‘‘ Sri Lanka Human Capital Summit’’

Conference Insights Report

Towards a Future Ready Workforce
11th -12th August, 2016 | Taj Samudra, Colombo
Table of Contents

Introduction

Sri Lanka Human Capital Summit 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Executive Summary

A consolidated glimpse of the summit’s outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Conference Theme

Towards a future ready workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Guest Speech

Human capital development as a key driver for inclusive and

sustainable development – The Malaysian Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Guest Speech

Building a future ready workforce – the indian experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Keynote Address

Sri Lanka as a talent capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Sector Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Tourism and Hospitality Sector

Sector Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Services Sector

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Logistics and Maritime

Logistics and Maritime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Manufacturing and Construction Sector

Sector Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Foreign Employment Sector

Sector Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Leadership Insights

Structuring National Human Capital Agenda for the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Strategy to Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

List of Distinguished Speakers and Panelists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Foreword:

The Human Capital Summit 2016 was a success for a variety of reasons, particularly as result of the unique victory point
that Sri Lanka is privileged to have in the collaboration of the government with industries and academia. It is this
collaborative environment that will enable Sri Lanka to stay future ready from a talent standpoint.

Technology has been a constant enabler of change in organizations and the world’s economies at large. In a very quick
time frame, it has been able to revolutionize and transform an organization’s relationship with three main stakeholders–
customers, suppliers and employees. It took about 50 years after the telephone was invented for it to reach half the
households in the US and 38 years for radio to reach a 50 million mark globally, but it took 1 year for Facebook to reach 6
million user base and five years to grow one hundred times. That is the speed of transformation through technology.

In such a time, the conventional approach to gaining a competitive advantage does not hold good any longer. The
threat of losing market share to competitors within the industry has diminished in comparison to the threat from digital
platforms. Automotive companies need to keep up with the likes of Uber, hospitality with the likes of Airbnb, and
banking and financial services with the likes of Fintech. This has changed the way that organizations look at the concept
of competition because disruption can now occur from outside the industry.

Speed, agility, innovation – if technology can have these qualities, so must our talent. Sri Lanka is poised to undertake a
talent transformation and must ensure that its culture and core values of humility and concern for others are not lost in
the process but instead used to strengthen the movement. When industry and academia join forces with a candid
government like Sri Lanka’s, the resulting candor and trust is a genuine advantage that can help the country to not just
leap frog, but pole vault into the future!

Sandeep Chaudhary
CEO, India, Aon Hewitt
INTRODUCTION
Sri Lanka Human Capital Summit 2016

The Sri Lanka Human Capital Summit 2016 was organized by government run National Human Resource Development
Council (NHRDC) and the Sri Lankan Association of Human Resource Professionals (AHRP) on 11th -12thAugust 2016.
This conference, under the theme “Towards a Future Ready Workforce” deliberated human capital opportunities with a
view to develop a national agenda to support Sri Lanka's growth sectors.

One of the key features of this summit was to receive inputs from experts in the area of human capital development to
assist the government in reshaping its Human Resource Policy as part of its new economic development plan. The
conference was enriched by the diversity of stakeholders and supporting partners such as the Employers Federation of
Ceylon, ILO, ADB and the World Bank, who gathered to discuss and find solutions for human resource challenges and
help Sri Lanka develop a competitive edge.

The Summit focused on the key growth sectors in Sri Lanka and highlighted opportunities that Sri Lanka has on four
sectors considered drivers of economic growth – Tourism and Hospitality, Services (Financial, Insurance, ICT/BPMand
Logistics & Maritime), Manufacturing& Construction, and Foreign Employment.

The essential purpose of the summit was to develop a Human Capital Vision – 2020 for Sri Lanka. This involved multiple
steps. The first was to identify key sectors and then understand the potential for creating job opportunities across the
identified sectors in Sri Lanka. Then the aim was to understand the existing human capital challenges in the identified
sectors, and create a roadmap to address the challenges. This involved identifying current gaps in capability between Sri
Lanka and the competitive global demands it faces and formulate strategies to address the gaps. Finally, the summit
aimed to create avenues for synergy between corporate organizations, government and academic institutions. This
would make possible the design of implementable action plans to create the right environment for a future ready
workforce.

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EXECUTIVE SUMMARY
A Consolidated Glimpse of the Summit's Outcomes

Sri Lanka has recorded a very high economic growth rates compared to other countries in South Asia, yet the country's
per capita income is relatively low. Sri Lanka needs to now focus on being an efficiency driven economy. The country's
higher education and training standards will be critical in driving this transformation.

The four sectors that will fuel the economic growth for Sri Lanka are Manufacturing and Construction, Tourism and
Hospitality, Services and Foreign Employment. The sectors under review are critical for their contribution to
employment given the transformation that is taking place in the economy.

The report highlights the business and human capital challenges and opportunities in the identified sectors

Tourism and Hospitality Sector

Tourism has emerged as the fastest growing sector with an average

annual economic growth rate of 25 – 30% over the last three years. Way forward:

Sri Lanka has been leveraging its rich tradition, heritage and exotic
locations to position itself as one of the top travel destinations
globally.
The sector engages in labour intensive activities and hence increase
 Relook at the existing visa application
process and align the same to support
mobility of tourists from key destinations
 Institutionalize trainings that focus on inter
personal skills and soft skills for the students
and existing staff members

in number of tourists will result in increase in employment directly
in the hospitality sector as well as its allies such as travel, food &
beverage and entertainment.
Attracting and retaining people seems to be a predominant
 Develop well-defined career paths that
helps engage and retain the employees
 Develop an integrated approach to
promote tourism by branding Sri Lanka and
its core attributes in all export products and
services

challenge for Sri Lanka in the tourism sector. A large population of

the skilled workforce in Sri Lanka has migrated to Mauritius and Middle East. Despite over 40% of women being
educated, only 5% of them enter the workforce.

Services Sector

A.) ICT/ BPM , Financial Services and Insurance Sector:

The services sector (ICT/BPM, Financial Services & Insurance) has

Way forward:
been facing constant changes with development in technology and  Build capabilities by understanding the
innovation. The global investments in disruptive technology larger demands of the industry
 Enhance investment in higher education
amounts to 20 billion $, this could potentially result in impacting
 Move to data based solutions for smarter
the existing business models and transform the nature of jobs that is and efficient business solutions
currently being performed. It is estimated that over 40% of  Embrace opportunities to move up the
value chain in the technology continuum by
outsourced services will either get automated or redundant by investing in digital technology
2018 and almost 100% of IT roles that currently exist will undergo a  Develop an innovative training
infrastructure for new age learning
transformation. To remain competitive in the industry Sri Lanka
methodologies like experiential learning,
must have a focused strategy to embrace the change in technology simulations etc.

and building capabilities for the future.

