ETCA and Sri Lankan IT Industry| Why and Why Not ?

Government of Sri Lanka issued an official statement regarding the bilateral agreement between Sri Lanka and India, which was under the discussion for years. While they have withdrawn the original agreement (referred to as CEPA), they have come up with a new version of it as ETCA, which primarily talks about sharing labor in two fields, namely ship builders and IT professionals. Now, being a part of the SL IT industry, let me share my viewpoint on this. 

India certainly is the 'big brother' of Sri Lanka and there are many things we could learn from our strong neighbor. Sri Lankans could certainly take a tip or two from Indians on how they promote & practice 'Buy Indian, Make Indian' slogan. Without doubts, it would be in our best interest to grow & strengthen the relationship with India, who owns one of the leading economies of the planet with the second largest work force. Saying that, ETCA would not be the best way forward in achieving that.  

The Sri Lankan IT services industry is one of the fields that we can be really proud of due to the globally competitive skills, innovations and engineering practices we posses locally. The industry has continuously grown in the recent years with the arrival of the startup culture powered by graduates coming out of the best engineering and IT programmes. We have been performing exceptionally well in the outsourcing arena, securing #14 for the year 2016 in the global services location index released each year by ATKearney.  

 

Now if you have a look at this index, our big brother India and ex-close friend China lead with a considerable margin. Given the high quantity of man & resource power, this is highly expected. But how did  a country with only 20M total population ended up above our new crush USA. The reason is behind the high quality set of skills we have in our own backyard. The chart even shows that we have climbed up two spots during the last year.  To be equally successful & competitive in the global industry, we don't need to export the same amount of products/services with comparison to giant economies such as India or China.  We just to have to do well in our own scale.

It looks like as a country we are doing pretty well in the IT/BPO services sector. So,  why do we need such an agreement? What good can we achieve from this ? The answers to these questions haven't been discussed by any government official so far. Attracting global talent from outside world is possible, even now, through knowledge services of BOI. IT consultancy firms are already utilizing this. How can things magically improve to a higher level with this agreement? Can we expect the top quality talent in India to come & work here abandoning the opportunities in their home country ? Or would it just open doors to the lesser talent, who get filtered out by Indian companies?

Bilateral agreements make sense when both countries can contribute something unique to the plate. An agreement such as ETCA would make perfect sense if it was between Singapore and India or Singapore and Sri Lanka. Why ? One country lacks the human factor and the other country lacks the investment factor. This will result in a win/win situation. 

If SL government is seriously concerned about improving our IT sector, they have many better alternatives. Easy & risk-free ones too. How about working on getting the unrestricted access to all PayPal services, improving university facilities to admit a higher number of students to engineering and IT degree programmes or introducing better loan schemes for entrepreneurs?

However, Sri Lanka Association for Software and Services Companies(SLASSCOM) is still to release their stance on ETCA. 

Global Services Location Index

Global Services Location Inde