Global tech companies are always open to relocation. Lately, these relocation plans have been benefitting South Asian countries with sound digital infrastructure. For years Singapore has been welcoming tech companies, recently followed by India, given its rapid development in the sector in the past decade.

However, Sri Lanka – unless it is a tech company originating in the country – has not seen many global giants entering the country. The Sunday Morning spoke to a few experts to determine why Sri Lanka is not attracting global companies to set up operations in the country and how

this matter should be addressed, while covering the country’s digital tech policy in the making.

SL needs to make itself attractive

Speaking to The Sunday Morning, Cyber Security Consultant Asela Waidyalankara stated that in order to attract high-quality tech investments, Sri Lanka had to make itself attractive.

“Right now, there is a line of work, coming from previous governments, to have technology parks, similar to free trade zone set-ups, where the companies can come and set up their operations. Countries like Malaysia, Cambodia, and Vietnam have tech parks; basically, our neighbourhood countries have tech parks. Something that is at least a bit similar to these tech

parks in other countries that Sri Lanka has is Orion City,” he added.

According to him, tech parks cover the logistic aspect to set up companies. There is also a policy aspect, which is how attractive a destination is for a global tech company.

He added that Sri Lanka still had many logistical challenges: “For example, if a tech company wants to come here, can the staff be given a long-term resident visa? In countries like Singapore, the staff of respective technology companies is provided a long-term visa, which is

extended for a period of time. Also, they can transact in these countries. They can transact in dollars or whatever funds they have. In Sri Lanka, I do not see that type of policy being discussed at the moment.”

Waidyalankara further stated that there were many steps a company had to go through to set up operations here, noting that it was therefore very difficult for global companies to come to Sri Lanka.

However, he noted that on the other hand, Sri Lanka was attractive because Sri Lankan talent was good, but unfortunately some of this talent was migrating now although the country had decent technology staff.

Policy matters and data protection

“At the policy level, we have a few things we need to cover. One, we already have a Personal Data Protection Act, but we are yet to set up a data protection office. There is an update to the Cybersecurity Bill that is being discussed at the moment. It has not been passed yet. It will envisage setting up a cyber security agency. Global companies will come when there is compliance in terms of data privacy and cyber security,” he explained.

According to him, businesses need to be secure in the knowledge that their data is protected by local legislation so that they will know that when there is a data breach or a similar incident, there will be adequate control, which would help the companies to face the issues.

Waidyalankara noted that companies in the European Union would not be comfortable coming to Sri Lanka unless there was proper data protection legislation.

“We do have the legislation, but now we need the authority to come into play. In the meantime, our resource pipeline needs to improve. We have about 30,000 undergraduates coming into the system every year and at this rate, if migration is factored in, the remaining numbers are going to be a challenge.”

Personal Data Protection Act

In March 2022, the Personal Data Protection Act was passed in Parliament with amendments. It was tabled by then Minister of Justice Ali Sabry.

The Personal Data Protection Act intended to provide for the regulation of the processing of personal data, to identify and strengthen the rights of data subjects in relation to the protection of personal data, to provide for the designation of the Data Protection Authority, and to provide

for matters connected therewith or incidental thereto.

“The policy blocks had to be cleared. If Sri Lanka is to move beyond the current crisis, ICT is the trust sector, and I firmly believe in that, because the economy that is coming in is mainly driven by information technology. Apart from tech, I do not see a lot of industries having a good run in

the short term. Tech will get us out of this crisis sooner, hence these policies need to be considered.

“Sri Lanka should also focus on the digital economy. We are at 4% now but it is not enough.

There is no point in having more road maps; sound policies and actions are required,”

Waidyalankara stated, when asked what the country’s national tech policy should entail.

Terrible track record, xenophobic attitude

Meanwhile, subject expert and LIRNEasia Chairman Prof. Rohan Samarajiva told The Sunday Morning that when Sri Lanka engaged in attracting tech companies to come and set up operations here, it was not only attracting the investments but also the key staff. Hence, he questioned the ability to do the latter given the ‘terrible’ track record in providing work permits.

“Why can’t Sri Lanka attract foreign expertise to up the game of its ICT sector?

We do not do that because we have a xenophobic attitude and we are scared of getting foreigners here – we think they are taking our jobs. Employee mobility too has to be changed,” Samarajiva stated.

He further noted that one might think that tech companies should be drawn to Sri Lanka as it was a low-cost country, but in fact it was a volatile country as we did not maintain our exchange rates properly.

Samarajiva referred to the ‘Sustainable Sri Lanka 2030 Vision and Strategic Path’ report’s innovation, industry, and technology sections, of which he was a part of the writing team.

It states that in this regard, removing restrictions on innovation-intensive firms located in Sri Lanka would be an obvious step and notes that these tasks are, for the most part, indistinguishable from the general reform of government.

“The full range of reforms may be difficult to complete quickly, but priority could be given to some high-payoff areas such as logistics. Another alternative is for the Government to

proactively support or provide the enabling conditions for the conduct of R&D by innovative firms. For example, the provision of land for innovation parks and incubators to be professionally managed by specialised firms may be undertaken through Public-Private Partnerships,” the report further notes.

It adds that the Government will contribute in the form of land in appropriate locations and the facilitation of clearances. The deliverables are easier to define in objective terms. The returns on public investment can be built into the contracts that the park/incubator manager enters into

with the users of the facilities.

It also suggests that fostering closer university-industry partnerships is another element of this strategy.

“One approach has to be given priority, but it need not be exclusive. For example, the

identification and removal of barriers to innovation can take place in parallel with the

establishment of Public-Private Partnerships to proactively improve the conditions for R&D and related activities. Government R&D organisations will necessarily continue. Actions to make

them more efficient and outward-oriented will be needed in any case.”

Ministry response

Ministry of Technology Senior Advisor Hiranya Samarasekara told The Sunday Morning that over the years, through ICTA and SL CERT, the Government of Sri Lanka had been able to put in place the laws and policies to provide a conducive environme“We have enacted the Electronic Transactions Act and then we have the Computer Crimes Act. Last year, we enacted the Personal Data Protection Act. We are one of the first few countries in the region to come up with that legislation. The Ministry is currently in the process of

establishing a Data Protection Authority,” he added.

Further, Samarasekara noted that the Data Protection Authority would be a high-powered authority which would manage all aspects of protecting data. He added that these legislations were foundational and important for tech companies to do their businesses. “We are also putting cyber security policies in place,” Samarasekara noted.nt for tech companies.