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B.) Logistics and Maritime Sector:
Way forward:
Sri Lanka has a strategic advantage to become a top five global  Developing clear and transparent maritime
policies
logistics hub. The country can become a gateway to open up trade
 Design fair wage structure to attract and
activities between Singapore and Middle East. In order to become retain employees
globally competitive in the logistics space Sri Lanka must have a  Collaborate with global organizations and
embrace best practices
well-articulated national vision for logistics and maritime
 Create an environment that encourages
operations. diversity and inclusivity

Manufacturing and Construction Sector

Way forward:
Construction industry has a huge short fall of both skilled and  Create a skill blue print that is
contextualized to the country's agenda
unskilled labour. There is a very low level of investment in skill
 Focus on moving up the value chain in
building within the construction sector. Sri Lanka has significant manufacturing by capability development
potential for growth in the manufacturing space. Investment in  Bring in clarity on the core focus areas
within manufacturing
technology is critical for future development of the manufacturing
 Organizations and government need to
industry. The manufacturing strategy of the country must align with collaborate effectively in skill building
activities
the larger goals and objectives of the nation

Foreign Employment Sector Way forward:

 Increase involvement of diaspora in
Sri Lanka has a significant population of workforce that is migrating creating foreign employment
to Middle East and Mauritius. Skill development must align with the  Relook at the migration policies and
strengthen governance around the same
larger demands of the target regions. Sri Lankan government
 Identify higher value jobs that are of
currently has the capacity to train up to 75,000 people through demand in the international markets and
vocational training centers the challenge lies in ensuring the create capabilities for the same
 Enhance safety and security norms of the
effectiveness of the programs
migrating workforce

Conclusion

The Human Capital Summit – 2016 served as a platform for a dialogue between industry experts and global thought
leaders. The conference also served as a platform to identify solutions to bridge the skill gaps which would enable Sri
Lanka build a future ready workforce. During the sessions the speakers suggested several initiatives the industry leaders
and Sri Lankan government can undertake towards maximizing job opportunities in the identified sectors. Following are
a few critical pointes that were highlighted from the session

 The speakers emphasized the need to create a formal forum comprising of corporate organizations, government
representatives and academia to provide guidance and support in developing the skills for the future. The need to
institutionalize the forum and articulate clear roles and responsibilities for the forum was also discussed

 A very common issue that was stated across industry pillars is the lack of training in soft skills that will help in
immediate employment. A large section of educated population in Sri Lanka is unemployable due to lack of training
in work specific skills. There is a dire need to build communication and soft skills in the workforce. It is also critical to
increase the education standards of schools and colleges to help in producing talent that are globally competent. A
key theme that was discussed was on the evaluation mechanism of trainings provided through vocational

5
 institutions. It was emphasized that the success of these institutions should be determined by the quality of
education and not by the quantity of students graduating.

 The speakers argued the importance of focusing on Gender Diversity and the importance of attracting women
employees into the workforce. There is a need to provide a healthy and an accommodating ecosystem to retain and
motivate women. Few best in class organizations also have flexed policies to empower women. There is also a need
to the strengthen governance mechanisms and increase transparency in managing compensation of the workforce
in industries like construction and logistics.

 The importance of investment in best in class technology and innovation across all sectors was discussed. Sri Lanka
today needs to develop a focused strategy and must have a clear vision for developing capabilities in technology.

 The panel also deliberated the importance of reinforcing the core values and culture of the country in all sectors. Sri
Lanka needs to leverage its core values in creating a competitive advantage.

The outcome of the summit will enable the government to create clear implementable action plans and initiate policy
changes with a view to create 1 million jobs by 2020

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Day 1 - Pre Forum

Towards a Future Ready Workforce

Competing in the global economy is a complex task, requiring countries to not

only have advanced technical and vocational skills but also have a flexible
workforce that adjusts to the rapid shifts in demand. The summit aims to shape the
national growth agenda by addressing human capital issues which will in turn
contribute to achieving the objectives of the Sri Lankan economy.

Amit Dar
Director, Strategy and Operations
Human Development; and Director,
Education Global Practice, World Bank
For Sri Lanka, the availability of talent with employable skills is a critical factor in
creating an efficient and competitive economy. While the nation has success
stories in the form of achievement of gender parity and the quality of schooling for
millennials, about 140,000 employees entering the labour market today lack job
specific skills. Healthy growth and structural changes in the economy have been
driving a demand for Sri Lankan labour, but the skill gap that has emerged as a
result of the changes might be starting to hold back this growing economy.

In order to address this situation, an effective skill development system is the need of the hour. The Human Capital
Summit serves as a platform for effective synergy between the government, private sectors and training providers to aid
with this and address the needs of the labour market. While skills do not automatically lead to growth, they need to be a
part of the country's development agenda in order to receive the necessary investment of time and resources.

The global economy today requires advanced fungible skills in workers who are able to adapt to domestic as well as
global shifts in the industry. Such talent can also be used in the creation of new jobs, helping the country grow at a rapid
rate. At an individual level, technical and cognitive training has been shown to help people improve their employment
status, thus leading to improved wellbeing and reduced poverty.

Hence it becomes important for the nation to invest in training its people, and to ensure that the education system is
oriented towards creating youth who have strong foundational skills as well as job specific skills that enable them to
perform effectively. Early childhood education is important for foundational semantics while skill development
continues as a cumulative process throughout a person's lifetime. An effective system would embrace both these
aspects of learning.

Another factor to consider in this journey is the demand for skills, which is affected by economic policies and growth
plans. The shift in focus from agriculture to manufacturing and services also needs to be recognized. Skills being
developed must be in tune with the requirements in the market, and this supply of talent is determined by quality of
workforce, government policies and financial support. An effective match of demand and supply is vital, and training
providers need to be cognizant of this, creating differentiated strategies of skill development rather than universally
applying a standard approach.

There are lessons in skill development from the global market that we as a nation can leverage in order to boost skill
development in Sri Lanka. One is to begin early and introduce interventions at the school level so that literacy and soft
skills are effectively developed at a time that enhances retention. The next would be to ensure that financing of programs
is linked to outputs, where the labour market and its demands determine the need for investment, making training
relevant. At the same time the informal sector and small enterprises can also be supported to make use of untapped
potential. Another lesson would be to emphasis the roles that the government as well as employers can play in the
process. The government needs to set standards of quality and play a crucial role in controlling education norms or
rolling out selective financing for skill development. Employers need to voice their opinions on labour policies and
support the government in its larger agenda. Finally, a key takeaway is to remember to monitor and evaluate the
progress and effectiveness of interventions that are being introduced.

The road ahead is not obstacle-free, yet this is a priority for a country that holds inclusive economic growth as a hallmark
of its strategy. The primary challenges are in increasing the quality and relevance of higher education, providing wider
access to vocational training and ensuring a match between demand and supply of skills in the market. It is important for
us to collaborate and adapt, to ensure that Sri Lanka is at the heart of this change that is stirring the global market.

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Guest Speech

Human Capital Development as a Key Driver for Inclusive and Sustainable Development – the Malaysian
Experience
The World Economic Forum's human capital report for the year clearly states that
a fourth industrial revolution is set to occur which will lead to profound shifts
across all industries, reshaping productions, consumptions, transportation and
delivery systems. New technology is changing the nature of work and impacting
business models across sectors. 2016 is a challenging year for the global
economy; Sri Lanka and Malaysia have not been spared.

Malaysia can be looked at as a case study, one that has demonstrated that with the
HE Dr. Zambry Abdul Kadir right leadership and ecosystem we can set the right economic trajectory. Malaysia
Chief Minister, State of Perak, Malaysia
has emerged from being a low income nation once dependent on rubber and tin
to become an upper middle income nation with strong economic fundamentals.
The policies and reforms introduced by the government set a foundation for this movement.

National development policies have been formulated that include core development plans for long, medium and short
term policies for specific sectors and industries. Among these are the new economic development plans (1970-99), the
NDP from 1999-2009, and the National Economic Plans (NEP) 2009 onwards. A notable intervention by the government
was the launch of Human Capital Development (HCD) which assumed a two-pronged approach – workforce
transformation and workplace transformation.

In more recent years, the efforts have continued. From 2011-15, a range of measures were introduced that created new
jobs and reduced unemployment rates from 3.3% to 2.9% A minimum wage policy was introduced and had a positive
impact for 1.9 million wage earners. Similarly, investment in education has yielded results in increasing social wellbeing.
To further this success, the Malaysia Education Blueprint and Talent Roadmap 2020 has been drafted to charter a clear
transformation journey in the field.

