Sri Lanka’s Good Growth Opportunity: Connecting Three Dots
By Randhula de Silva and Anushka Wijesinha, Good Life X
Sri Lanka is at a unique turning point. The economy has faced successive crises and the country’s SMEs and exporters have experienced challenging domestic and external conditions. Yet, there are factors that point to the possibilities for renewal and growth that, if latched on, can derive new competitiveness and opportunities for global expansion. This article, by the team at Good Life X, a Sri Lankan catalyst for purpose-driven start-ups and SMEs, argues that we have a perfect trifecta of potential for Sri Lankan businesses to capitalize on, by connecting three dots.
Connecting three dots - Capitalizing on a trifecta of potential
Sri Lankan businesses can capitalize on a trifecta of potential derived from connecting three disconnected dots. The first, is what Sri Lanka has. The bountiful natural resources that we have had at the very core of our surroundings for centuries. Traditional sectors built on these natural resources that have not evolved very much for decades. Our environment and indigenous knowledge and practices in agriculture, food, wellness and use of natural ingredients in all of it. What our lifestyles, cultures and experiences have to offer. The second, is what Sri Lanka is excited about. The emerging thriving tech entrepreneurship. Lots of talent, lots of excitement, lots of dynamism. There are many young people being encouraged, nurtured, sharpened and beginning to thrive in this sector, with a growing tech industry, around the world and specifically in emerging Asia. The third, is what the world is asking for - where consumer demand is trending. Global consumers across the world are showing more and more urgency to move towards a more conscious economy and conscious patterns of consumption. Existing trends were accelerated by the pandemic. People around the world are asking different questions, asking for transparency, and asking questions about where their food came from and who made their products. They care about what goes into their food and looking at how the people who are generating this food are treated. They want to know how these ingredients were sourced. It's not just what you put into your mouth from your plate anymore. There's a longer and a deeper meaning to everything that we consume today and people are increasingly more aware of what they pay for. Conscious consumers are increasingly demanding and choosing to go for very specific type of products and services coming out of conscious solutions, and more sustainable and regenerative value chains.
What Sri Lanka has - Leveraging our inherent way of life
We are uniquely positioned to take all of the great things that we have, look to the future. Asia is going to be home to the largest middle class in the world and these consumers are going to be able to spend on very unique and interesting products, but also products that are created through more conscious efforts, more circular and regenerative efforts. So what we hold in our hand with these elements, be it in food, in agriculture, in wellness or travel, is to really move away from looking at them from a commodity perspective but more holistically - as pathways to elevate the lives of people who are producing them and lives of people who will consume them. At Good Life X, we believe there is massive potential if we change the way we work with these sectors, these industries. We are working to move away from looking at it in a typical industrial manner - of being extractive and linear in our growth. We are working to move away from being ruthlessly focussed on scale rather than pursuing good growth, and really move into practices that are circular, regenerative and wholesome. We believe that that is the key to success in the new conscious economy. Good Life X is creating a testbed out of natural resource based products to truly shift the needle from being extractive to regenerative.
What Sri Lanka is excited about - A growing tech & startup scene
Over the last decade there’s been increasing excitement and focus on innovation and entrepreneurship in Sri Lanka - startup mindset and approaches, new enabling platforms, and a boom of entrepreneurial activities all around us. From 10 years ago, to now the startup culture has emerged and evolved and there's a lot more support for innovative ideas and entrepreneurs now. There's a lot of mentorship to grow, people to speak to, investors to approach and even room to fail. Facilities all around Sri Lanka popping up through donor funding, private investor investment, and corporate innovations that are actually nurturing the entrepreneurial mindset. Coming from the success of the IT-BPM industry’s impressive export growth and silicon valley inspirations, all of this excitement has been predominantly focused on technology. But from around 2019-20, there’s been a change. More and more people and businesses are looking at tech as the ‘means’ not just ‘an end’, looking at tech out of the tech silo itself (given Sri Lanka’s rapid rise in the IT sector) and as an enabler and solutions provider to other sectors and the wider economy. The growth of the tech and startup scene, coupled with a new desire to make it work for the rest of the economy, is the second dot to connect.
What the world is demanding - Conscious consumption and holistic value
The third dot is our external markets. There is a transition of the mindsets of buyers and consumers around the world - from an industrial mindset to a much more holistic approach to ‘value’. Whether it's in business, in consumption, or simply how we look at our life and purpose of our ways, a change is underway - driven by concerns about the climate, about our health, about humanity. And all of this has been heightened by the pandemic and its aftermath. While there had been conversations and attempts in this direction, for a long time among smaller, disparate groups, the pandemic seems to have really accelerated these and brought them more into the spotlight. It is evident now more than ever before how our actions have, and continue to, really hurt our planet and in turn hurt human well being. More people are becoming more aware of how we have destroyed natural ecosystems around us that, if we change course, could help us thrive for a really long time. People are increasingly looking at different ways to live and consume more consciously, and to really look at ‘economic value’ in a much more meaningful and purposeful way. And what is unique is that - unlike in the past when these were looked at from a donor aid project point of view - Good Life X approaches this from the business point of view; helping businesses grow. We believe that if we can help businesses grow in a good way, they will create value for all of their stakeholders including the planet.
Seizing the opportunity - Connecting the dots to drive ‘good growth’
Sri Lankan businesses have a unique opportunity to connect these three dots, and be part of a new wave of growth. The market demand is now strong - a lot of consumers are demanding more and more sustainable products and services; more and more consumers are turning towards a more conscious route. While our inherent way of life and traditional sectors provide a sound foundation, without innovation and latching onto new consumption patterns, businesses in these sectors will be left out in the cold. While the tech space has seen impressive growth and is certainly a springboard, the gap is in connecting it to the non-tech sectors that desperately need it. And while the global consumer is rapidly moving to new holistic approaches of consumption and valuing goods, businesses that miss recognizing this and tapping into it, will lose out on massive revenue opportunities.
The ball is in the court of the entrepreneurs - those in the traditional sectors as well as the pathbreakers in new sectors - to connect, disrupt, and really give what the world wants and do it together. The traditional sectors need to be reading the changes right, and the new innovators need to be able to understand the value in our roots, and together find a common language and start working together.
Randhula de Silva and Anushka Wijesinha are Good Growth Alchemists at Good Life X.