The National Enterprise Development Authority (NEDA) recently revealed that only 3% of Sri Lanka’s current working population engages in entrepreneurship. NEDA Director Dhanuka Liyanagamage described this figure as “pathetic” when compared to Sri Lanka’s regional peers at the launch of Global Entrepreneurship Week 2024 at the Chamber of Commerce. Liyanagamage noted a gradual shift in the country’s perspective towards entrepreneurship, especially after the economic crisis of 2022.
“Parents in Sri Lanka encourage their children to pursue higher education, but rarely do they encourage them to pursue entrepreneurship,” he said. He added, “We are still very low; only 3 percent of the working population become entrepreneurs in Sri Lanka. This is a pathetic number compared to our regional peers.
We need to increase this figure to at least 10 percent within the next 3-5 years.”
Liyanagamage also mentioned bureaucratic red tape as a significant challenge for local businesses and expressed optimism that the new administration would help streamline these processes.
Low entrepreneurship rates in Sri Lanka
He pointed out that while several public institutions are established to support entrepreneurs in Sri Lanka, the decentralized nature of these institutions leads to a lack of coordination and repeated efforts.
“There are about 50 government agencies established to support entrepreneurs. But we have to accept the fact that we sometimes work as rival organizations, intentionally or unintentionally,” Liyanagamage said. He emphasized the need for a paradigm shift in the mindset of entrepreneurs, noting that while Sri Lanka boasts a high literacy rate, financial literacy remains low among small and medium enterprise (SME) owners.
This gap leads to challenges, including limited access to finance and difficulties with business registration and regulatory processes. “Entrepreneurship has become a popular concept, even among donors who now are increasingly directing their grants to support the sector. This is a positive development and something to be appreciated,” he asserted.
