$ 4,000 and beyond; we need to ramp up our skills base

Overall, the country’s macroeconomic fundamentals have strengthened over time. The country has set itself a target of doubling the per capita income to US$ 4,000 by 2016.

One area that Sri Lanka can make some headway in the short term to achieve this goal is by promoting Sri Lanka as a favourable destination for business services outsourcing. The global out sourcing market is currently worth over US$ 400 billion, with India exporting some US$ 50 plus billion worth and China $ 30 billion, while Sri Lanka’s share was just over US$ 60+ million.

Many MNCs operating in the West despite high unemployment levels in their countries are still looking to reduce their cost of operations by spreading operations globally and cherry-picking countries for their particular skills set.

Knowledge process outsourcing

The future of outsourcing and knowledge process outsourcing, which is the top end of the BPO value chain, could be an area Sri Lanka should focus because we have a vast pool of well-trained and qualified accountants. While data and voice is around $ 5-$ 15 per seat per hour, Low end KPO work like analytics is around $ 15-$ 35 per seat per hour.

While it is likely that new countries will take away some work from India, it is very unlikely that any country can become an equal alternative to India for a while, cost apart, no country has the kind of IT skills that India has and neither do they have the manpower supply and scale that comes anywhere close to India. So this is an area the industry and the Government should address immediately by investing heavily in the training of the work force to acquire these skills.

Then, the outsourcing companies that are successful in attracting and retaining staff should focus on creating a global brand that reflects their corporate culture and values, thus allowing more selective hiring and better clients.

Opportunity

The economic opportunity for us to reform our education and training with a bias for technological, scientific, and industrial skills is now. Like the Middle East, we cannot rely on rich natural resource endowments to generate foreign exchange; therefore as a country, having a pool of well-trained people with technological and analytical skills would help us to attract MNCs looking to set up locations in Asia.

Therefore, we need to focus our education and training system primarily to deliver the skills to leverage FDI. Slowing levels of FDI growth together with increased competition, especially from China and India for that FDI, has put pressure on small countries like Sri Lanka to move up the ladder of skills sophistication, very fast. However, without a strong general education and training system, it is virtually impossible to leverage MNCs for skills formation beyond the immediate needs of the firm.

Standard level of skills

We need to have a standard level of skills in the workforce on which to build a system in which to incorporate the participation of the private actor. Whether primarily public or private, there must be some overarching coordination and management knitting together to generate new energy within the education and training system to deliver the intellectual content.

Now that the internet is lowering barriers to deliver knowledge online and free, we need to exploit this channel to rev up our skills base. However, the structure of general education and training system would influence levels of private sector participation and public-private cooperation. Its focus therefore will determine, to a large extent, the type and orientation of the skills and knowledge that will be most prevalent in the local labour force.

 

 

 (The writer is a senior company director.)