Going forward, the government continues to hold human capital development as a priority in the 2016-20 HCD
agenda. The focus is primarily on improving efficiency of the labour market, meeting the industry demand,
strengthening lifelong learning and improving the quality of the education system.

The Malaysian case offers some key lessons to learn from. For one, countries must contextualize their core development
philosophies and policies to its needs and circumstances. It is also important to maintain a peaceful coexistence among
different rational groups within the country and foster cooperation between political parties affiliated to various
ethnicities in order to maintain political stability. The eradication of poverty is a parallel area that can help increase social
wellbeing. Additionally, sustained economic growth requires strong governance and leadership.

Thus leadership becomes a key focus area, the pivotal point that can drive further change. Leaders must embrace the 3
Fs – Field (go the field and take action), Feel (empathize and feel for the people) and Fill (fill the expectations of the
people) in order to succeed in creating the desired impact.

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Guest Speech

Building a Future Ready Workforce – the Indian Experience

India has a federal system, where some subjects fall under the domain of the state
while others are controlled centrally. How does this federal administration build a
workforce that can meet the challenging demands of the Indian economy? The
best results can be achieved when there is synergy between the center and the
state, especially for a state like Telangana that was formed very recently and
currently operates like a startup. The key for economic growth is to harness the
power of human capital, to enhance the employability and competitiveness of job
seekers. What attracted investments from global technology in India back in 1998
Hon. Shri K T Rama Rao giants was high-value low-cost human resources.
Minister of IT, Municipal Administration &
Urban Development, Industries & Looking at global trends in the skills ecosystem, it is not surprising that the
Commerce, Public Enterprises, Sugar,
Mines & Geology, NRI Affairs, landscape is becoming ever more complex and evolving ever more rapidly.
Government of Telangana Approximately 25,000 new workers will continue to enter the labour market in the
emerging markets every day until 2020, and more than 200 million people
globally continue to be out of a job; yet, simultaneously, there is an expected shortage of some 50 million high-skilled
job applicants over the coming decade.

Secondly, a new wave of technological innovation which has already started – a Fourth Industrial Revolution – will bring
radical change to industries and labour markets worldwide. Digital talent platforms have the potential to empower
millions of poor and marginalized workers to access the global labour market as never before. The new technological
landscape can create opportunities for developing countries to leap frog technological development stages by
equipping their workforce to directly tap into the global labour market.

Lastly, the transition from education to employment has become fraught with uncertainty around the world. Globally,
nearly 35% of our human capital potential remains undeveloped, due to lack of learning or employment opportunities
or both. There is also a mismatch between the two as it is often observed that many of today's education systems are
disconnected from the skills needed to function in the labour market.

Telangana set up the Telangana Academy of Skills and Knowledge primarily to address the education employment
continuum. The academy bridges the students with the top organizations for providing internships that will help the
students get a real world exposure. There are two objectives for setting up the academy – to improve the employability
quotient and to inspire students to be job creators. Hyderabad has the India's largest technology incubator which
provides mentorships to students – technology, business and Legal and Intellectual Property mentorships. This package
is essential to create more entrepreneurs and more efficient workforce.

As a culture in South Asia there is no push for entrepreneurship. As a society we have to embrace and celebrate failure;
therein lies the key to entrepreneurship. “If you think imparting skills is expensive, try ignoring it!”

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Keynote Address

Sri Lanka as a Talent Capital

Human Resources is one of the key strengths that can allow Sri Lanka to
differentiate itself and improve its competitiveness in the face of a global
economy. Skilled human capital is vital to harness the country's key advantages
including the strategic geographic location, and to create more jobs to meet the
growth aspirations of a fast expanding middle class and revitalize the rural
economy.Hence new reforms are underway to ensure sustainable inclusive socio-
economic growth.

A new education and employment act is in the offing, under which the Human
Mr Ranil Wickremesinghe Resources Development Agency and Employment Relations Council will play a
Hon. Prime Minister
vital role in steering key initiatives, along with collaborative support from different
stakeholders.The new act will take forward the government's plans toward a
seamless education-to-employment continuum through measures such as compulsory education of 13 years, along
with other required reforms.

Learning continues to be an important part of capability building beyond high school education. Skill development is a
cumulative process that occurs in a variety of settings, engages a highly diverse clientele, involves multiple delivery
mechanisms and constantly responds to various occupational requirements. Thus strategies and action plans need to be
developed to provide opportunities for lifelong learning.

Education and skills development do not automatically lead to jobs and growth. Therefore, assessment of structural
changes in the economy and the skills gap that have emerged with the changing labour market conditions need to be
reviewed continuously.

Sri Lanka aims to become logistics hub by facilitating trade operations between South East Asia and Middle East and
hence focus on certain key sectors' like logistics and maritime and developing skills in these sectors become vital.

Given the future growth potential and envisaged development plans, Sri Lanka will have to overcome the scarcity of
skilled human resources apart from managing power and water requirements hence support from various stakeholders
within the nation becomes critical.

It is very critical for the private sectors to effectively collaborate with government in executing the Human Capital
agenda of Sri Lanka. The government will make efforts toward creating a suitable environment for collaboration with
private sectors and with experts in various fields. An example of such collaboration is the seeking of advice from
educational experts and global leaders as well as private employers while designing the curriculum for skill
development. It is also vital to change the low wage mentality and embrace inclusivity in the social market economic
policy. Another focus area will be to increase female participation in the workforce.

The Sri Lankan government is committed to providing maximum opportunities to the development of human capital
without any discrimination.The goal is to create 1 million new jobs in Sri Lanka by 2020.The development of a
comprehensive economic development plan that encompasses human resource development, job creation and
lifelong skills development is an integral aspect in achieving this goal.

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DAY 2 – Sector Analysis

SECTOR ANALYSIS
An Exploration of Critical Sectors for Human Capital

Sri Lanka has recorded very high economic growth rates compared to other countries in South Asia, yet the country's
per capita income is relatively low. Nearly two thirds of the workforce in Sri Lanka is in the informal sector, earning low
wages in poor working conditions.

If Sri Lanka's economy is to continue to expand into higher value added sectors and reduce poverty, it needs to be
efficiency-driven. However Sri Lankan firms cite the quality and supply of skilled technicians as the third most important
barrier to growth. Thus major skills shortages and mismatches appear to be holding back the country's development
efforts.

Sri Lanka is currently transitioning from a factor-driven to an efficiency-driven stage of development. At this stage in
country's development trajectory, competitiveness will increasingly be driven by higher education and training, and
certain sectors will gain importance. These sectors include Manufacturing, Tourism and Hospitality, Services, and
Foreign Employment.

The sectors under review are critical for their contribution to employment given the transformation that is taking place in
the economy. The country must have a well -articulated action plan for building human capital capabilities that are
contextualized to the needs of the industry.

The Human Capital Summit focused on unpacking potential of the identified sectors, understanding the existing skill
gaps and the strategies to address the same. The speakers also suggested suitable policy interventions based on other
market experiences.

The report highlights the key insights obtained from the conference and the recommendations highlighted by the
panelists.

The preamble to this report is the nationwide employment prospect that arises in the three major economic sectors
across the country. The following picture emerged in our analysis.

Sector Employment
5,500,000
Agriculture Industries Services

5,000,000 Poly. (Agriculture) Poly. (Industries) Poly. (Services)

y = 1167x – 5E + 07x + 5E + 10
2
4,500,000
R2 = 0.9381
4,00,000

3,500,000 y = –12751x2 – 5E + 07x + 5E + 10

R = 0.87
2

3,000,000

2,500,000
y = –7685.2x2 + 3E + 07x – 3E + 10
2,000,000 R2 = 0.5262

1,500,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 1: SECTOR EMPLOYMENT TRENDS

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The trends above have been based on the data available from the Central Bank. The outcome of this analysis is the
forecast of the additions of employment into the economy.

