The digital economy encompasses all economic activities that results from everyday online connections among people, businesses, devices, data, and processes. Its key components are ICT equipment and semiconductors production, Telecommunication and Internet access services, data processing, software and other information services online platforms, including e-commerce platforms and Platform-enabled services. For the first time, the joint contribution of these components to Sri Lanka economy has been studied in the paper.
Sri Lanka remains optimistic in the middle of its post-COVID-19 economic recovery, given its relatively developed digital landscape with more than 60% of the population owning mobile phones (about half of them advanced digital smart phones) and a significant number accessing Internet on regular basis. Digital Economy in Sri Lanka, estimated to be USD 3.47 billion or 4.37% of GDP, is gradually emerging. Sri Lanka’s ICT/BPM workforce is supposed to reach 300,000 from 125,000 in 2018, who would then be supporting a USD 3 billion industry, from current USD 1 billion.
Sri Lanka has identified ‘Building a Technology based society’ a key national initiative in its National Policy Framework (NPF) “Vistas of Prosperity and Splendour” adopted in December 2019, which constitutes of 10 key policies aimed at achieving the fourfold outcome of a productive citizenry, a contented family, a disciplined and just society and a prosperous nation. Information and Communication Technology Agency (ICTA) of Sri Lanka, the apex ICT institution of the Government, was assigned the task of implementing the policy guidelines. ICTA’s scope relies on three pillars: Digital Government, Digital Economy and Digital Society. The Digital Economy strategy is further sub-divided into five key themes: Technology Industry Development; Startup Ecosystem Development; Technology Diffusion; Capacity Building; and, Regional Cluster Development. Digital Laws and Policies have been identified as enablers.
The paper discusses what lessons Sri Lanka could learn from the most advanced Digital Economy in South, Peoples Republic of China. (PRC). China’s Digital Economy is the direct result of the recent favorable policies followed by the Chinese government. They include policies in building network infrastructure, acceleration deep integration of the Internet with the real economy, and enhancing information technology capabilities in all aspects. Digital transformation in China was also possible because of a comprehensive strategy that focused not only on the supply side but created the environment to expand digital infrastructure. Data was also recognized as a key resource for development of the Digital Economy which was followed by the implementation of data governance policies.
In size and administration the two nations are hardly comparable. Still, the paper finds there still exist many lessons to be learnt, in moving towards an advanced digital economy. Replication does not directly depend only on the demand. The other important factor is the country readiness. While some approaches could be followed immediately backing on the developments so far happened others have to wait. For example, Sri Lanka may not be immediately prepared for supplying AI products or Autonomous Electrical Vehicles to global market. On the other hand, for E-Commerce or Education Technology, or maybe even for Fintech there exist a mature market. It is essential that the successful international approaches are correctly identified and integrated in to the Digital Economy Strategy of Sri Lanka for achieving the stipulated targets.