SL lacks dedicated software industry policy : UNCTAD report
A 2012 global information economy report, which has been much reported in the local media for highlighting Sri Lanka for the first time, has also stated that the country lacks a dedicated software industry policy. This is even though it also noted that te country had a strong ICT commitment as embodied by the "eSriLanka" government initiative.
Issued in January 2013, the "Information Economy Report - 2012", published by the United Nations Conference on Trade and Development ( UNCTAD), also commented that "Sri Lanka is among the developing countries with the lowest level of software spending in relation to both GDP and overall spending on ICTs".
Further, the report also quoted a prediction by local IT-BPO body Sri Lanka Association for Software and Service Companies (SLASSCOM) which stated that the "industry will generate US$ 700 million in revenues by 2015". Previous statements by SLASSCOM had said that the IT sector would reach $1 billion in revenue by 2016. This document also put forward data published in 2010 by Sri Lanka's Export Development Board which stated that there were "147 companies in the sector, 90 per cent of which had begun their operations in the past decade and more than half of them had less than 50 employees. The 18 per cent of the companies that had more than 100 employees contributed 76 per cent of the export revenues in 2010. More than 80 per cent of all IT exports are related to software products and services".
Also revealed; "Although software services represent the most common activity among these firms, a relatively high proportion of them also produce software products. On average, a company offers at least two service lines, and 80 per cent offer software products and services. Of the 147 companies, 60 per cent were Sri Lankan owned, 29 per cent foreign owned and 11 per cent were joint ventures. Most (81 per cent) of the total revenue was generated by foreign affiliates and joint ventures. Software SMEs are mostly locally owned, while most of the large companies are joint ventures or foreign owned".
Interestingly, the report also opined that the "emphasis by industry leaders, policy makers and the mass media in Sri Lanka is still on promoting software and IT services as an export industry".
The UNCTAD publication also noted about Sri Lanka that its "domestic market for software and IT services is small, estimated to be worth only US$ 48 million in 2011. The demand for software is partly curbed by relatively low levels of ICT use, with household PC penetration at 12.5 per cent in 2009/10 (Sri Lanka Department of Census and Statistics, 2011). Moreover, in 2011, there were only about two fixed-broadband subscriptions per 100 inhabitants and about 15 users per 100 inhabitants".
However, it also signalled that "mobile broadband is experiencing rapid growth, with five licensed mobile operators competing in the market. Innovative models, such as prepaid mobile broadband, have enabled wide uptake of wireless broadband. Some 70 per cent of the population has a mobile phone and almost half use their handset to access the Inter- net".
The report also pointed out that the youth was a big driver in the uptake of new technologies, stating: "Increased ICT use among the youth is also creating potential demand for software applications in Sri Lanka. In 2012, there were about 1.3 million Facebook accounts in Sri Lanka. Although global websites (such as Facebook, Google, YouTube and Wikipedia) have the greatest number of visits, according to the Alexa.com, several local sites, including GossipLankaNews.com and Elakiri.com, are among the top 20 most popular ones, nurturing demand for domestic software solutions".
Continuing in this vein, it also went on to comment; "Rising computer penetration, mobile broadband and Internet penetration, especially among the youth, are stimulating a new community of Internet users and thereby new demand for software. For example, the crowdsourcing platform, oDesk, reports about 300,000 hours of contributions by Sri Lankan software programmers".
(JH)