Table 1: Forecast Sectorwise Employment 2020

Potential Training Candidates

Year Total Training Agriculture Industries Services

2015 662,994 (30,219) 267,150 426,063
2016 392,760 (47,596) 189,957 250,399
2017 426,225 (62,967) 215,459 273,733
2018 459,691 (78,337) 240,961 297,067
2019 493,156 (93,707) 266,463 320,401
2020 526,622 (109,078) 291,465 343,735
Total 2,961,448 (421,904) 1,471,955 1,911,397

The forecast was based on the data available up to 2014. Hence the year 2015 is a forecast, which can be easily verified by
up to date data.

The overall share of the three sectors is depicted in the chart below.

Share of Employment in Sectors

49%
50% 48% 49%
46% 47%
45% 44% 45%
41% 42% 41% 42% 43% 43% 43%

40%

35% 33%
32% 31% 33% 32% 32% 31% 30% 31%
28% 27% 28% 29% 30%
30%
27% 27% 26% 26% 26% 26% 26% 26%
25% 24% 24%
25% 23%
21%
20% 19%

15%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 2: Sector Share of Employment

This indicates that the share of employment in the Agriculture sector steadily diminishing from 33% in 2011 to about
19% in 2019. The Services and Industries sectors increase from 43% to 49% and 24% to 31% respectively during the
same period.

The overall population entering employment is indicated in the following chart. It shows that 8.1 mill employed in 2011
moves up to 9.1 mill in 2015 and to 10.9 mill in 2019.

The government is seeking to create 1 million jobs during the period up to 2020. The requirement is higher being 2.3
million. Thus the challenge at the HCS is to find ways to fill the share of jobs assignable to the sectors from the overall
economic thrust of 2.3 mill new entrants into the job market.

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Tourism and Hospitality Sector
Sector Analysis
Tourism and Hospitality

Tourism accounts for 30% of the world's export, making it the third most important contributor to world trade. The
sector has recorded 7 consecutive years of above average growth globally. Tourism in Southeast Asia has grown from
7.6% in 2014 to 10% in 2016

At present Sri Lanka receives 1.8 million tourists and about 3.0 billion USD earnings in a single year. Sri Lanka has
launched 79 programs in hospital and tourism related topics in public and private TVET schools and 19 tourism related
courses in colleges, universities and training institutions. The average length of stay of tourists in Sri Lanka is 10 days,
which is one of the highest in the world.

1995 2000 2005 2010 2015 1995 2000 2005 2010 2015

International tourist arrivals (in millions) International tourist receipts (US$ billion)

International
Year in millions Year in millions Year US $ billion Year US $ billion
tourist
1995 0.4 2006 0.6 arrivals and 1995 0.3 2006 0.4
1996 0.3 2007 0.5 receipts, 1996 0.3 2007 0.4
1997 0.4 2008 0.4 1997 0.3 2008 0.3
1995-2015*
1998 0.4 2009 0.4 1998 0.3 2009 0.3
1999 0.4 2010 0.7 1999 0.3 2010 0.6
2000 0.4 2011 0.9 2000 0.3 2011 0.8
2001 0.3 2012 1.0 2001 0.2 2012 1.0
2002 0.4 2013 1.3 2002 0.4 2013 1.7
2003 0.5 2014 1.5 2003 0.4 2014 2.4
2004 0.6 2015 1.8 2004 0.5 2015 3.0
2005 0.5 2005 0.4

In terms of human capital, the tourism and hospitality sector is more diversified than other sectors, and has the potential
to create employment opportunities and generate income throughout a complex supply chain of goods and services. It
is a very labour intensive sector that requires professionals with diverse skill levels.

Attracting and retaining people seems to be a predominant challenge for Sri Lanka. Despite over 40% of women being
educated, only 5% of them enter the workforce. Further, a large population of the skilled workforce in Sri Lanka has
migrated to Mauritius and Middle East as there is a lack of a competitive rewards system that aligns with the Industry
standards in these other regions.

To address this problem, the caliber of the front line staff needs to be improved, and they need to be trained on English
speaking skills and soft skills. The efficiency and effectiveness of the workforce need to be improved, in line with global
standards.

This brings us to the evident need for human capital development, a process that must be integrated with the larger
industry strategy. The quality of higher education and vocational training institutions needs to be in line with global
standards. The government needs to identify important sectors and the relevant skills required, and train and educate
more people in these sectors to match the demand and supply in the industry. It is also vital to ensure behavioral training
is provided as it is an important factor for success in the hospitality sector

14
In this light, the summit explored areas where actions can be taken.
Going forward, Sri Lanka needs to invest on building capability and
creating more jobs in the tourism sector. The focus could be on
sustainability and the creation of green jobs, along with values of
innovation, quality and creativity. The next step would be to
associate these jobs with well-articulated career paths to ensure
attraction and retention of the right talent, and also to create an
ecosystem that encourages women to participate in the workforce.
Having established these, it would be beneficial to focus on creating
awareness about the existing opportunities and careers in tourism.
There is scope to widen the pool of resources being utilized, for
instance some retired armed forces officers could be brought back
into the workforce owing to a similarity of competencies required.
Beyond that, efforts can be made to reach households and
communities that currently do not receive classroom education and
build their capability through training. Efforts in training must
adopt an integrated approach, working with allied industries such
as travel and airlines and not being limited to hospitality.
Such integration could also be reflected at a higher level, focusing
efforts on strengthening partnerships and stakeholder engagement
in the government's relationships with its key partners – public and
private sectors, associations, education and training providers and
civil society. This could be a strong contributing factor to the
creation and implementation of well-informed policies that lead to
sound investments, job creation, socio-economic development,
and the respect and promotion of local culture and products. A final
success factor would be to ensure that all these efforts have an
impact, which can be done by developing an integrated approach
to promote tourism. A strong brand for Sri Lanka can be articulated,
highlighting its core cultural attributes and this must find its way
into all export products and services to make it known to the global
audience.
15
Way forward:
 Relook at the existing visa application
process and align the same to support
mobility of tourists from key destinations
 Generate intelligent and well-informed
policies that lead to sound investments, job
creation, socio-economic development,
respect and promotion of local culture and
products
 Transmit values of innovation, quality and
creativity to tourism professionals and
leaders of tomorrow
 Invest on building capacity in sustainability
and create green jobs in tourism
 Reach households and communities and
build the capacities of those who cannot
reach the classroom
 Design a well - articulated and clear career
paths that ensures attraction and retention
of talent
 Have a larger training agenda that also
ensures job creation in allied industries such
as travel, airlines etc.
 Develop an eco-system that supports
women and ensures that they are given the
right opportunities for development
 Increase awareness for a better
understanding of tourism sector career
paths
 Improve partnerships and stakeholders
engagement (public and private sectors,
associations, education and training
providers and civil society)
 Invest in big data and analytics for tourism
related information at entry points, internal
destinations, origins, supporting services
and spending
 Develop an integrated approach to
promote tourism by branding Sri Lanka and
its core culture attributes in all export
products and services
 Conduct annual revision of the training gap
analysis conducted in 2016 by NHRDC to
forecast training needs annually
Services Sector
Sector Analysis
Services

While a large share of Sri Lanka's GDP is represented by agriculture, the sector is slowing due to several factors. For one,
there is a natural limitation of the produce that the land can yield. These supply constraints coupled with slow growth in
demand for agricultural products make it less viable in terms of creation of more jobs in the market.

Sri Lanka, with this limited natural resource base and a high population density of 293 persons per square kilometer,
would find it difficult to enhance growth through agriculture alone, and any intensification of cultivation would require
innovation through the services sector.

