Ready for Japanese ICT!

Asia’s hi-tech powerhouse officially calls Lankan IT for the first time 

• ‘Welcome to first Japan Lanka B2B in IT!’–JETRO’sSakishige
• ‘Thanks! Our industry ready’-Rishad
• ‘I shall!’-New JETRO Rep Obama
• Lanka-Japan trade rise by 16% to $894 Mn

Sri Lanka’s IT & hi-tech sector has been suddenly energised as it received the first ever top level official invitation from Asia’s hi-tech power, as revealed on 04 September in Colombo. “After our own research on many Lankan business sectors, we identified Lankan ICT/BPO sector, among others, as fit to give our development support to.  As a stat, we invite a Lankan ICT/BPO delegation to Japan in the first quarter of next year” informed a smiling Masahide Sakishige (Outgoing Resident Representative-JETRO Colombo) on 04 September in Colombo.

Outgoing Representative Sakishige was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on 04 September at the Ministry, Colombo 3. The 04 September meet was both a (simultaneous) farewell call as well as a courtesy call by both outgoing and incoming Chiefs of Japan External Trade Organization (JETRO) in Colombo. On the same occasion, Minister Bathiudeen also extended his warm welcome to Kazuhiko Obama (New Resident Representative, JETRO Colombo).

“After our own research on many Lankan business sectors, we identified Lankan ICT/BPO sector, among others, as fit to give our development support to.  As a stat, we invite a Lankan ICT/BPO delegation to Japan in the first quarter of next year” said the Outgoing Representative Sakishige, and added: “We like to arrange one-to-one ICT/BPO business matching between Sri Lankan and Japanese ICT/BPO firms in the first quarter of next year-perhaps February or March- in Japan. JETRO can arrange B2B meetings for Lankan IT firms in Tokyo. This will be one-to-one B2B between Lankan and Japanese IT firms. Recently I received several requests from Sri Lankan IT sector-they want to expand in Japanese market. At the same time our JETRO office in Japan also received inquiries from some Japanese companies about Sri Lankan ICT/BPO firms. They believe that there is huge business potential in Sri Lankan ICT/BPO and can conduct good business with the Lankan sector. Depending on their evaluation of Lankan IT firms, our interested firms would decide whether to place software orders or to partner as investors.”

This is the first time that Japan has invited a Sri Lankan IT/BPO delegation to Tokyo and facilitated within Japan by JETRO, (Japan External Trade Organization), the powerful government-related body promoting trade and investment between Japan and the rest of the world with 73 offices in 55 countries. The Japanese “outsourcing industry” is tilted towards enterprise levels, packing demand for cloud computing. It is projected to hit $23B mark by 2017. As for “electronics and IT (E&IT) industry”, the Japanese companies claim no less than 15% of global E&IT output with an annual (Japanese) production increase of 3%. The 2014 estimate for global production by Japanese electronics and IT companies stands at $362 Bn. Of this, only 14% ($50Bn) is “IT/software solutions” while the rest (86%) consists of hardware manufacturing such as computers, semiconductors, communication equipment, and display terminals. The $50Bn “IT/software solutions” share signifies that there is promising scope for new players in the sector to increase this rate.

“I thank you for your valuable and committed services to promote trade between Japan and Sri Lanka during your stay here” voiced Minister Bathiudeen, responding to the Outgoing Representative Sakishige, and added: “Total trade with Japan in 2013 stood at $894 Mn and we have seen steady increase in this regard. Japan is a highly promising market for our IT/BPO sector and on behalf of our industry, I thank you for this facilitation. We are ready to send a strong industry delegation in the first quarter of 2014 and I have no doubts that JETRO Tokyo will do its best towards a successful first ever officially facilitated B2B session in Japan. Support from both governments is essential for this pioneering business cooperation effort to be fruitful. Thanks to the vision of HE the President Mahinda Rajapaksa, our IT/BPO sector recorded $719 Mn exports last year. Japan is a promising market for o. Japan is a promising market for our IT/BPO exports. I also extend a warm welcome to the New Resident Representative of JETRO Colombo Mr Kazuhiko Obama.”

“I have no doubts that New Resident Representative Mr Obama will continue the good work of JETRO in Sri Lanka” responded Outgoing Representative Sakishige, to which Mr Obama responded. “Mr Minister Bathiudeen, I shall.”

According to the Department of Commerce, total trade with Japan in 2013 stood at $894 Mn, increasing from $770.11 Mn in 2012. Sri Lanka’s major export to Japan in 2013 were tea (22% of total), apparel (17%), fish & prawns (17%), and coconut fibre /coir (8%).  In 2013, Sri Lanka’s IT and business process management (BPM) exports stood at $ 719 Mn, surging 237% from 2007’s exports of same.  77% of 2013 exports were under BPM.  Sri Lanka has now set a target of $5Bn IT & BPM exports by 2022 of which it expects 62% to be BPM while also creating 200000 jobs and 1000 start-ups by 2022.  To support the growth targets, in its National Budget 2014, the government proposed a 5 year half tax holiday for new partnerships or firms engaging in international services in the field of Accountancy, Commerce, Finance, Law, IT, Engineering and Architecture.

After discussions with Outgoing Representative Sakishige, Minister Bathiudeen joined Kazuhiko Obama (New Resident Representative of JETRO Colombo) in discussions and gave an introductory explanation of Sri Lanka’s business and growth outlook to the new JETRO Representative on 04 September.