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Sri Lanka: Promising New Entrant to The Study

Ruchi Gunewardene
25 February 2021

Sri Lanka is a new entrant to the Global Soft Power Index, coming in at 70th place out of 105 nations in the study. It is the highest-ranking new entrant from Asia, at 12th position on the continent.

Ruchi Gunewardene, Managing Director, Brand Finance Lanka
Ruchi Gunewardene, Managing Director, Brand Finance Lanka

The nation performs exceptionally well on Culture & Heritage, ranking 7th in Asia – ahead of Indonesia, Vietnam, Malaysia, and 8th on how effectively it managed COVID-19. Sri Lanka ranked in the middle of the pack for other attributes such as Business & Trade and Governance compared to its counterpart Asian countries.

The Index reflects Sri Lanka's core strengths: its friendly people, rich heritage and strong culture aligning with what it is best known for – a tourist destination. These are the very reasons it is consistently ranked high in travel magazines and websites, being among the most sought-after destinations to visit in the world.

One of the many unfathomable mysteries of Sri Lanka is how it can squeeze so much diversity into a small island.

From the palm-fringed beaches that circle the tiny island to the picturesque highlands covered with tea plantations, home to the world-famous "Ceylon Tea". The country boasts over 2,500-year-old historical kingdoms blended with Portuguese, Dutch, and British influence, all of which sit alongside the stylish, modern, contemporary architecture of boutique hotels dotted across the nation.

Sri Lanka has as many as seven world heritage sites, with diverse crops and a wide range of spices, flora, and fauna that host the most extensive land and sea mammals – which can be found within less than a hundred kilometers from each other. All of this makes a rich tapestry and treasure island to explore for foreign travellers.

Situated in the middle of the Indian Ocean, between Africa and the Far East, Sri Lanka has long been a trading sea route from ancient times. While its Soft Power on Business & Trade is relatively low, it records a positive score on the future outlook metric. In this regard, there is a big thrust on developing the ports across the country, and a massive modern infrastructure is emerging – called the Colombo Port City – on over 500 acres of land reclaimed from the sea.

The Soft Power of this strategically located tropical island in the middle of the Indian Ocean lies on the two key pillars of tourism and trade, which are pivotal for the country's future.

Interview with Channa Manoharan

Channa Manoharan, Chairman, Sri Lanka Association for Software and Services Companies (SLASSCOM)
Channa Manoharan, Chairman, Sri Lanka Association for Software and Services Companies (SLASSCOM)

Sri Lanka is known primarily as a tourist destination. How do you expect the innovation and knowledge services industry to get attention in the context of these perceptions?

For the past two decades, the innovation and knowledge services sector has built an enviable track record of attracting MNCs and large IT companies to set up their digital innovation labs and captive delivery centres in Sri Lanka.

Sri Lankan IT product companies have delivered world-class products and platforms to some of the global brands, while companies who provide software and knowledge services have focussed on high value niche areas. We are now at a tipping point where we are actively ready to market our capabilities to the world.

Everyone knows that India is the largest offshore outsourcing market. Being a neighbour, we believe that we can attract more specialised work requiring relatively smaller teams to be delivered from Sri Lanka. The pandemic and weather-related work disruptions – such as the floods in Chennai – are also reasons for MNCs and Indian majors to set up in Sri Lanka for business continuity purposes. We are also strategically positioned as a gateway to the fast-growing South Asian markets, having friendly relations with India, Pakistan and Bangladesh.

Sri Lanka is a desirable place to visit and live, with its cosmopolitan lifestyle, modern infrastructure, diverse culture – influenced by Dutch, Portuguese, and British presence – its clean environment, sandy beaches, lush greenery and biodiversity, as well as its warm and friendly people. Global customers can establish business relationships while combining leisure and travel – at some point in the future…. while sipping our tea!

What are the challenges in establishing Sri Lanka as a viable centre to export its knowledge?

We have all the right ingredients in place. Our primary challenge has been country visibility for innovation and knowledge services. While our industry has created a niche position for its innovation and knowledge services, no significant investments were made to market it to the world. Global analysts such as AT Kearney and customers worldwide call us 'a hidden gem'.

We have an outstanding reputation and track record of delivery with our current base, and we have some major global operators doing business in Sri Lanka. These include well-reputed companies such as the London Stock Exchange – which uses Sri Lanka as its innovation centre and service delivery for its global operations – and HSBC which has a captive delivery centre in Colombo. Pearson, IFS, Sysco Labs, Wiley Publishing, Axiata Digital Labs and Acuity Knowledge Partners are others who have established their captive innovation and delivery centres here. We have recently launched the industry brand 'Island of Ingenuity' which espouses our value propositions. We plan to build awareness for our industry in identified priority markets in the next five years with government support.

What is your future outlook?

The industry has a shared vision with the government to build the industry to USD 5 billion in export, create 200,000 high-value employment, and launch and support 1000 startups. This will include FDIs, venture capital, foreign exchange earnings through exports, resulting in significant socio-economic growth impact.

We have recently launched accelerators in Products & Platforms, Artificial Intelligence (AI), Cyber Security, and Intelligent Process Automation with the aim of positioning Sri Lanka as a Center of Excellence in these areas. We work closely with universities and academia to create a future-ready workforce in emerging technologies.

The innovation and knowledge services industry in Sri Lanka has embraced diversity, regional inclusion, environmental sustainability, and social responsibility. It has demonstrated resilience and adaptability in challenging situations and has emerged stronger. We are confident in achieving our goals with the government's vital support in promoting the industry and enabling conducive policies.

About the Author

Ruchi Gunewardene
Sri Lanka

Ruchi graduated from the University of Bath in the UK with a degree in Biology. Until June 2002, Ruchi had spent his entire career working in marketing and branding at Reckitt Benckiser, JWT, GlaxoSmithKline and as the CEO of The Coca-Cola Company in Sri Lanka.

During his 10 years with Coca-Cola he was also responsible for regional marketing in Nepal, Bangladesh and the Maldives.