With the rise of globalisation, the services sector seems to be a better bet for creating employment opportunities. The
clientele for services is no longer restricted to the domestic market. In this context, considering geographical location,
demographic data and skills of the youth, Sri Lanka possesses a unique advantage in providing financial and IT services
through BPO and KPO, ports and logistic related services, tourism, aviation and foreign employment etc. efficiently
compared to other countries in the region. As of 2014, the services sector provided employment for 3,775,000
compared to 3,551,000 in 2013 indicating a slight increase in employment in the sector.

Appropriate policy changes and a sense of direction could enable the services sector to overtake agriculture and
manufacturing together in the economy and achieve a 70% contribution to GDP by 2030, at par with developed
nations. This would include a variety of services that can be classified into two broad categories – ICT/BPM, Financial
Services & Insurance and Logistics & Maritime.

ICT/BPM, Financial Services & Insurance

The sector comprising ICT/BPM, Financial Services & Insurance has had to face constant changes with the development
in technology and innovation. The global investment in disruptive technology amounts to USD 20 billion, which could
potentially impact existing business models and transform the nature of current jobs.

It is estimated that over 40% of outsourced

12.2 B
ser vices will either get automated or 14

redundant by 2018 and almost 100% of IT 12

roles that currently exist will undergo a 10

transformation. The availability of key skills in 8
the midst of constant technological change
6
4.0 B
has become a key concern for the
4 2.4 B
government along with shifting patterns of 2.2 B
1.8 B
2
customer spending and behavior. It is
therefore vital for the government to embrace 0
2010 2010 2010 2010 2010
the technological shif ts and do so
USA EUROPE ASIA PACIFIC OTHERS
strategically. In order to be at the forefront of
Source: CB Insight
the new industrial revolution, Sri Lanka must
look at technology as an enabler and must Global Fintech Investments in $ B
direct strategic investments in this area.

The primary challenge Sri Lanka faces from a

human capital perspective is that despite producing many graduates, a majority of them are not job ready as they lack
industry specific skills. There is a severe shortage of qualified labour in the digital technology space, especially for
activities that are at the higher end of the value chain in technology.

Scope for development in this sector exists in the form of the various adaptive moves that can be undertaken. Embracing
technology can be a boon; social media can be used to impact the workforce effectively, analytics can determine the
demand and supply of talent, and e-learning platforms can aid dissemination of knowledge.

17
There also needs to be a strategic approach for leadership development in this sector, involving plans for succession and
mobility. Collaboration and diversity of thought should be nurtured and an industry wide workforce plan can be created
after understanding employee expectations and requirements of the employers. Learning labs that focus on experiential
learning and simulations can also be introduced, potentially improving retention.

The larger development interventions must focus on

2022 building business acumen along with IT-core skills as this
combination is important to provide superior services in
the future. This could be a collaborative process by which
2013
the government and private sector enterprises come

192
0 together to develop plans for the future. The government

0
162 $5000 M
could invest in skills related to digital, analytics and
technology and collaborate with global universities for
308

$720 M
0

curriculu
558

IT BPM
Sri Lanka Growth in IT Sector
m expertise. It could also form a forum where private sector
enterprises and subject matter experts are invited to co-create
strategic plans for development.Source: SLASSCOMIn the long run,
the efforts that will yield the most lasting results will be those in the
field of education and training for this sector. The entire education
Way forward:
 Invest in skills related to digital, analytics
and technology by understanding the
requirements for the future. Build business
acumen along with IT-core skills. Emphasize
soft skills training and English Language
training.
 Develop plans in collaboration with private
sector enterprises. Capability building
interventions must be created in line with
th3 future demands of the industry and the
country

system would need to be revamped to become future focused and
introduce innovative learning tools and techniques. The quality of
training programs and skill development initiatives needs to be
elevated to match industry requirements. Simultaneously,
employers need to adapt to the changing requirements of the
millennials and introduce smarter programs for career growth in
this sector. Organizations need to manage compensation
effectively in light of increasing people costs due to urbanization.
Meanwhile the emphasis should also be on English language and
soft skills training. Vocational training centers can be introduced in
schools and universities, and more electives should be available.
The way learning is delivered and measured will slowly shift from
one-way lectures to projects and assignments so that capability
building interventions are in line with future demands. To be
successful in these changes, it is important to empower teachers by
providing the right training to them and increasing their
competence to global standards. There might be a related need to
revise their compensation to maintain high quality educators.
 In the short term the government must
focus on collaborating with global
u n i ve r s i t i e s to a c c e s s h i g h qu a l i t y
curriculum, and form a forum for
development of strategic plans where
private enterprises can provide their inputs.
 In the long run the government must
revamp the entire education system to be
future focused. Innovative learning
techniques need to be introduced, teachers
need to be trained, assignments need to be
made more project-based and practical,
and more electives need to become
available. Vocational training centers can be
set up within school and college campuses.
 Embrace opportunities to move up the
value chain in the technology continuum by
investing in digital technology
 The government agencies should review
and improve education system to meet
future needs

18
Logistics and Maritime
The second category of services pertains to Logistics and Maritime. Due to globalisation, declining trade barriers and an
increasingly mobile workforce, the logistics industry today continues to enjoy above average growth. The effective
management of logistics has become the new source of national competitive advantage because of its strategic benefits
to businesses and society.

Sri Lanka possesses a strategic locational advantage needed for it to develop into a key logistics hub in South Asia. With
the increasing flow of shipment cargo through the island, Sri Lanka is in a good position to further develop its logistics
sector, providing integrated and high quality value-added services to international trading and transportation
companies. To achieve this goal, overseas participation in the introduction of advanced technology and business know-
how is essential.

However, when it comes to human capital, Logistics & Maritime remains an unattractive industry for good talent and
thus the availability of industry specific skills is a great challenge. Business and strategic thinking skills is critical for career
progression in this industry and the ability to understand revenue drivers and ability to optimize value will be critical
going forward. The industry is unbalanced in terms of gender, with few women employees in the workforce.

One way to address this could be to create awareness among students and potential employees on the career
opportunities in the logistics industry, and work on branding the industry to attract and retain talent.

Other areas offering scope for growth include increased investment

in technology for a better competitive advantage, and Way forward:

development of customized training modules that are in line with
the industry context by consulting SMEs and industry leaders.
The way forward would thus include addressing some of these
challenges and utilizing the opportunities, by first developing a
strong vision and purpose that the country wishes to achieve in this
space. There should be a logistics master plan for human capital and
the industry must work closely with the Tourism sector to create a
fungible and efficient pool of talent for the future. This would also
require the identification of areas where jobs can be created in the
logistics industry, in line with the plans and objectives the
government has for this industry, and secure those jobs by
designing a fair wage structure and strong governance policy for
maritime and logistics labourers.
 Develop a strong vision and purpose that
the country wishes to achieve in this space
 Identify areas where jobs can be created in
the logistics industry in line with the plans
and objectives the government has on this
industry
 Design a fair wage structure and strong
governance policy for Maritime labourers
 There should be a logistics master plan for
human capital and the industry must work
closely with the Tourism sector to create a
fungible and efficient pool of talent for the
future
 Creating an environment that encourages
diversity and inclusivity

20
Manufacturing and
Construction Sector
Sector Analysis
Manufacturing and Construction

With globalization of trade and services and advancements in

information and communication technology (ICT), the earlier The manufacturing sector in Sri Lanka grew
bottlenecks for industrial growth no longer prevail. Industrial around 17.2% from 2013 to 2014 in its
outputs can now be jointly accessed by many nations or countries contribution to the country's GDP. It
rather than belonging to just one. Countries can now specialize in employed 1,514,000 people in 2013, which
sub-components, contributing to a global assembly line. increased to 1,535,000 in 2014. The
construction sector contributed 9.7% to
In the conte xt of the global industr y, each countr y's
GDP in 2014, indicating a 20.2% increase
competitiveness and cost-effectiveness become crucial to their
compared to 2013. In 2014, it provided
success. Sri Lanka attracted significant foreign direct investments in
employment for 615,000 people which has
2014 but the FDI was highly concentrated in economic
grown 7.3% compared to 2013 and
infrastructure development. Manufacturing industries attracted
represents 6.57% of the total employment.
only 20% of FDI in 2014, compared to 25% in 2013. With the
expected government policy changes on development of major
infrastructure projects, there is tremendous expectation within the
private sector of the opportunities to come. With the current expected FDIs and investments promotions, this sector
expects to grow significantly by 2020.

