During the years 2009-2015 we witnessed an outstanding time period as the Sri Lankan economy experienced a period of rapid socio economic growth following the end of a three-decade long civil war. Sri Lanka was headed towards brighter future in terms of economic growth and development.
After facing a three-decade long war against terrorism, Our country’s economy surged ahead from 2009 onwards with many local and international investments to reach its highest economic potential. The government of Sri Lanka invested heavily in infrastructure development to aid the growth of the economy and foreign direct investments. At a continuous economic growth rate above 5%, Sri Lanka was being considered as one of South Asia’s best performing economies. Some international media compared Sri Lanka’s economic growth rates with highly developed countries like Singapore and Hong Kong.
This dramatic growth of the Sri Lankan economy paved the path for many talented locals to enter into various businesses as entrepreneurs. As entrepreneurship is a key to the economic progress of a nation. Sri Lanka is no exception, and according to the Industry and Commerce Ministry, SMEs account for more than 75 percent of total enterprise, and are ‘the backbone of the economy.’ Statistics from the Ministry’s most recently published annual report indicate that SMEs provide almost half of the country’s employment, totalling 52 percent of the GDP.
However, the change in the government following the 2015 Presidential election has led to a slowdown in the economic growth and development rate as there has been a significant change in policy. The miracle of Asia is slowly becoming Asia’s left behind economy.
In recent years, there is evidence globally that a strong reinforcement in the study of entrepreneurship amongst government policy makers, and business leaders as many developed nations achieved more positive economic progress though entrepreneur business. You can’t deny the relationship between entrepreneurship and economic growth that has been discovered as early as the 18th century.
ENTREPRENEURSHIP EDUCATION IN SRI LANKA
Education is one way the government can commit to creating a favourable ecosystem for entrepreneurship and development. Education in Sri Lanka is knowledge-based, rather than execution-based. Parents in Sri Lanka have a very strong preference towards professional jobs, all these facts lead the country’s younger generations to deeply think about entrepreneurship. As we all well aware, only 16 percent of the population able to attend universities in Sri Lanka. This fragment is the country’s most valuable asset, but with the country’s education system, most of them will not be able to reach its full potential.
However, we have to understand that each person has their own unique set of skills and talents that they should be encouraged to utilise. There is a need for a range of successful educational programs, like the entrepreneurship programme in Singapore, which offers many practical execution-based education programs to aspiring entrepreneurs.
Sri Lanka needs to introduce more & more technology based educational programs. Presently, there are gaps in terms of technology and IT based skills and basic financial expertise among ordinary Sri Lankans. Schools, colleges, institutes of higher education in Sri Lanka also have a role to play with providing more progressive application based education, extra-curricular activities to promote innovative thinking and risk taking. Nevertheless, parents are the most influential factor and thus they should be encouraged to teach their children to think independently and to encourage the exploration of new ideas and unfamiliar circumstances.
Most of the people who care about Sri Lanka’s education system frequently claimed that even at the university level, “technological knowledge is not shared or given.” If we continually ignore these basic principles and essential changes within the system, our future generation will not be able to satisfy job market demands which most of the modern day companies expect from their employees. Thus, ordinary Sri Lankans may not be able to take advantages from foreign projects in Sri Lanka such as the Port City as they will not have the necessary criteria to secure jobs.
STABLE POLITICAL ENVIRONMENT
The government of Sri Lanka is absolutely responsible for creating new jobs to fulfil the annual job demand in the country. This entails maintaining a stable political environment for foreign investment as well. The World Bank, which remains cautiously optimistic about Sri Lanka’s economy, says that “political uncertainty” is the key risk to create a solid platform for new entrepreneurs to start their business. At the moment we don’t see political stability in the country, which is essential to build an entrepreneur friendly eco system. Declining growth rates, unemployment, political instability and environmental challenges of this country has a negative impact for our economic eco system.
FUTURE OF SRI LANAK’S ENTREPRENEURSHIP
According to the ministry of Industry and Commerce, 75% of all enterprises fall in the SME category, contributing to 52% of the country’s GDP and 45% of the employment. Although this sounds promising, Sri Lanka’s volume of business activity is simply not enough to generate the desired economic growth.
Department of Labour statistics indicates that 2.8% or roughly, 230,000 of the Sri Lankan working population are employers or business owners in Sri Lanka. According to the Global Entrepreneurship Monitor (GEM), a consortium of universities conducting an annual survey of the most entrepreneurial countries in the world. According to their study, in Thailand, 27.5% of adult population (aged between 18-64) are owner-managers of established businesses, making it the second most entrepreneurial country in the world. This means close to 13 million people in Thailand are involved in some form of business activity, explaining the outstanding growth of the South Asian nation.
This should not come as a surprise to anyone who has visited or followed the economic progress of Thailand in the last decade. Thai citizens are very industrious and entrepreneurial in nature as they engage in various types of business catering to both domestic and international markets.
Further, in Vietnam there is a business ownership rate of 19.6%, Brazil 16.9%, Indonesia 15.3%, Bangladesh 11.6%, and China 7.5%. Considering the population of these countries, the level of entrepreneurial activity in these economies are staggering. Countries with population similar to Sri Lanka such as Chile, Taiwan, Romania, and Cameroon also have business ownership rates around 10%.
There is no doubt that Sri Lanka needs more entrepreneurial development to fuel our country’s dying economic growth rate & we must understand that there are no short-term silver bullet solutions to this. Sri Lanka must understand barriers that they continually face to build entrepreneurial development. If the above mentioned solutions are applied and business friendly policies are implemented, we maybe lucky enough to witness Sri Lanka ushering a new era of economic development and prosperity.