Sri Lanka’s digital economy has reached 4.37% of GDP: Policy paper

From left: Jayantha De Silva, Sachindra Samararatne, Dr. Piergiuseppe Fortunato, Chanuka Wattegama and Dr. Tauhid Ahmed

The Information and Communication Technology Agency (ICTA) of Sri Lanka in collaboration with UNCTAD (United Nations Conference on Trade and Development) launched a Policy Paper on the Digital Economy of Sri Lanka at a virtual event held recently. 

The paper, titled ‘Digital Economy of Sri Lanka: National Goals and Lessons from the South’ will facilitate benchmarking Sri Lanka against the Digital Economy of the People’s Republic of China.

The Chief Guest at the event was Jayantha De Silva - Secretary of the Ministry of Technology while the Keynote Speaker was Dr. Tauhid Ahmed - Executive Director at the Institute for Development of Economics and Finance, Indonesia. Dr. Piergiuseppe Fortunato - Economic Affairs Officer of the UNCTAD delivered the welcome address and introduced the paper after which Chanuka Wattegama - Director Policy of the ICTA presented the details of the paper to the online audience.  

The event was moderated by Sachindra Samararatne - Director of Startup Ecosystem Development of the ICTA.
Sri Lanka remains optimistic in the middle of its post-COVID-19 economic recovery, given its relatively developed digital landscape with more than 60 percent of the population owning mobile phones and a significant number accessing the Internet on a regular basis, said the paper. The Digital Economy in Sri Lanka, estimated to be US$ 3.47 billion or 4.37 percent of GDP, is gradually emerging. Sri Lanka’s ICT/BPM workforce is supposed to reach 300,000 from 125,000 in 2018, which would then be supporting a US$ 3 billion industry in 2024, from the current US$ 1 billion.

Sri Lanka has identified ‘Building a Technology-based society’ a key national initiative in its National Policy Framework (NPF) ‘Vistas of Prosperity and Splendour’ adopted in December 2019, which constitutes of 10 key policies aimed at achieving the fourfold outcome of a productive citizenry, a contented family, a disciplined and just society and a prosperous nation, the paper further said. 

Information and Communication Technology Agency (ICTA) of Sri Lanka, the apex ICT institution of the Government, was assigned the task of implementing the policy guidelines. ICTA’s scope relies on three pillars: Digital Government, Digital Economy, and Digital Society. The Digital Economy strategy is further subdivided into five key themes: Technology Industry Development; Startup Ecosystem Development; Technology Diffusion; Capacity Building; and, Regional Cluster Development. Digital Laws and Policies have been identified as enablers.
During his welcome address, Dr. Piergiuseppe Fortunato pointed out, “Sri Lanka has to take advantage of changes in the global economy. It is evident that the supply side and balance of power are changing, along with the demand side and it changes the ways of production and how they are being delivered. The global value chain is now more platform-oriented while big data is prominent and useful for value-added use. This policy framework can provide opportunities for Sri Lanka to facilitate access to big data and build capacity for big data. In order to make companies to use big data, different tools need to be enabled which are addressed in the paper. All of this is evident by what China has done until now.”

Presenting the paper, Chanuka Wattegama highlighted what lessons Sri Lanka could learn from the most advanced Digital Economy in the South – that of the People’s Republic of China. China’s Digital Economy is the direct result of the recent favourable policies followed by the Chinese government. They include policies in building network infrastructure, acceleration and deep integration of the Internet with the real economy, and enhancing information technology capabilities in all aspects. 

Digital transformation in China was also possible because of a comprehensive strategy that focused not only on the supply side but created the environment to expand digital infrastructure. Data was also recognized as a key resource for the development of the Digital Economy which was followed by the implementation of data governance policies.

Jayantha De Silva said, “Successive governments in Sri Lanka have done a lot of work and had numerous plans to bring this country in line with the digital transformation. A key aim is to encourage more Foreign Direct Investment to Sri Lanka from Multi-National Companies, through the construction of “Techno Parks” with state of the art facilities, two of which are already under construction. Consequently, creating more job opportunities to incentivize the retention of trained youth as well.