While in terms of the economy we may look at manufacturing and construction as part of the same sector, each one has
its own unique human capital challenges. The manufacturing sector in Sri Lanka lacks the complexity in production that
is required for the future, while the construction sector faces a shortage of human capital itself, due to migration.

In the manufacturing sector, there is a strong need for more on-the-job training. At present, more than 80% of Sri Lankan
workers do not receive on the job training. Globally, the demand for skills in this sector is moving towards non-routine
skills with less emphasis on manual labour skills. Thus Sri Lanka needs to address the huge skill gap that it has identified
between global needs and domestic capacity, especially in vocational and cognitive skills that are growing increasingly
important.

With these issues in mind, it is vital for Sri Lanka to develop a clear and well-articulated purpose and vision for
manufacturing, with a focused agenda for different segments within the sector. The focus would be on moving up the
value chain in terms of Sri Lanka's capability and reducing reliance on the older labour-intensive model. Diversification of
the sector could also be considered. For a majority of these actions, embracing technology would be the critical
stepping stone, and this can happen either by adopting and imitating existing practices or developing in-house
technological solutions.

Meanwhile the construction sector has begun to witness the shortage of skills even before the commencement of key
infrastructure projects that the government had envisioned. A large population of professional and technical workforce
has left the country for better prospects in the Middle East and Far East Asia. Skilled and unskilled workers have migrated
primarily for better wages, and the numbers joining the construction industry have drastically reduced. This could be
attributed to a perceived lack of job security with a prevailing assumption that they may be laid off during a slump in the
economy. It could also be due to the physical occupational hazards in construction or the lack of dignity of labour in this
sector.

22
The way forward would be to affect a paradigm shift in the image,
processes and purpose of the construction industry which would
involve enhancing the professionalism of the industry, raising the
skills level, improving industry practices and techniques, adopting
an integrated approach to construction and a collective
championing effort for the sector itself.
Some of the issues need to be directly addressed by creating a
suitable work environment and creating a more attractive wage
structure. The image of the sector needs to be changed among
prospective employees, which would require partnering with other
stakeholders and taking an integrated approach to marketing. The
government needs to play an active role in the development and
improvement of the technical support infrastructure, by increasing
investment in training and education as well as research and
development and the penetration of IT in construction.
Way forward:
Manufacturing
 Develop an overall vision for the sector and
a focused agenda for different segments in
manufacturing
 Reduce reliance on labour intensive models
and develop skills higher up in the value
chain with a focus on technology and
knowledge
 Invest more in secondary, TVET and tertiary
education to produce more top level
engineers and high level technicians
 Collaborate with private sectors to create a
focused game plan for skill development
and revamping the curriculum in line with
global standards

For manufacturing and construction, technology is a recurring

theme to address current challenges and possibly insulate Sri Lanka
Way forward:
against challenges in the near future. Sri Lanka must be selective in
Construction
choosing the level of technology to adopt, and develop the
 Develop and improve the Technical
country's ability accordingly. The FDI obtained must be used Support Infrastructure.
optimally to facilitate this movement. If the decision is to adopt
 Increase investment in training and
existing technology from other countries, there is a need to education
examine what aspects will be borrowed from each country and  Increase investment in R&D and the
elucidate the rationale behind these decisions. Is it also necessary to penetration of IT in the industry
identify which areas will require technology in the next few years  Bring about a coordinated approach to
rather than indiscriminately attempt to use technology everywhere market the industry among the perspective
at the same time. The current focus in Sri Lanka seems to point employees

towards skill development and capability building. The sector  Provide an attractive wage structure and a
suit able wor k environment for t he
needs investment in secondary, Technical Vocational Education &
workforce
Training (TVET) and tertiary education to produce more top level
 Affect a paradigm shift in the image,
engineers and high level technicians. Public and private sectors
processes and purpose of the construction
must join hands to create a focused game plan for skill development industry. This requires five strategic thrusts
and revamping the curriculum in line with global standards, to listed below:
make Sri Lanka's people globally relevant. 1. Enhancing the professionalism of the
industry
In order to up the game for Sri Lanka it is important to embrace
2. Raising the skills level
technology by either adoption of existing practices or developing
3. Improving industry practices and
them in-house. Technology is a key factor in the space of
techniques
manufacturing and construction. Going forward there is a need to
4. Adopting an integrated approach to
explore what level of technology is needed, for what purpose and in
construction
which areas it will be needed, and where the solutions will be
5. A collective championing effort for the
adopted from.
construction industry

23
Foreign Employment Sector
Sector Analysis

Foreign Employment
International labour migration from Sri Lanka has been increasing
over the past three decades. However, the total number of Approximately 263,307 persons departed
departures for foreign employment declined by 12.4 percent for foreign employment in 2015. The
during 2015 partly due to economic slowdown of activities in the professional, skilled labour and semi-skilled
Middle East and restraints in the departure of female workers for labour categories recorded an increase in
low-skilled employment. In 2015, foreign remittances decreased departures while all other skills recorded
from USD 7018 m to USD 6980m in 2015 whereas due to exchange decline in 2015. The skilled labour category
rate depreciation foreign exchange, remittances grew from Rs. contributed to 31.2 percent of total
916,344m to Rs. 948,957. Although remittances received from the departures.
Middle East, European Union and other European countries
declined, remittances received from Far East Asia and South East Asia
increased during the same period.Sri Lanka established the Ministry of
Foreign Employment Promotion in 2007 and Bureau of Foreign Employment in 1985 to handle various administrative
and legal regulations, laws and services. The country faces a number of challenges with foreign employment –
protection issues for the high concentration of women workers among the low skilled categories, low remuneration
resulting in low remittances, the narrow range of destinations for workers, and high dependence on the Gulf countries.
Among the departures in 2015, approximately 84 percent were to the Middle East and 54 percentage of remittances
were received from Middle East
Therefore, it is imperative to diversify foreign labour markets and
In 2015, foreign remittances decreased
conduct research to identify labour market needs, understand skills
from USD 7018 m to USD 6980m in 2015
gaps and develop strategies to meet the needs of such labour
whereas due to exchange rate depreciation
markets. While catering to these needs, developing administrative
foreign exchange, remittances grew from plans in such markets would be a major challenge. Another
Rs. 916,344m to Rs. 948,957. Although challenge would be to adequately develop human capital in
remittances received from the Middle East, sufficient quantities to meet the needs in the local and foreign
European Union and other European labour markets, especially in professional, skilled and semi-skilled
countries declined, remittances received categories.
from Far East Asia and South East Asia
The entire system for dealing with foreign employment needs to be
increased during the same period.
revamped and the summit revealed that skill development will be
an important part of this. Sri Lanka needs to upgrade the skills of the
existing workforce in line with the destination markets. At present, a
significant population of labour migrants is into jobs that are in the lower end of the value chain, indicating scope for
growth in this sector if the focus is expanded to higher value jobs.
Going forward, training will need to be provided to upskill the Way forward:
current workforce in alignment with global standards. The training
 Engage diaspora effectively for migration of
for all workers about to depart for foreign employment can also workforce
include reinforcement of Sri Lanka's core cultural values. This will
 Introduce stronger migration policies
help to reinforce Sri Lanka's brand in the global space and possibly
 Reinforce the brand of the nation by training
gain a competitive advantage.
the export labour on the core culture
The foreign employment sector can also be strengthened by attributes. This will help in creating a
engaging new population groups such as diaspora to participate in competitive advantage

foreign employment. In addition to these, the government will  Take measures to enhance the safety and
need to build the trust of its people by introducing stronger security of the migrating workforce

migration policies and take measures to enhance the safety and  Improve skills of migrating workers to align
security of the migrating workforce. to jobs that are of a higher value

25
Leadership Insights
Structuring National Human Capital Agenda for the Future

The new economy that we are a part of is volatile, uncertain, complex and ambiguous and in order to
survive in the VUCA world it is vital for countries to create competitiveness. Competing in the new
economy requires countries to manage change at three levels – personal, organizational, and national.

