We need more entrepreneurs!

Less than 4 percent of Lankans own businesses - Econ. expert:

by Lalin Fernandopulle

Sri Lanka's woefully inadequate entrepreneurship is a barrier to economic growth, said a senior lecturer on business economics at the University of Colombo.

He said that entrepreneurship building in Sri Lanka is astonishingly low compared to many developing countries in the region which have accelerated economic growth over the years.

The lack of entrepreneurship is a major obstacle to expediting economic growth.

Prof. of Business Economics, Faculty of Management and Finance, University of Colombo, H.D Karunaratne said that of the population of 20 million and a workforce of around eight million, less than four percent own businesses which is a stark contrast to many countries across the world which have created a vibrant entrepreneurship culture.

He said that if Sri Lanka is to fast track development it has to increase the four percent entrepreneurs to around 40 percent as in advanced countries where 30-40 percent of the labour force have their own business.

Sri Lanka remains poor and lags behind many countries in various sectors is due to the lack of a dynamic entrepreneurship culture.

“Policy makers with the support of academics, experts in the private and public sectors should focus urgently on creating an entrepreneurship culture in the country taking root from primary to tertiary education level which at present is mainly geared to create only professionals.

Children from the primary level are being groomed to be professionals such as doctors, lawyers and engineers and not entrepreneurs,” Prof. Karunaratne said.

Academics said that free education, healthcare with nutritional programs from primary to tertiary education level have instilled the attitude of dependence among students who after having graduated demand jobs from the Government as if it is duty-bound to provide employment to them. Students need to get out from the dependence mentality which is a huge hindrance to entrepreneurship and focus on developing occupational skills that will pave the way for career enhancement and higher prospects in life.They said that education with the proper mind set to develop entrepreneurship through sound financial literacy is the way out of one-track professional education which stifles the pace of economic growth.

"A large number of people in Japan are capital market investors compared to Sri Lanka which is abysmally low,” Prof. Karunaratne said.

Financial literacy enables a person to make informed and effective decisions with his financial resources. Personal finance is focused in State-run programs in Australia, Canada, Japan, United States and the UK.

“Sri Lankans are risk averse. They prefer to invest in safe and low return conventional systems such as banks and financial institutions. Capital market investment is a high-risk high-return investment. The education system should include personal financing which helps students to prioritise and cut down unwanted expenses and save for a rainy day,” Prof. Karunaratne said.

He said it is unfortunate that even at university level the demand for entrepreneurship education is low as students are stuck to the attitude of becoming a professional. The number of job opportunities the private sector could provide is limited.

The number of businesses registered a day in Sri Lanka is alarmingly low which creates a job mismatch in the country. The number of businesses registered a day in China is high. To enter a profession in Japan one should have a degree. Non-degree holders cannot gain employment in the public sector.

On the contrary some people in Sri Lanka want to be professionals without academic qualifications,” Prof. Karunaratne said.

The University Don also said that the lack of resources, facilities and stereo type management systems to suit all occasions in universities cannot cater to the rising intake to universities. They said that countrywide entrepreneurship is vital to create job opportunities.Export orientation and entrepreneurship creation is crucial to develop the economy. Sri Lanka has a very insignificant number of multinational companies unlike Japan which has over 70 multinational companies bringing revenue to the country.

"We need to ask why have we failed to create a Honda in Sri Lanka. We need to develop export oriented professionalism through education and human resource development," he said.