Asia is also considered by industry experts as another alternative strategy that needs to be explored.
The global outsourcing industry amounts to US$100 billion and is growing exponentially at more that 30% per annum. India, the outsourcing giant of the region earns US$ 20 billion via exporting IT services.
Source: Daily Mirror
Basing from this article I think Outsourcing already has a major hold in the asian market.