Personal competitiveness has three levels. At the first level, the individual leader is expected to exhibit
personal skills and authenticity. At the second level, they must be able to help others in their team or
within the organization. The third level of personal competitiveness involves expanding the horizons
Dave Ulrich
and creating value for people outside the organization.

Organizations also must change to create competitiveness by creating value to customers in original and inimitable
ways. To compete well, organizations must build capabilities in managing finance, strategy, technology and most
importantly create a strong system by focusing on talent, leadership and culture. Talent serves as the foundation, culture
as the system and leadership as the bridge between the two.

National competitiveness is enhanced by creating a national brand for the country, which in turn is created through a
well-articulated vision for the desired future state in 5, 15, or 30 years from now. This national brand is essential for the
talent agenda as it becomes a key element of capability building.

It is also helpful to identify what key challenge the country is facing and to address that in order to improve its
competitiveness. Capability building can also be designed based on what the country intends to offer to the global
market. A heuristic classification of these challenges and so-called “exports” is listed below, by level of economic
maturity

+ = Competing in the
new economy

Ideas Impact

Personal: leadership as value to others

Organization: creating organization capability

National: creating a national leadership brand

National competitiveness: Creating a National leadership brand

Age Key Challenge Export
5 – Knowledge Identify and leverage core knowledge Ideas, e.g., leadership or knowledge
4 – Service Become a service center (e.g., finance, Service hub for an industry
health care, tourism)
3 – Manufacturing Create ability to assemble or manufacture Manufacturing or assembly capabilities
2 – Natural resource Extract natural resources from the ground Natural resources
1 – Agrarian Grow food to feed the people Agriculture products

27
Leadership Insights

Strategy to Action
Outcomes of Panel Discussions

Shifting demographic patterns, the pace of technological change and increasing economic integration and
interdependence of economies across the world will have a significant impact on the workforce of the future. Businesses
today are experiencing breakthroughs faster than ever, lifecycles for innovation are shortening, the east is gradually
becoming the new west and more importantly, innovation and technology are the new fuels disrupting businesses.
New age organizations are leaving behind the traditional models of market access; instead they are creating new
markets and controlling consumer experience like never before. The workforce of today is at the helm of actualizing and
experiencing the new world like never before, be it in the form of digital connectedness, demand for here and now or
changing aspirations from their careers.

With this view, in order to take stock of the future, Sri Lanka will not only need to relook at building skills for the future but
also need to develop a strong eco-system for the workforce, in order to enable high performance.

The Leadership panel debated on the various challenges and opportunities that lie ahead for Sri Lanka in the identified
sectors. Over a series of discussions involving a host of stakeholders and experts, the following broad areas were
identified as focus areas for the Sri Lankan government in terms of job creation and employee experience, along with
other human capital requirements.

The overall quality of education in Sri Lanka's schools and colleges is not yet at par with global
standards, and, having been identified as a key focus area, efforts must be made to raise the bar. These
reformative interventions must target the entire spectrum, not merely focusing on tertiary education.
Early education is a fundamental part of learning, and the nation recognizes the need to ensure higher
enrolment at an early stage. The same rigour then applies to building a high performance school
system with strong learning outcomes, and encouraging entrepreneurship and innovation at an early
Education age through real-world practical projects and assignments. In order to match global skill
requirements, it would help to partner with global universities leverage on latest research and
content.

With the recognition of the importance of embracing technology, efforts must now be made to invest
in it and leverage it to catch up with latest business models. Core focus areas need to be identified
within each sector, so that investments can be appropriately channeled in the most efficient way. The
next step would be to build capability in each of these areas, ensuring targeted skill development.
With effective skill development, technology can become a tool to further build capability, to innovate
Technology and to make education more futuristic.

Skill development, as important as it is for Sri Lanka, must be designed in line with the growth
direction of the sectors. Sector specific competencies need to be identified and these should
determine the development of specific skills.
At a larger level, soft skills must feature in training across sectors to ensure job-readiness, and the entire
infrastructure for vocational training needs to be developed. Finally, it is important to establish the
Capability impact of capability development by clearly communicating the career opportunities and stability
Development that lie ahead in these sectors.

28
 The discussion saw emphasis being laid on the need to encourage initiatives that will bring
government, industries and academia together to solve the human capital issues of the future. This
will ensure that the best of resources from all stakeholders are being combined to produce equally
great results. For instance, industry expertise would be an asset for educational institutions in the
Strategic creation of a course curriculum. However, in order to effectively coordinate these efforts and ensure
smooth functioning of the partnership, it is imperative that roles of each stakeholder as well as
Partnership accountability for different aspects are clearly identified and followed.

With all the different sectors being targeted and several interventions and initiatives being planned,
governance will be the key factor tying all the efforts together ensuring that progress is measured
regularly. Apart from this, the government will need to ensure that the required support is received.
Selective financing of targeted programs and initiatives must be encouraged and prioritized based on
impact and criticality.
Inclusivity and equality must be made a reality and the government will play a crucial role in ensuring
that the workforce becomes more diverse in terms of gender as well as various communities. These
demographic groups should be made to feel welcome in the workforce through an infrastructure that
addresses their needs, and at the same time there should be equal opportunities for all in the society.
Governance
Sri Lanka is strong in its determination to elevate its standards and create a competitive advantage.
The nation must stay perseverant and retain its core in all initiatives and activities. The culture and
heritage of the nation must be reinforced in all sectors to build a workforce that becomes an
ambassador of the country's values and tradition.

Moving Ahead
Improving the quality and relevance of Technical and Vocational Education & Training (TVET):
 Ensure private sector participation in definition/updating of standards, course contents, training of instructors, apprenticeships
opportunities (through sector skills councils)
 Build capacity for labor market analysis and assessment of employers'needs (LMIS)
 Build M&E capacity: monitor performance of training providers and allocate funding based on performance (not on basis of
previous allocations).
 Expand quality control (registration/accreditation) to cover public and private providers
 Try out vouchers schemes/ purchasing of private sector services on pilot basis, evaluate before scaling up. Ensure prior
dissemination of information about performance of centers & job prospects to guide students decisions
 Strengthen coordination between the various relevant Ministries and institutions providing TVET through an Inter-Ministerial
Skill Coordination Committee

Transforming the Higher Education System

Provide Greater access, enhanced quality, more research and innovation to match Upper Middle Income Country standards and fuel
economic growth
 Increase university intake in priority degree programs
 Introduce scholarship schemes for junior academics in priority disciplines; consider appointing international faculty as needed.
(to address the severe faculty shortage)
 Establish an autonomous Quality Assurance and Accreditation Agency for public AND private higher education institutions
 Introduce PPPs to stimulate development of accredited private national and international institutions
 Reform EDPs with (i) focus on labor-market oriented programs; and (ii) pilot schemes such as MOOCs
 Ensure competitive funding of research

In conclusion, Sri Lanka has the potential to become a high income economy through a strategic focus on improving its human
capital. A package of financial investments, policy and governance reforms will make the existing system more efficient and equitable.
A national vision backed by funding, realistic targets and an implementation strategy can help propel this agenda forward.

