From an ancient port city to a lively investment hotspot, the city of Colombo has come a long way to become the next big technology hub of South Asia.
Due to considerable economic growth and an improved distribution of wealth, the consumption of high-end technological products and services has risen substantially over the past few years. As noted by global web analytics giant StatCounter, mobile Internet users alone now consists more than 58 percent of the country’s total online population. It has also been estimated that more than 11.5 percent or roughly 2.3 Million citizens now use Facebook on a regular basis.
These expansions have been further indicated through data from the Sri Lankan government as well as the World Bank Group, which provides undeniable proof that the country is well on its way to become the next investment oasis within the region. Particularly the foreign direct investments (FDI) in Sri Lanka have seen a steady increase for the past few years. In the first half of 2014 alone, the value of total FDI reached US $ 817 million, which was up 51 percent from the same period in the previous year.
According to global trade portal Santander, the majority of investments were the result of intense competition from Chinese and Indian investors. Tech start-ups were a favourite especially among European Union (EU) investors, which resulted in online-based ventures such as the real-estate portal Lamudi, the online shopping community Kaymu, the vehicle marketplace Carmudi as well as the recent online venture, the Everjobs.
Nevertheless, exports from Sri Lanka are also expected to show a significant growth. Financial analysts have predicted a positive outcome with the country being able to regain the GSP Plus trade concession with the EU. Stated by the Industry and Commerce Ministry, an EU Trade Working Group (TWG) delegation is expected to arrive in Colombo at the end of March (24th). Bilateral trade between EU and Sri Lanka crossed the US $ 5 billion mark up to US $ 5.07 billion in 2014, which was an increase of 3.6 percent from US $ 4.9 billion in the previous year. Since around 69 percent of trade between Sri Lanka and the EU are the exports done by Sri Lanka to the EU, the successful discussions will result in significant growth in the country’s export industry for the next five years.
Commenting on Sri Lanka’s financial prospect and new venture opportunities, real estate portal Lamudi.lk’s MD Hugh van der Kolff said, “In 2013, Sri Lanka’s mobile market became saturated with nearly a 100 percent market penetration. As an online-based company, the technological expansion of Sri Lanka is highly important, since it provides a solid foundation for tech start-ups like us, to invest in a city like Colombo knowing that growth will be an inevitable factor.”