With a highly skilled workforce and a cost-competitive business environment, Sri Lanka is a favorable destination for IT and business process outsourcing (BPO) and knowledge services outsourcing (KPO) according to ATKearney (Competitive Bench-marking: Sri Lanka Knowledge Services).

A significant knowledge services industry has been developing in Sri Lanka for the last three decades. Today, there are over 300 IT and BPO companies have been operating in Colombo and over 60,000 people have been working in white-color jobs. This sector is estimated to generate more than $400 million for the country. Global firms such as HSBC, IFS, Google , Lenovo, Microsoft, Nokia, JPMorgan, London Stock Exchange, Santander Bank, Emirates can be specified as key players operating successfully.

High-value niche market

With a population of only 20 million, Sri Lanka has favored to focus on higher-value niche products across many industries. Similarly, Sri Lanka continues to lead the world in high-value niches, including fast fashion and ethical apparel in the clothing industry, solid tires and surgical gloves in the rubber industry, single-origin teas in the tea sector, and activated carbon in the coconut sector.

Continuous success

Those companies that have centers in Sri Lanka and elsewhere tend to do their more complex, specialized work in Sri Lanka while performing larger-scale transnational work in India and the Philippines according to ATKearney. These offerings for small and medium-size businesses are a key differentiator, which can get a level of attention and access to finest talent that they would never get in larger centers in other countries.

In particular, with its exceptional business environment and infrastructure, many companies are viewing Sri Lanka as a natural complement to their operations in India—allowing expansion in a less-overheated environment while diversifying country risk.

Concerns

ATKearney in his research explains, Sri Lanka’s infrastructure has provisions to improve compared to the other low cost countries in the neighborhood. International telecom bandwidth costs are high by regional standards so the government needs to take prompt steps to encourage development of increased office space and infrastructure to serve the needs of the knowledge services industry.

In the meantime, Sri Lanka’s highly structured regulatory and bureaucratic environment that can be beneficial in upholding investors’ rights and driving improved enforcement of intellectual property and also results in rigid practices in areas such as labor regulations. Existing investors claim still there is more room for improvement, if Sri Lanka is to make an image as a global knowledge services hub.

Talent pool

The research document adds that the total number of students enrolled in higher education in Sri Lanka are now exceeds 400,000, with almost 100,000 students graduating per year. Sri Lanka has 23 accredited universities and numerous private higher education institutes offering full degree programs. Most graduates have degrees in disciplines relevant to the knowledge services industry, including computer sciences, finance, commerce, law, medicine, architecture, and engineering. In addition, more than 25 private educational institutes offer diplomas in IT, and tertiary and vocational education institutes around the country offer preliminary IT training courses.

A number of private universities are scheduled to become accredited in 2012, helping to relieve space constraints at public. Foreign universities such as Curtin University of Technology in Australia, Monash University in Australia,the University of British Columbia in Canada, the University of Wales in the United Kingdom, and Uppsala University in Sweden are partnering with local institutions to offer degree programs, and some are investigating the possibility of setting up their own campuses in Sri Lanka.

Education quality

Sri Lanka has excellent reputation for its education quality compared to other developing countries. With free primary and secondary education in place since 1938 and an extensive university system, Sri Lanka’s education systems are finest. Sri Lanka’s literacy rate is currently 91 percent, while literacy levels in most countries in South Asia have been lower than 60 percent until quite recently.

Soft elements

The research report further outlines, nearly two million Sri Lankans speak English that is the main language used by the business community. The country produces close to 400,000 English-speaking, IT-literate individuals each year. Also, as a tourist destination Sri Lankans have learned a variety of languages and moreover, Sri Lankan workers’ friendliness, creativity, and adaptability to different cultures and environments result in easy integration into foreign operating units. Therefore, with its unique combination of linguistic skills and professional qualifications, Sri Lanka offers companies the opportunity to deliver high-end IT, finance, accounting, legal, and other services in multiple languages.