29
List of Distinguished speakers and panelists at the Conference
Mr Malik J. Fernando
Mr. Marcio Favilla
Dr P V Ramana Murthy,
Mr Ajith Gunawardena
Ms Debbie Cross
Mr William Costley
Mr Grant Healy
Mr Abbas Esufally
Mr Sunil Dissanayake
Expert Panel
Mr Srilal Miththapala
Mr Francis Dilip de Silva
Dr Chandra Embuldeniya
ICT/BPM, Financial Services & Insurance
Mr Rajendra Theagarajah
Mr Bill Lisle, Regional
Mr Tony Weeresinghe
Dr Ramani Gunatilaka
Mr Keith Modder
Mr T K Srirang
Mr Jim McCabe
Mr. Darke M Sani
Mr Mano Sekaram
Mr Eduardo Mercadillo
Expert Panel
Mr Anton Godfrey
Dr Chandra Embuldeniya
Tourism Pillar
Director MJF Holdings/Dilmah Tea
Executive Director, UNWTO
Vice President and Global Head HR, Taj Group
Deputy Chairman, John Keells Holdings
VP, Human Resource, Shangri-La Group
Vice President Operations - South East Asia & India Hilton Worldwide
CEO, Louis T Collection & Ex VP, Hyatt International
Group Director, Hemas Holdings PLC and Chairman, Serendib PLC
Chairman, SL Institute of Tourism & Hotel Management
Tourism Expert
Senior Specialist, Industry Skills Development, ILO
Former Chairman TVEC
CEO/Director, NDB Bank PLC
CEO, AIA Group
Chairman/CEO - Ustocktrade LLC, Co-Founder, The Cainan Foundation,
Founder, Millennium IT & E-Channeling
Development, Welfare, Labour Economist
Executive Vice President, Chief Operating Officer, VirtusaPolaris
Senior GM, Head HRM Group, ICICI Bank
CEO, Standard Chartered Bank Sri Lanka
Group Chief HR Officer, Axiata Group Bhd, Malaysia
CEO/Co-Founder, 99X Technology Ltd. & Chairman, SLASSCOM
Centre Director, HSBC GSC Colombo
Executive Chairman, AGXA Global & AG International; Director,
Colombo Stock Exchange
Former Chairman, TVEC

Ms Tania Polonnowita Wettimuny
Dr Parakrama Dissanayake
Dr Ruanthi De Silva
Mr Romesh David
Mr Zeeshan Mukhi
Ms Kasturi Wilson
Mr Sean Vandort
Mr Jagath Pathirane
Expert Panel
Mr Anton Godfrey
Dr Indika Sigera
Dr. Chandra Embuldeniya
Manufacturing and Construction Pillar
Prof Malik Ranasinghe
Dr Surath Wickramasinghe
Mr Sungsup Ra
Mr Sunil G Wijesinha
Prof. Dr. Markus Boehner
Mr Timmy YAK WAN
Mr Christopher Joshua
Mr Ranil Pathirane
Mr Ranjit Pandithage
Mr Raja Nanayakkara,
Dr Giovanna Ying Wang
Expert Panel
Mr Noman Lutfi
Prof Athula Ranasinghe
Dr. Chandra Embuldeniya
Logistics & maritime
Chairperson, Sri Lanka Logistics & Freight Forwarders Association
Director Aitken Spence PLC, Chairman/CEO of Aitken Spence Maritime,
Logistics & Cargo
Founder / CEO, SCM PLUS (Pvt) Ltd
President Transportation Group, JKH PLC
Country Manager, Maersk Line Sri Lanka
MD, Logistics & Maritime/MD Pharmaceuticals, Hemas Group
Chairman, Sri Lanka Shippers’ Council
CEO, Expolanka Freight Pvt Ltd
Executive Chairman, AGXA Global & AG International; Director,
Colombo Stock Exchange
Department of Transport and Logistics Management,
Faculty of Engineering University of Moratuwa
Former Chairman TVEC
Former Vice Chancellor, University of Moratuwa
President of Chamber of Construction Industry, Sri Lanka (CCI)
South Asia Director, Human &Social Development
Chairman, United Motors/Watawala Plantations/ RIL Property (Pvt) Ltd
Advisor to the Ministry of Skills Development & Vocational Training
Associate Director- HR Esquel Group
MD, Access Engineering PLC
Director Hirdaramani Group
Chairman/MD/CEO, DIMO Group
Chairman/MD, NEM Construction (Pvt) Ltd
Head of HR, CHEC Port City Colombo (Pvt) Ltd
Supply Chain Director, Unilever Sri Lanka
Dean, Faculty of Arts, University of Colombo
Former Chairman TVEC

Mr Kanishka Weerasinghe
Ms. Myrna Clara B. Asuncion
Mr. Gabriel
Ms. Padmini Ratnayake
Mr. Shabarinath Nair
Mr F Mackeen
Mr Don Susantha Katugampola
Mr Gotabaya Dasanayake
Dr Suresh Marcandan
Expert panel:
Dr. Priyanga Dunushinghe
Dr. Chandra Embuldeniya
Prof Dave Ulrich
Dr Harsha Aturupane,
Hon Minister Mahinda Samarasinghe
Mr. Sandeep Chaudhary
Mr Dinesh Weerakkody
Dr Amit Dar
Mr Sungsup Ra
Mr. Marcio Favilla
Mr Bill Lisle
Mr Carl Cruz
Mr Tony Weeresinghe
Mr Rajendra Theagarajah
Ms Shiromal Cooray
Expert panel:
Prof. Dr. Boehner
Dr Ruanthi De Silva,
Dr Surath Wickramasinghe
Mr Kanishka Weerasinghe
Prof Lakshman R Watawala
Foreign Employment
DG/CEO, The Employers’ Federation of Ceylon
Assistant Director Social Development Staff
National Economic and Development Authority, ADB, Philippine
Senior Skills Specialist ILO,
Advisor, Ministry of Foreign Employment
Regional Advisor for Migration and Development,
South and South-East Asia.
Immediate Past President, Association of Licensed
Foreign Employment Agencies (ALFEA)
Barrister & Solicitor Accredited Immigration Law Specialist
Former ILO Employer Specialist, Director General, EFC
Managing Director, People Power International Sdn Bhd, Malaysia
Director - Career Guidance Unit- Faculty of Arts - University of Colombo
Former Chairman TVEC
Leadership Panel
Rensis Likert Professor of Business, University of Michigan
Lead Education Specialist for SL, Maldives, South Asia, World Bank
Ministry of Skills Development & Vocational Training
"COE, Aon Hewitt, India"
Chairman, National Human Resources Development Council of Sri Lanka
Director, Strategy and Operations, Human Development
ADB SA Director, H&SD
Executive Director, UNWTO
Regional CEO, AIA Group
Chairman, Unilever Sri Lanka
Chairman/CEO - Ustocktrade LLC, Co-Founder,
The Cainan Foundation, Founder, Millennium IT & E-Channeling
Deputy Chair, Ceylon Chamber of Commerce
Chairperson, Sri Lanka Institute of Directors
Advisor, Ministry of Skills Development & Vocational Training
Founder / CEO, SCM PLUS (Pvt) Ltd
President, Chamber of Construction Industry, Sri Lanka
DG/CEO, The Employers’ Federation of Ceylon
President, Institute of Certified Management Accountants Sri Lanka
32
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