Drive the nation towards 'IT for all by 2010'
The Government can encourage small, medium and large-scale companies
to get involved in this sector by providing necessary incentives and
support. There is a huge potential in the domestic sector in the country
to use software packages starting
from small packages such as payroll,
HR etc. up to ERPs (Enterprise Resource Planning) in order to improve
their businesses through the improvement of the efficiency. Most of the
non-IT companies available in the country do not know the value of
software packages hence the marketers in the software companies can
visit every corner of the country and promote (B2B) their own packages.
They can use agents of the entrepreneurs scattered in the country to
educate the businessmen through them. This is one of the lucrative areas
to improve the financial side of the software companies to come up.
We should have a mechanism to help our skillful programers in the
area of business even to start small-scale companies and improve up to
medium scale companies and subsequently to tie-up with big companies
either local or foreign in order to deal with the export market.
In Sri Lanka there is a company in the BoC Merchant Tower, Colombo-03
where they are providing cubicles with all necessary basic facilities to
run small-scale software based companies for a reasonable monthly rent.
Other than providing electricity, telephone, network and leased-line
facilities to use Internet they provide common photocopy, conference
room, lunch room etc. and organising workshops to improve their
knowledge in various aspects. Once your company becomes matured, you can
flyaway from them for better prospects i.e. bigger place or your own
building. This is like your premature baby keeping inside the incubator
in a hospital until the baby is matured. Further, if you need money,
they will organise venture capital funds through the foreign investors
after evaluating your strengths and the product developed by you.
Venture capital concept
The venture capital concept has been the main source of finance for
software industry around the world. This is a well-known concept
existing in vogue in the world and it could help small-scale companies
and the talented individuals or a team of experts to become giants other
than acquiring foreign currency.
However, non-existence of a proper IT environment with a clear vision
of the country these companies can do very little, hence again the
government should intervene broadly. The software sector cannot be
ignored, but we should educate local investors and they must try to
understand the business. In the past decade or so, the only industry,
which has been consistently growing, and that too at a good rate, has
been the software sector. Any investor, who has not touched this sector
before, will be reluctant to invest their hard-earned money in new areas
In India, lot of non-IT companies had diversified their businesses to
the IT industry and subsequently able to reap the real harvest than
their area of traditional businesses therein. Currently in Colombo we
are having three giants in the IT industry namely Vertusa, Millennium IT
and IFS who are involving in exports of their own software with the help
of around 500 qualified employees (Engineers and other degree holders)
per each company.
However, the Government can encourage other non-IT but well
established companies involved in the other trades (i.e. garment) such
as MAS Holdings, Brandix Group to make them diversify into this golden
industry. Presently they are handling majority of workers who are having
hands on skills but with proper HR management mechanism, which is very
vital and different art altogether to get things done from human beings.
These companies are having good skills to negotiate with foreign buyers
and work towards a given plan by the buyers within the target. This
practice is very important for the IT sector as well. We can use foreign
investors who are having thrust to invest money for profitable and
growing businesses like IT and can use same to earn foreign currency.
We should thank the present Government for its commitment shown
through the Budget 2007 to concentrate on developing the infrastructure
facilities as a basic but necessary foundation for the development of
the country. If we consider the late President R. Premadasa's
200-garment factory program, his idea was to bring the development from
town to the villages and providing job opportunities for the people in
the rural areas. When we compare IT with the garment industry, computers
mean sewing machines, raw materials such as clothes and other items mean
human (knowledge) and the data or information means finished goods. If
you set up a garment factory you should transport raw materials and the
finish goods from the port to the factory and vice versa via roads. Then
you should require a proper road network with less traffic. In the case
of IT, transportation of data or information means transmit them via the
high-speed telecommunication lines instead of using the roads.
If we consider the garment factory it is an important area of
business to provide jobs for the people who are having hands on skills
with low profile of education (machine operators). In the IT industry we
can utilise the educated people and improve the economy with high volume
of income, which is vital for economic development of the country and to
provide the jobs for educated people. Without any doubt we should bring
equal development opportunities to all areas of the country since 52% of
the GNP earned by the Western Province whereas balance 48% is from all
other provinces. Luckily the present government has understood this
imbalance economic situation. Especially the majority of the people who
are in the southern province are well educated but because of
non-existence areas of proper opportunities they have to migrate to
Colombo and similar towns. But if the government can start 'Special
Economic Zones' (SEZ) for the ICT based industry, we can make a clear
change in terms of generating income and jobs.
Software Technology Parks (STP)
In India, there are special IT - industrial zones called 'Software
Technology Parks'. Government is providing lot of facilities such as
lands, basic infrastructure, tax exemptions,... etc., and more than the
benefits, that we provide for BOI companies in Sri Lanka. India has
established more than 17 STPs successfully and more than 1,300 foreign
companies have registered in these parks. In fact during the first visit
made by the President to India it is reported that he is interested in
starting same in Sri Lanka as well.
We can start such parks in the selected provinces and districts such
as Matara, Galle, Kurunagala etc. based on the population of educated
people in particular areas. According to the security situation of the
country these locations are even more peaceful and better to attract
The telecommunication market in Sri Lanka was monopolised by the
state before 1995. After the former President Chandrika Bandaranaike
Kuratunga's decision to privatize this sector we were able to improve
same at a good rate though we could not bring the desired results
through privatisation from most of the other sectors. Presently several
foreign investors are planning to invest in this sector. According to
the Central Bank statistics, every 18 persons had phones against 1000
(ratio 1000:18) in year 1996 whereas it has increased up to 165 in 2004.
World-renowned companies such as Bell, Suntel tied-up with several
retailers in the country are selling wireless phones throughout the
country. Mobile phone connection density will beat the fixed and
wireless phone density in the near future.
Today phones are an essential and reachable item relative to the past
for most of the people in the country. However, apparently the
affordability of the telecom facility in SL is low compared to other
Asian countries. In other words though the tele-density is increased to
a great extent but most of the people cannot use this facility other
than for urgent circumstances because of the high charges. This
situation will not favour the development of the IT sector.
The SLT's (Sri Lanka Telecom) role in this sector cannot be
considered as small and they are the leaders in the market since they
maintain 77% of the market share for fixed-lines. Their domestic core
network consists of optical fibre rings capable of handling gigantic
volumes of data and SLT's international connectivity is well positioned
to transfer data at the speeds of terabyte per second, which would
facilitate any business.
After commissioning of Bharat Lanka optical fibre submarine cable
between India and Sri Lanka, customers of both countries would benefit
by competitive International Private Leased Circuits (IPLCs), Broadband
Internet, direct and backbone networks, transit International Direct
Dialing (IDD) traffic, Internet Protocol (IP) and multimedia content
services etc. This cable could create substantial bandwidth and both
companies can inter-connect their IP based multi protocol label
switching (IP-MPLS) network to facilitate Global Virtual Private Network
(VPN) services of the valuable customers. Existence of infrastructure of
this nature in Sri Lanka is vital for IT business.