As per available data, entrepreneurship accounts for only around 3.2% of Sri Lanka’s workforce, well below the 10% regional average needed to support national economic expansion. 

While the Government aims to bridge this gap through facilitating a business-friendly ecosystem, digital economy initiatives, and regional investment, traditional career expectations and limited university-industry collaboration remain barriers for innovation. 

In an interview with The Sunday Morning Business, National Enterprise Development Authority (NEDA) Chairman Lakshman Abeysekera discussed the upcoming initiatives meant to expand entrepreneurship growth in the country, as well as strategies to link universities with industry to a greater extent.

Following are excerpts:

Only about 3.2% of Sri Lanka’s workforce is engaged in entrepreneurship. From NEDA’s perspective, what are the biggest constraints that continue to limit this, and has there been measurable improvement in the past year?

The Ministry of Industry and Entrepreneurship Development has set a target to increase this figure to 10%, which aligns with the regional average. Some peer countries even reach 12%. 

I would say one of the primary barriers is our culture. There is still a traditional expectation from parents for their children to solely pass their exams and secure Government jobs. We believe that teachers, parents, and society require a slight change in this mindset to prioritise entrepreneurship more – for innovative entrepreneurship.

We need innovative entrepreneurs to create jobs and add value to the economy. With the ongoing digitisation programme in Sri Lanka and the development of Artificial Intelligence (AI), the Government will not require as many employees to provide services efficiently. Thus, there will be limitations in absorbing graduates to enter Government service. We must encourage entrepreneurship and help people develop the skills needed to join the private sector both locally and abroad.

Regarding targets, 2025 was a difficult year. We began our work, completed the necessary analytics, and launched several initiatives. However, with the cyclone hitting at the end of the year, we had to redirect our focus to support those affected. Despite these challenges, we completed several activities.

We expanded the Brain Into Business programme by working with the university system to identify undergraduates with entrepreneurial potential. We provided these undergraduates with a five-day familiarisation and development programme to help them build business plans. An independent committee then selected students to receive seed capital of within a range of Rs. 200,000–350,000. 

This year, we recognised a limited number of undergraduates and students from technical colleges. We intend to grow this programme in 2026 by connecting banks, industry, alumni, and other stakeholders.

What is the strategy for linking these students with the wider industry?

Since we have limited funds for seed capital and islandwide operations, our strategy is to connect each university with a bank and both a multinational and a local company, as well as other stakeholders. We want to focus on new ventures in fields like digital technology, AI and robotics, creative economy, precision agriculture, and exports while also involving university alumni. 

This approach links academia with industry to support Research and Development (R&D), the commercialisation of research, and entrepreneurship development. We are facilitating these connections and will start establishing the National Incubator Framework and facilitation programme this year.

With this, our goal is to have at least 20% of the student population engaging with industry through exposure programmes or direct interaction with industry leaders. In some cases, the industry will come to universities to carry out research. 

From that engagement of 20%, we expect 10% to emerge as entrepreneurs this year. By doing this, we can expand our Brain Into Business programme. Previously, we supported only 40–50 students annually, but we are now working towards recognising 2% of the total university population. This is a gradual process, but we are starting now.

Looking at 2026, what are the key opportunities for entrepreneurship that you identify?

We actually see several opportunities following the recent challenges. Following Cyclone Ditwah, investments, rebuilding funds, and activities are now being scheduled, and many projects are moving forward. 

A smart entrepreneur will see potential in sectors like construction, supplies, and tourism. Education reforms are also underway, which opens new doors. Innovative entrepreneurs will find opportunities in these areas. A few other emerging areas are the blue economy, which we have not fully utilised so far, and Northern Province investments such as in tourism.

Given the Northern Investment Summit, organised by The Management Club in the Northern Province and supported by our ministry and its institutions, we are working to attract investments to that region in sectors such as agriculture, fisheries, industry, education, digital services, and tourism. 

Similarly, we expect the private sector to lead efforts to develop other regions, such as the North Central, Eastern, and Southern Provinces, by organising their own investment summits.

In 2026, which specific NEDA programmes will receive increased funding or scale up, and what are the indicators being prioritised?

The National Productivity Secretariat has already identified 1,000 small and medium-scale industries islandwide to develop over a three-year period, preparing them specifically for the export market. This includes improving productivity, offering advisory services, and diversifying products and markets. 

