Why digital economy is key for Sri Lanka’s economic growth

 The digital economy in Sri Lanka has been steadily growing and significantly impacting various sectors of the country’s economy

The global digital economy is poised for significant growth and transformation in the coming years. With technology advancements and increasing connectivity, digital economy has become a vital driver of global economic activity. Looking ahead, several key trends and outlooks shape the future of the digital economy. 

Firstly, the adoption of emerging technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) will continue to accelerate. These technologies will revolutionise various sectors, including finance, healthcare, transportation, and manufacturing, driving efficiency and innovation.

Secondly, expanding e-commerce and digital platforms will create new business opportunities and reshape traditional industries. Online retail will continue to grow, fuelled by changing consumer preferences and increased digital literacy. Additionally, the gig economy and remote work will gain prominence, enabling individuals to work flexibly and access global job markets.

Thirdly, data will play a central role in the digital economy. The collection, analysis, and data monetisation will drive personalised services, targeted marketing, and enhanced decision-making. However, data privacy and cybersecurity concerns will require robust regulations and safeguards.

Digital inclusion will also be a critical focus. Efforts will be made to bridge the digital divide, ensuring equitable access to technology, connectivity, and digital skills. This will contribute to economic empowerment and social development on a global scale.

Lastly, collaborations and partnerships between governments, businesses, and international organisations will be vital in shaping the digital economy. Collaboration will drive policy frameworks, foster innovation ecosystems, and address global challenges such as digital taxation, intellectual property rights, and cross-border data flows.

 Impact on Sri Lanka 

The digital economy’s impact on Asia is transforming various aspects of society, economy, and technology. The region has experienced significant growth in digital infrastructure, internet penetration, and smartphone adoption, leading to the rise of digital platforms, e-commerce, and digital services. This has fuelled entrepreneurship, job creation, and economic growth. The digital economy in Sri Lanka has been steadily growing and significantly impacting various sectors of the country’s economy. The Sri Lanka Government has recognised the potential of the digital economy and has been implementing policies and initiatives to promote its development.

One key area of focus has been the expansion of digital infrastructure and connectivity. Efforts have been made to improve internet access and broadband connectivity across the country, enabling more people to participate in the digital economy. This has resulted in increased internet penetration and smartphone adoption. 

On the other hand, the e-commerce sector has experienced significant growth in Sri Lanka. Online shopping platforms have gained popularity, and more businesses are establishing digital presence. This has expanded market access for small and medium-sized enterprises (SMEs) and has facilitated cross-border trade.

Digital financial services have also witnessed significant progress. Mobile payment solutions and digital banking services have gained traction, making financial transactions more convenient and accessible for individuals and businesses. This has helped drive financial inclusion and expand access to formal financial services.

Furthermore, the Government has been promoting digital skills development and entrepreneurship. Initiatives have been launched to enhance digital literacy and provide training incoding, data analytics, and digital marketing. This has equipped the workforce with the skills needed to participate in the digital economy and has supported the growth of digital startups and innovation.

Tackling the challenges 

However, challenges remain in fully harnessing the potential of the digital economy in Sri Lanka. These include addressing regulatory frameworks, ensuring data privacy and cybersecurity, and bridging the digital divide, particularly in rural areas. Continued investment in digital infrastructure, education, and policy reforms will be crucial in furthering the growth and impact of the digital economy in Sri Lanka.

The future of the digital economy is expected to be dynamic and transformative, with several key trends shaping its trajectory.

Most importantly, artificial intelligence will enable automation and personalised services, while blockchain will revolutionise supply chains, financial transactions, and digital identities. AR will enhance immersive experiences, and the IoT will connect billions of devices, creating a networked ecosystem. 

Data will continue to be a valuable asset, driving innovation, and economic growth. Striking the right balance between data privacy and data utilisation will be crucial, and regulations may evolve to protect individuals’ rights while fostering innovation. Traditional industries will undergo digital transformation driven by automation, connectivity, and analytics. Businesses will embrace digital technologies to enhance efficiency, productivity, and customer experience.  

Efforts to bridge the digital divide and promote digital inclusion will gain importance. The Government needs to work to ensure equitable access to technology, connectivity, and digital skills. This includes initiatives to provide internet access to rural areas, promote digital literacy, and create opportunities for underrepresented groups in the digital economy.

In conclusion

As the digital economy expands, cybersecurity will be a critical concern. Protecting sensitive data, securing digital infrastructure, and combating cyber threats will be paramount. Strengthening cybersecurity measures and building trust in digital systems will be essential for the sustainable growth of the digital economy. Also, collaboration between the Government and different stakeholders will be vital to address challenges and seize opportunities in the digital economy.  

In summary, the future of the digital economy holds tremendous potential for innovation, efficiency, and economic growth. Embracing these trends and navigating the associated challenges will be crucial for Sri Lanka to thrive in the digital age.

(The writer is the Chairman of Federation of Information Technology Industry Sri Lanka (FITIS).)