ict and the economy prospects for sri lanka

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  • 7/28/2019 ICT and the Economy Prospects for Sri Lanka

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    ICT And The Economy: Prospects For Sri

    Lanka

    By S. Sivathasan -June 11, 2013 |

    Global Perspective

    When the growth of the global economy and of individual state economies over the

    last 110 years is examined, it is clear that the sectoral composition has changed

    drastically. Agriculture which was the dominant sector for centuries has ceased to be

    the principal component of GDP as of now. It employs a lesser workforce compared

    to Services. Yet it assures the world of sustained food availability. The same holds

    for Industry, which though increasing in importance as a producer of goods, is no

    longer the only pivot of the economy. In recent decades Services have become thepredominant sector in global terms.

    Services

    In course of time, Services have embraced a large spectrum. The compass has a range from education, health,

    banking, housing, trade, transport, shipping, aviation, tourism, ICT and many more. Globally they account for 64

    percent of GDP as estimated in 2012, while agriculture accounts for 5.9%. A visible phenomenon in recent decades

    is that agriculture and industry support and sustain services and new wealth created by the latter reinforces and

    develops the former. In a sense it is true to say that more land and funding are needed in the services sector for

    healthy growth of agriculture.

    Information and Communication Technology

    A relatively recent development but with exponential growth in a brief span is ICT. Worldwide IT spending in 2013 is

    estimated to reach $ 3.7 trillion. Within its compass are: communications, computer services, computer software

    and computer hardware. Investment and earnings wise beginnings were modest for some of the leaders. A quarter

    century or less is common to many. A common thread running through success has been emphasis on education,

    particularly on science and math though other courses are not a bar for selection. Investment in education has

    come principally from the state through proactive policy and programme. Ireland and India and significantly Tamil

    Nadu are examples and there are very many more worldwide. Management of the industry however has been

    mainly a private sector preserve, supported by state initiatives in funding and through proactive fiscal policies.

    Ireland

    With an export performance of $37.2 billion in Computer and Information Services, Ireland ranked first in the worldin 2010. It was remarkable for a country about the size of SL having a population of less than a fourth. What

    explains? The intellectuality of the leading lights who got their perceptions and formulations accepted by those in

    governance. Two great changes taking place in Europe and US were capitalized on. First was the opportunity

    thrown open by the EU economy and the second was the prospect of investment offers from the US. With such a

    tie up, Ireland was able to leapfrog over industrialization. Ireland correctly identified IT as the best field for

    development. Education was chosen as the merited area of attention and resources were devoted more than

    adequately. In education, science claimed precedence and such training equipped the young for IT. The year of

    Irelands economic takeoff was 1987. It was somewhat coterminous with growth in IT development, exports and

    S.Sivathasan

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    high end employment.

    Smart Education = Smart Economy, is the current credo of Ireland for ICT in Classroom Initiative. The watchword

    is RID Research, Innovation and Development. The Innovative Task Force has estimated that High Tech and RID

    employment in Ireland will reach 177,000 by 2020. It is forecast that per capita income in 2050 at constant 2000 us

    $ is 61,363 for Ireland and 49,412 for UK.

    IsraelIsrael is another small nation that has astounded the world of Information Technology with her performance. The

    Jews reputed for their intellectual ascendancy capture every opportunity that comes their way to optimal advantage.

    It was so with reparations they received, funds that flowed from US and expertise from the intellectuals and

    intelligentsia of their own compatriots domiciled abroad. With all such assistance, pitching for the field promising

    much leverage was an easy choice. Success in ICT confirmed their correctness.

    Securing the 7th place with an export performance of $ 7.7 billion in 2010, won her plaudits. Speedy development is

    spread over the last twenty years. Success is attributed to high caliber of scientists. Israel has 135 engineers per

    10,000 citizens against 85 in US. When will Sri Lanka approximate such a level of production with a replication of

    Faculties or Engineering Colleges?

    Sri Lanka

    ICT Service exports in 2010 were $310 million. This denotes a 47% increase compared to two years previously.

    The UNCTAD Report for 2012 has this to say. Soft Ware (SW) production in Sri Lanka has witnessed rapid growth

    during the past decade. Has one of the most export oriented industries in the world. It also points out that SL is

    among the developing countries with the lowest level of SW spending, related to GDP and overall spending on

    ICT. Among the advantages SL has as with India, is some proficiency in English. But the numbers are limited.