We are partnering with the Sri Lanka Institute of Marketing (SLIM) for branding and helping these businesses access finance. The Government has also proposed subsidised finance schemes of up to Rs. 50 million at 5% annual interest for this purpose.

The second initiative is the Scale Up programme. We have more than 1,000 development officers who are receiving training from SLIM in marketing and brand analysis. We have also trained 50 officers to act as relationship officers. They will be assigned to specific enterprises to help them scale up and secure loans. The National Credit Guarantee Institution will allow these businesses to obtain loans of up to Rs. 25 million, with two-thirds of the amount guaranteed.

What is the current status of the B500 brand development programme? How many enterprises have been onboarded, and what are the revenue benchmarks that the programme has achieved?

We realised the need to bring branding concepts to the regional and village levels. We are now building our internal capacity to help regional businesses analyse their brands and add value. Effective branding alone can help these businesses enter new export markets. 

The B500 programme aims to develop 500 brands. We have already onboarded over 200 and expect to reach the 500 mark this year. This is a long-term project that requires us to work closely with these businesses for at least two to three years.

We also manage the Made In Sri Lanka logo, which is granted to products with at least 60% minimum local value addition. To qualify, businesses must have operated for at least three years, be registered, and maintain proper accounts and quality standards. We are encouraging consumers to buy these recognised products and are helping these businesses reach export markets. 

Last year, we held three Made In Sri Lanka Trade Fairs in tourist hubs like Ella, Arugam Bay, and Weligama to let foreign buyers test these products. Some participants are now exporting through third parties or receiving direct orders via social media. They are also joining supply chains for hotels, and providing food, handicrafts, and gift items.

Small and Medium-sized Enterprises (SMEs) account for a large share of employment but remain weak in branding and digital reach. How is NEDA supporting SMEs to monetise the creator and digital economy in 2026, and which specific sectors come on top?

We have just appointed a Professor from the University of Moratuwa to lead and initiate our efforts in the creative economy. Since over 30% of our university students graduate with Arts degrees, we want to help them use those skills, especially in the tourism industry and beyond. We are focusing on innovation in branding, packaging, and pricing. This is not limited to services but also products.

For example, a team is currently working on a range of natural cosmetic products. Another group believes it can market Sri Lanka as a wedding destination, which could generate $ 1 billion by supporting related industries like salons, catering, and fashion.

Moreover, the creative economy is closely linked to the digital economy because many of these entrepreneurs use digital means for many processes, such as AI for marketing and digital platforms for banking and transactions. Thus, we are connecting the digital economy and creative economy with related industries such as tourism and other service sectors and industries.

Could you elaborate on the specific or new targets for the Made In Sri Lanka Trade Fair and other key projects in 2026?

While we have been holding Made In Sri Lanka Trade Fairs in tourist areas, there is a proposal to establish permanent exhibition spaces. We are currently in discussions to set up these spaces in selected tourist destinations. This would give our entrepreneurs a constant venue to display their products and interact with foreign customers. Initial discussions for this are underway.

Another important initiative is that we are also developing a national incubator policy framework because there are many incubators currently run by universities and the private sector. We have studied models in India, Malaysia, and other countries to create this framework, and NEDA will serve as the accrediting body; there is a committee that has come up with a policy framework. Additionally, the Ministry of Science and Technology plans to expand university incubators. 

By linking industry and universities, these incubators can help students with intellectual property registration, product testing, and commercialisation. We will support them for one to two years in the incubator until they are established, then connect them with banks, supply chains, and markets. We expect to have this system fully running in 2026.

The Government has proposed merging institutions such as NEDA, the Industrial Development Board (IDB), and the Small Enterprises Development Division (SED). From an operational standpoint, how would this restructuring change NEDA’s mandate and what kind of efficiency gains are expected?

This merger is moving forward with technical assistance from the Asian Development Bank (ADB) and Cabinet approval. 

The new organisation is expected to be named the Industrial Transformation and Innovation Authority. The goal is to transform industries to the next level, providing the support systems needed to grow our economy from its current situation to triple that amount. 

This authority will serve as a platform for industry transformation, R&D commercialisation, branding, value addition, and finding new markets. It will be the lead organisation for innovation in Sri Lanka and support an export target of $ 36 billion by 2030. We expect the new authority to become operational by the end of the year.