📈 Policy Shift Needed to Scale Sri Lankan SMEs for Global Competition

A strategic pivot from survival-based welfare to export-oriented competitiveness is vital to transform Sri Lanka's small and medium-sized enterprises (SMEs) into drivers of national prosperity. • Structural Challenges & Current Limitations • Current policies focus on welfare, subsidized finance, and domestic survival rather than scaling businesses globally. • Heavy reliance on import protection and para-tariffs has sheltered domestic firms, reducing incentives for innovation and productivity. • Lack of institutional continuity stalls early export milestones (e.g., historical poultry exports to Oman or fresh produce initiatives). • Key Sector & Export Opportunities • Potential exists to move beyond raw supply to foreign buyers by building domestic direct-export capabilities in sectors like agriculture (fruits and vegetables) and poultry. • High-growth opportunities lie in integrating ICT/BPM, digital adoption, artificial intelligence, and automated manufacturing into local production lines. • International Benchmarks & Strategic Action • Global models—such as China's "Little Giants" clusters, India's digital liquidity platforms (ONDC, TreDS), and Singapore's tech roadmaps—demonstrate the value of treating SMEs as strategic assets. • Sri Lanka must leverage economic diplomacy, utilizing embassies to drive export partnerships, attract tech transfers, and build long-term supply chain access rather than relying on brief ceremonial successes.