Interview: Mack Gill
How can Sri Lanka best compete globally as an emerging hub for knowledge services?
MACK GILL: There is clearly a unique place for Sri Lanka in terms of IT, and more specifically, engineering and building intellectual property. There is a numbers game in the software business, and then there is a knowledge game. In India it has historically been a numbers game, with a wide range of services offered at a low price point. This has worked well over the last 20 years, but has faced challenges as of late with clients looking for more value-add.
Sri Lanka is coming at it from a different perspective, as it is obviously smaller, but also has a strong legacy in engineering. There has been a disproportionate amount of talent seen coming out of Sri Lanka’s IT industry. This comes down to education, with a fairly effective national system.
Talented students in the north, south or east have a good chance of testing and getting into the engineering stream, particularly in the University of Moratuwa and the University of Colombo, which have sophisticated technical programmes. For a small place, the country is definitely punching above its weight in terms of engineering talent. When I think about where this industry is going, I think Sri Lanka has a major opportunity to pursue the high-value end of the spectrum, which of course brings a higher price point and higher margins. It is proven that you can both design and build a world-class product here.
What challenges do smaller IT companies face in trying to break into international markets?
GILL: It is tough to break into global markets on the product side. It is always easier to compete on price point from a services perspective, but again, this is not the model that will work for Sri Lanka. It can only be a part of the ecosystem, but not the main push. The challenge is how to understand and build a global product and how to get distribution going. This primarily comes down to entrepreneurship. The good news is that there is a burgeoning venture capital community here that is bringing in expertise.
There is also a strong Sri Lankan diaspora that has now begun to re-engage with the country following the end of the civil war. Link people that have the market experience and contacts, and add in the funding component, and you have a terrific mix there. We are beginning to see this happen.
Which sectors are most poised for an uptick in IT applications domestically?
GILL: Our systems integration business in Sri Lanka is a significant contributor to our global operations, and is growing in parallel to our software business. With this, we have a privileged view of what is actually going on in IT in the country. The market is very sophisticated, especially in banking and telecommunications. There is an appetite for automation and people are willing to invest in new technology. Consumers here actually benefit from some of the best service to price point combinations in the world. You can observe the same level of appetite in other parts of Asia, but for a small market such as Sri Lanka, many are surprised by the level of sophistication.
Is there a perception problem in marketing high-end products outside of Sri Lanka?
GILL: This can present a particular challenge for Sri Lankan companies, but it can also work in their favour. For example, MilleniumIT’s trading software can compete with products coming from traditional centres such as New York, California or Stockholm. However, because we are based in Sri Lanka there is a little bit of mystique, and this can help differentiate us from our competitors. This is a story that can be told by anyone trying to do something similar in Sri Lanka. If you can present the essential value proposition well, the perception issue can work to your advantage.
