Governments across the world have recognised the importance of state intervention to encourage private sector innovation towards strengthening entrepreneurship to capitalise on comparative and competitive advantages. The main pillar of entrepreneurship is innovation although most of the new products and unique services are eventually seen through brands.
The majority of the Sri Lankan population, that is around 75 percent, is still living in rural areas. Small industries are the primary players in these areas, and they are directly contributing to large industries that are catering to local and export markets. Therefore, it is important to encourage the entrepreneurs mostly in rural areas who could turn their innovative ideas into a real business from small-scale to medium or large enterprises.
As per the 2018 annual report of the Finance Ministry, there are 230,000 entrepreneurs, which is recorded as 2.8 percent of the total workforce operating in Sri Lanka. If we take examples from Vietnam and Thailand, the indexes are 19.6 percent and 27.5 percent respectively. Bangladesh records 11.6 percent and China 7.5 percent as countries with high densities. This shows the seriousness of the issue that needs to be addressed in Sri Lanka without further delay.
Sri Lanka faces major challenges in the development of entrepreneurship in a pragmatic sense due to the lack of entrepreneurial knowledge and mindset, fear to failure, poor finance handling and lack of knowledge, lack of management skills, training and development, labour and raw material availability, and ability to undertake minor feasibility studies to start a business, as well as technology issues and lack of state-sponsored institutional support.
Among these prerequisites, one essential element is education. Entrepreneurial education is the main pillar of entrepreneurship development in Sri Lanka.
Entrepreneurship should begin with practical education with awareness through creativity and innovation at primary, secondary, tertiary and university education. The focus of the education of the country must be to create entrepreneurs rather than making employees (intrapreneurs) for organizations.
First, it is necessary to change the mindset of the rural youth to empower them that the ‘sky is the limit’ if one’s business succeeds after exploring and working on ideas with calculated risks. In this regard, entrepreneurial education plays a key role which encompasses entrepreneurial education on idea generation, preparation of business plans, and utilizing credit facilities. The education should also include the services entailed in bank portfolios which support entrepreneurs to avoid risks in their ventures.
The government should promote, facilitate and support entrepreneurship development through entrepreneurial education and build capacities in schools, universities, and technical and vocational training institutions by focusing on youth and women with training and skills development on entrepreneurship.
The Higher Education Ministry, Education Ministry and Skills Development and Vocational Training Ministry, Science and Technology Ministry and Agriculture Ministry have a responsible role to play in this regard through the implementation agencies such as the National Enterprise Development Authority (NEDA), Industrial Development Board (IDB) and Small Enterprise Development (SED) and Industrial Technology Institute (ITI).
We must commend the initiative taken by the Education Ministry and Skills Development and Vocational Training Ministry for the introduction of vocational modules to continue in schools as an alternative at the Advanced Level. However, the respective institutions have already faced difficulties when implementing this scheme. This needs to be attended to as early as possible.
There are local universities conducting entrepreneurial development programmes. Entrepreneurial education seeks to provide students or existing entrepreneurs with the knowledge, skills and motivation to encourage entrepreneurial success in a variety of settings.
Entrepreneurship is now accepted as a core concentration or major area of study in both graduate and undergraduate levels in many local universities. The Sri Jayewardenepura University has established a Small and Medium Enterprise Development Support Unit (SMEDSU) under the Entrepreneurship Department to provide academic programmes to develop the entrepreneurial knowledge, skills and attitudes of potential entrepreneurs.
At present, the SMEDSU is conducting certificate level, diploma level, advanced diploma level, and the master’s degree programmes.
Apart from this, there are foreign universities, institutions and governments of foreign countries expressing their support to develop entrepreneurial skills in Sri Lanka. We can learn from their existing education systems and previous experiences to develop entrepreneurship in Sri Lanka. There are organisations which grant donations and consultancies to develop an entrepreneurial culture in countries and these opportunities must be grabbed.
With strengthened education and successful emergence of entrepreneurs, there will be a shift towards project-based lending over collateral-based lending giving more priority to R&D functions in financial institutions. Therefore, entrepreneurial education can be harmonised with SME education which would mean more innovative and creative thinking. That will be infused into the system for the future.
Therefore, Sri Lanka needs more entrepreneurial education at various stages to make a positive contribution to the economy through SME schemes. For this purpose, measures beyond financial assistances and soft loans are suggested towards education, thus effectively confronting today’s sustainable needs where lifestyles are rapidly changing.
The closest model Sri Lanka could apply would be Bangladesh, while the methodologies adapted
by developed countries such as Japan and Germany helped these countries together with
industrialisation. If one studies the entrepreneurship index in Bangladesh, it reveals many
strategies they had deployed at state and private levels to bring the country to where it is today.
(The writer is an MBA Alumni of Sri Jayewardenepura University, Assistant Manager-NSBM Green University Town and a researcher in entrepreneurship development. Email: [email protected].)