    China

    When growth statistics of China are perused, it may be seen that whatever curve that China touches never dips. It

    only grows exponentially. This is true of ICT as well. In respect of Software, production to the value of $ 8.883 billion

    in 2001 multiplied 32 times in 10 years to $285.9 billion in 2011. Exports surged 42 times from $ 726 million to $

    30.400 billion. Hardware production was $ 820 billion in 2010 and transaction value of e-commerce in 2011 was $

    926 billion. UNCTAD reports an export volume of $ 9.2 billion in 2010.

    What is conspicuous in China is the comprehensive manner in which the challenges are responded to. Hardware

    manufacture to produce software and both serving the domestic and foreign markets has been the feature. In

    addition are e-commerce and e-governance. To serve all the needs 7.7 million trained people are engaged. The

    spread of English to encompass IT personnel is relatively recent and perhaps the change explains the spurt in

    exports. Even for smaller nations this can be a model.

    India

    In computer and information services, NASSCOM the trade body of IT professionals with international

    representation, reports an estimated volume of $ 76 billion in exports in 2012/13. Estimate of domestic sales was $32 billion. India stands out as one among the top leaders. The industry provides high end employment to three

    million people while adding 180,000 net jobs in 2012.

    As is the case with many a leader in the field, education diligently directed to computers and IT succeeded in

    creating the academic leadership capable of winning the day in the echelons of governance. Of great significance

    was also the economic reform of PM Narasimha Rao and FM Manmohan Singh in 1991 and in the years following.

    It is to their credit that they twisted their own arms, though under economic compulsion and started dismantling

    the license-control regime without waiting for IMF behest. Their attribute of intellectuality prevailed over

    safeguarding long nourished vested interests or in yielding to populism or expediency. Successive governments

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    followed the lead and private sector took initiatives thereafter.

    [There is a wide disparity in the statistics of China & India, reported by the respective countries and those of

    UNCTAD. A variance in the definition of IT, ICT, Software production, Software services, Software exports etc. and

    their composition offer part of the explanation. The reporting years are also different.]

    Prospects for Sri Lanka

    If the first decade is considered productive for SL, the nineties may be treated as a period of gestation orhibernation or a run for takeoff. It need not imply that late entry makes for slow growth. With attention sharply

    focused, amends can be made for the defaults of the past.

    The first and most crucial area demanding state assistance is that of finance. UNCTAD in its report for 2012 points

    to Sri Lanka being among the lowest spenders on software in developing countries. It is good to be aware that the

    world will be spending $ 3.7 trillion on IT in 2013. The first charge on the peace dividend should have been for IT,

    realizing the leverage that costs have on benefits.

    The second area connected to the first is Education. But cavalier treatment manifests in paltry allocation resulting in

    utter neglect particularly at tertiary level. More institutions with affiliation and accreditation particularly for science

    and engineering can promote the ICT industry.

    Third is English instruction without which no headway is possible in ICT development. Present day literacy level is

    enough only to decipher name boards. A student well educated in English should engage in elegant speech and

    chaste writing which can come about with wide reading. How succinctly Sir Francis Bacon said Reading maketh a

    full man, writing an exact man and conference a ready man. This should be the template for language study

    foreign or indigenous. I have mentioned Sir Francis to avoid confusion. Fifty years back we had high levels. We can

    get it back in twenty years. Depriving the underprivileged of the benefit of English with the argument that primacy

    for English would marginalize the rural student is neither rational thinking nor logical reasoning.

    Fourth is pulverizing Colombo centric obsession. It is essential to take good education, IT, English and broadband

    to the districts and the countryside. All of them going together will deflate the costly metropolis and vitalize the other

    areas.

    Fifth will be satellite townships, industrial parks, private sector housing and other appurtenances. For an Industrial

    Park, Mahindra World City (MWC) outside Chennai, the first and the best of its kind in India is a model. MWC is

    1500 acres in extent and is in the 11th year of development with over 75 % completed. It is host among several

    others, to Infosys IT giant which at full development in an year or two will reach an employment figure of 15,000

    at a single location. The components mentioned above have to be part of the composite arrangement. The

    beginning of this dispersal over the last ten years in Tamil Nadu is displaying the benefits.

    Conclusion

    Full realization is necessary that premium value should be placed on education if the regeneration of the country is

    envisioned. As for the country so with ICT. Those in governance have to pick up men of intellect, competence and

    probity to manage it and to give it direction.