According to MTI Consulting, Sri Lanka is facing a ‘Perfect Storm’, a concurrence of multiple socio-economic challenges that has dealt an unprecedented blow to the country. “This is also a great opportunity to dismantle incremental legacy strategies. Instead, go ‘Ground Zero’ and approach it as building an entirely new economic model,” said Hilmy Cader, CEO of MTI Consulting. Inspiration could be taken from Winston Churchill who said, “Never let a good crisis go to waste”.
MTI Consulting opines that Hyderabad (the capital of Telangana State in India) can provide Sri Lanka learnings, as the Country embarks on the challenging tasks of turning around its battered economy. In 1997, when Bill Gates visited Hyderabad, then Chief Minister Chandrababu Naidu convinced him with a strong value proposition that Hyderabad is the place to do business. The following year, Microsoft opened a software development center that started the turnaround of the then Andhra Pradesh (now Telangana) economy. Today, it’s a globally recognized hub for IT , ITES, and pharmaceutical sectors, with exports of US$ 20.05 billion, that has grown at 11.32% CAGR in the last 10 years. At current prices, its gross state domestic product (GSDP) is US$ 167.82 billion, that has grown at a CAGR of 12.3%. The state attracts approx. 83 domestic tourists each year.
“The key learning for Sri Lanka is to have a compelling and competitive value proposition (and of course delivering on it!) and getting some big global tech players to make some serious investments in Sri Lanka. Equally important is to align the human resource development ecosystem to enable the rapid business expansions,” said the CEO of MTI Consulting.
Aggressively enabling ease of doing business and encouraging infrastructure investments have been two ‘Master Strokes’ that has helped Hyderabad to reach its current position. For instance, the TS-iPASS Act (effective 2015) enables any new enterprise in manufacturing or services with an investment of more than Rs 200 crore (SLR 2 billion) to be approved within 15 days and all other proposals will be green-lit in 30 days. If all the approvals do not come through in that period, the company can consider the project deemed to be approved and go ahead with its plans. The officials in charge of the clearances would be penalized Rs 1,000 each for every day of delay!
Based on the State’s success in its core IT, ITES & Pharma, it is attracting other industries to set-up. In 2018, Ikea opened a 400,000-square-foot outlet, attracting 4 million visitors in its first year. Procter & Gamble opened a major manufacturing facility outside Hyderabad. Not content on its economic accomplishments, the State Government rolled out a 10-year Electric Vehicle (EV) policy with the aim to attract US$ 4 billion investments. The policy will aim to make the state a hub for electric vehicles and energy storage systems, and to create employment for 120,000 people through shared mobility, charging infrastructure development, and manufacturing activities (according to IBEF).
For Sri Lanka, Hyderabad provides both an inspiration and learning, only if we keep an open mind and not let our ego get in the way. Of course, policies must be consistent, irrespective of who is in power, which has been the bane of the nation.
MTI Consulting is an internationally networked boutique strategy consultancy – having carried out 680 projects across 51 countries – in the last 25 years. MTI’s practices cover Strategy, Operations, & Corporate Finance. MTI has been at the forefront of thought leadership on strategy, having conceptualized breakthrough models and paradigms that challenges conventional thinking and practices.