Transforming industries for economic revival in Sri Lanka

BY REV. PROFESSOR WIJITAPURE WIMALARATANA

Sri Lanka, an island nation with rich resources and a strategic location, is at a critical juncture in its economic development. To recover sustainably from the recent economic crisis, the country needs a strategic approach to revitalise its industries and pave the way for sustainable growth. 

Transforming the existing sectors and fostering the emergence of new ones is paramount to achieving this goal. This transformation requires a multi-faceted approach, encompassing technological innovation, skills development, foreign direct investment, active participation of the local private sector, public sector investment in strategic areas, planned investment and a supportive policy environment tailored to the unique context of Sri Lanka.

One of the crucial steps towards economic revival in Sri Lanka is identifying and prioritising key industries with high growth potential, in addition to apparel and other established sectors. While traditional sectors like tourism and agriculture remain vital, the focus should also shift towards emerging industries with global relevance. These include renewable energy, leveraging Sri Lanka’s abundant natural resources, information technology and business process outsourcing, capitalising on the growing pool of skilled talent and high-value manufacturing, focusing on niche markets with competitive advantages while safeguarding the country’s delicate environment.
Technological innovation is a critical driver of industrial transformation. Sri Lanka must embrace automation, artificial intelligence and digitalisation to enhance productivity and competitiveness across all sectors. This requires investment in research and development, fostering a culture of innovation and promoting technology adoption through targeted incentives and public-private partnerships, with the active participation of national universities. Furthermore, establishing technology parks and innovation hubs can facilitate knowledge transfer and collaboration between research institutions, universities and businesses.

Developing a skilled workforce

Developing a skilled workforce is essential to support the growth of transformed industries. Sri Lanka’s education and vocational training systems need to be aligned with the demands of the new economy. This involves promoting STEM education, incorporating digital literacy into curricula and establishing specialised training programmes in areas like data science, artificial intelligence and renewable energy technologies. Furthermore, initiatives for upskilling and reskilling the existing workers are crucial to ensure a smooth transition and minimise job displacement. Consideration should be given to expanding the English language instruction in secondary schools, universities and other higher education institutes to enhance global competitiveness.

Creating a conducive business environment

Creating a conducive business environment is vital for attracting investment and fostering industrial growth. Sri Lanka must streamline regulations, reduce bureaucratic hurdles and ensure policy consistency to provide a stable and predictable environment for businesses. Improving infrastructure, particularly in areas like transportation, logistics and digital connectivity, is also crucial to enhance competitiveness and facilitate trade.
Developing modern industrial cities with essential facilities for employees in the industrial sector is recommended. These cities should be designed and developed to meet the global standards, comparable to similar advanced cities worldwide.

Addressing sector-specific challenges

Addressing the challenges faced by specific sectors is critical for their successful transformation. In agriculture, as an input provider to the industry, promoting sustainable practices, investing in modern technology and improving market access for smallholder farmers are essential.

In industry, diversification beyond the traditional apparel sector is a must. Focusing on eco-friendly industries with private and public sector participation and creation of quality jobs can attract new segments of top-class investors and enhance resilience.

Leveraging Sri Lanka’s unique advantages

Sri Lanka’s unique geographical location and rich biodiversity offer opportunities for developing niche industries with global appeal. Promoting a sustainable and diversified industrial sector that focuses on eco-friendly practices and community engagement can attract environmentally conscious investors and partners. Similarly, leveraging Sri Lanka’s traditional knowledge in cottage industries and traditional technology can create a new chapter for a harmonious expansion of the old and modern sectors together.

Financial inclusion

Financial inclusion is crucial for fostering entrepreneurship and supporting the growth of small and medium-sized enterprises (SMEs). Expanding access to credit, promoting microfinance initiatives and providing financial literacy training can empower individuals and businesses, particularly in rural areas, to contribute to economic growth.

Regional development

Regional development is essential for ensuring that the benefits of economic growth are distributed equitably across the country. Promoting investment in infrastructure and creating economic opportunities in rural areas can reduce regional disparities and foster inclusive growth.

Conclusion

In conclusion, transforming industries is not merely about adopting new technologies or shifting economic activities. It requires a holistic approach that addresses the specific challenges and opportunities in the Sri Lankan context. By prioritising key sectors, investing in innovation, developing a skilled workforce, creating a supportive business environment and promoting sustainable and inclusive growth, Sri Lanka can revitalise its economy and achieve long-term prosperity. This transformation journey requires collaboration between the government, private sector and civil society, working together to build a resilient and thriving economy for future generations.

(Rev. Professor Wijitapure Wimalaratana is President of the Sri Lanka Economic Association and Vice Chancellor of the SANASA Campus, Kegalle)

SLEA Annual International Conference

The Sri Lanka Economic Association (SLEA) will hold its Annual International Conference on December 6 and 7, 2024, at the Sri Lanka Association for the Advancement of Science (SLAAS), 120-10 Vidya Mawatha, Colombo 7. The inaugural session on December 6 will be followed by technical sessions on December 7, 2024.

SLEA Annual International Conference 2024 will be inaugurated by the chief guest, Industry and Entrepreneurship Development Minister Sunil Handunnetti. World Bank Group Joint Country Representative for Sri Lanka and the Maldives Gevorg Sargsyan will be the guest of honour. The keynote address will be delivered by University of Colombo Economics Department Senior Professor Prof. Sirimal Abeyratne.

Interested parties are kindly invited to contact the SLEA at 011 2559478 or [email protected].