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Evolution of Offshoring in Sri Lanka: Growing Hub for Global Business

Evolution of Offshoring in Sri Lanka: Growing Hub for Global Business

In the landscape of global business, offshoring has become a strategic approach for companies seeking to optimise operations and reduce costs. Among the nations that have risen to prominence as offshoring destinations, Sri Lanka stands out for its remarkable evolution. This island nation has transformed from being a mere dot on the offshoring map to becoming a significant hub for international businesses. In this blog post, we delve into the journey of offshoring in Sri Lanka, exploring the factors that have contributed to its rise and the opportunities that lie ahead.


Early Beginnings and Government Initiatives


The story of offshoring in Sri Lanka began in the late 20th century, with the government playing a pivotal role in laying the groundwork for a conducive business environment. Recognising the potential of Information Technology and Business Process Outsourcing (BPO) to drive economic growth, the Sri Lankan government implemented policies to attract foreign investment. These included tax incentives, investment in infrastructure, and the establishment of dedicated zones for IT and BPO operations. Such measures not only showcased Sri Lanka's commitment to fostering offshoring but also signalled its readiness to compete on the global stage.


Talent Pool and Educational Focus


A critical factor in Sri Lanka's offshoring evolution has been its rich talent pool. The country boasts the highest literacy rate in South Asia and has a strong education system, with particular emphasis on science, technology, engineering, and maths. Sri Lankan universities and educational institutions have aligned their curriculum with industry needs, producing graduates with the skills required in IT, finance, accounting, and customer service. This focus on education has enabled Sri Lanka to offer a workforce that is not only proficient in technical skills but also adaptable and fluent in English, making it an attractive destination for offshoring.




Growth in IT and BPO Sectors


The IT and BPO sectors in Sri Lanka have seen exponential growth over the past two decades. Companies from around the globe, including the United States, the United Kingdom, and Australia, have established operations in Sri Lanka, drawn by the country's cost-competitive services and skilled workforce. The BPO sector has diversified beyond traditional call centres to include financial services, legal process outsourcing (LPO), and knowledge process outsourcing (KPO), further enhancing Sri Lanka's value proposition for highly skilled professionals.


Challenges and Resilience


Despite its success, Sri Lanka's offshoring journey has not been without challenges, however, the resilience of the Sri Lankan economy and its people have been evident. The country has continued to invest in upgrading its telecommunications and power infrastructure, while the government and private sector have collaborated to promote innovation and entrepreneurship, ensuring that Sri Lanka continues to deliver exceptional business outcomes and remains competitive.

 Challenges and Resilience - Growth - SL


Looking Ahead: Opportunities for Further Growth


As we look to the future, several opportunities exist for Sri Lanka to further cement its position as a leading offshoring destination. These include building on the recognition of being one of the top 10 countries for data science skills and expanding into emerging fields such as artificial intelligence (AI), machine learning, and digital marketing. Additionally, fostering a startup ecosystem and encouraging research and development (R&D) is driving innovation. Moreover, Sri Lanka's strategic location as a gateway between the East and West offers unique advantages for companies looking to serve global markets.




The evolution of offshoring in Sri Lanka is a testament to the country's adaptability, strategic vision, and commitment to excellence. From its early days to its current status as a global offshoring hub, Sri Lanka has demonstrated that it is not just the beauty of its landscapes that captivates but also the potential of its people and the promise of its economy. As the world of business continues to evolve, Sri Lanka is well-positioned to meet the changing demands of offshoring, promising a future of growth, innovation, and continued success.

Contact Dijital Team to learn more about how having a team in Sri Lanka can increase your efficiency and profitability.