STAX sees potential in Jaffna. But can it be realized?


The Sri Lankan IT industry has ambitious goals of producing $5 billion, create 200,000 direct jobs and have 1,000 startups. Currently, the deadline to achieve these goals is by 2022. According to a new report by STAX, which was commissioned by Market Development Facility (MDF), one region that’ll play a key role in achieving these goals is Jaffna.

The reason for this the report states is, “Among the noteworthy attributes, we observe a positive and entrepreneurial attitude among the Jaffna communities, who also retain a strong connection to the Sri Lankan diaspora – which could lead to opportunities for investment and knowledge transfer. The region also maintains a high literacy rate while already possessing the necessary ICT infrastructure and a range of opportunities for IT education.”

The proposed dual hub strategy by STAX

The report calls for Jaffna to adopt a strategy to develop into two different hubs that work in parallel. The first of these would be an outsourcing hub. With a 1000 people, it would carry out relatively low-risk activities. These would result in quick returns in terms of employment, revenue, and teach IT skills. Over time, the hub would scale up to accommodate new opportunities.

The dual hub strategy for Jaffna visualized
The proposed dual hub strategy for Jaffna visualized (Image credits: STAX)

“When considering the implementation of this hub, there are at least three potential avenues through which a Managed Services operation in Jaffna can carve a niche for itself in IT/BPO outsourcing, both globally and island-wide: Quality Assurance, Tamil Call Centres and KPO for Accounting Services,” the report added.

The second one would be a Startup Hub, which would provide returns over a long-term period. This hub itself would be a combination of traditional and creative startups. The former would focus towards digital services such as web development, SEO, etc. The latter would focus on building smart products and solving problems faced by industries in the Northern Province. These include agriculture, farming, fisheries, tourism, and health.

Can this actually be implemented in Jaffna?

Well, that requires the various stakeholders in the private sector and the government to collaborate. According to STAX, the first task that needs to be completed is an evaluation. This would focus on the feasibility of building the Outsourcing Hub in technical and financial terms. And then the necessary capital would have to be secured from investors.

The report goes onto state, “The current challenge is that many such forward-thinking players operate in isolation or do not benefit from adequate access to resources. Through the formal inclusion of these organic activities in a dedicated strategy for Jaffna, the goal is to build momentum and focus in terms of investment and activity being channeled into this space, whether via global or local investors.”

Jaffna | STAX
The Yarl Geek Challenge is an example of an initiative that promotes technology in the Northern Province (Image credits: Yarl IT Hub)

To overcome this, STAX states that universities need to provide industry-ready graduates. Furthermore, IT companies should investigate the viability of setting up operations in the Northern Province. And members of the diaspora should offer more than money but also knowledge. Additionally, startup initiatives active in the Northern Province need to facilitate funding and partnerships for new ideas.

Yet, for this to happen, STAX believes that the government needs to be an active facilitator. It needs to collaborate with external funding agencies, private-sector players, non-profit organizations, and investors. The goal of this collaboration should be to create the necessary infrastructure and provide the incentives needed for others to build a digital hub.

Uki | Jaffna | STAX
Uki is a coding accelerator for underprivileged passionate students in Jaffna (Image credits: Uki)

In recent times, we’ve seen organizations like the Yarl IT Hub and Hatch invest in the Northern Province. They’ve executed initiatives to actually encourage both children and young adults to explore careers in the IT industry. For proof, one only needs to look at Uki. The coding accelerator, which has given opportunities to underprivileged youth in the Northern Province.

But if everyone comes together, especially the government, then it’s likely that the impact of these projects would be multiplied tenfold. To quote Ruwindhu Pieris – Managing Director of STAX, “Global success stories like Malaysia’s Cyberjaya make it clear that digital hubs are the product of a catalytic movement where investors and digital companies grow to a critical mass. For this to happen, all key stakeholders need to come together in a cohesive move. Otherwise, there’s only dispersion.”


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