Haridhu Abeygoonaratne is the Chief Operating Officer of SimCentric Technologies a leading provider of turnkey solutions for military simulation. He brings 20 years of experience in the software development industry.
He is also the Vice Chair of the Sri Lanka Association of Software & Service Companies (SLASSCOM), and a passionate advocate for the Sri Lankan knowledge and innovation sector.
Techie.Lk caught up with Mr. Abeygoonaratne recently to gather his expert insights on the Sri Lankan tech and IT sectors.
Haridhu on Building a Product Nation and Tech Priorities
As a leader within SLASSCOM, what do you believe should be the technology industry’s biggest priority over the next three to five years?
I think our priorities should be upskilling and reskilling the workforce, particularly in areas such as AI, machine learning, and cybersecurity. These are the areas where the global IT industry is moving, so we need to prepare our workforce accordingly.
The second priority is moving Sri Lanka from being predominantly services-oriented toward a more intellectual property-driven industry. We need to focus on creating products and high-value IP that can be licensed globally.
The third element is improving the startup ecosystem. We need more high-value startups.
With Sri Lanka’s digital economy also developing, these areas will play an important role domestically and internationally. While AI may create concerns about job losses, it will also create new opportunities. We need to equip ourselves to remain globally competitive.
How can SLASSCOM help Sri Lankan technology companies move further up the value chain rather than remaining heavily dependent on traditional outsourcing and services?
One way to move up the value chain in the IT industry is by combining software with hardware. These are embedded systems, where both hardware and software are developed and offered together.
For example, you could develop a medical device and build the software that works with it, then license both together. This is how Sri Lankan IT companies can move up the value chain rather than focusing predominantly on software services.
Sri Lanka has produced successful technology companies, but relatively few have scaled into billion-dollar global businesses. What ecosystem changes are necessary to produce more companies of that scale?
A key factor in producing billion-dollar companies is funding. There are changes being discussed around venture capital funds, including potential tax reforms. One of the biggest barriers is the lack of local investment in startups. When international investors look at a startup, they also want to know who has invested locally.
Sri Lanka’s IT export industry is at a transformative point. The industry has grown significantly despite being much younger than traditional export sectors such as tea.
As an industry, we have a target of achieving US$5 billion in export value by 2030, by attracting global capability centers and building products in Sri Lanka. Based on SLASSCOM’s latest data, we have already passed US$2 billion, although Central Bank figures are around US$1.7 to 1.8 billion. The difference is primarily because the Central Bank looks at the money entering the banking system, while SLASSCOM looks at the export value created by the industry.
I don’t have any doubt about Sri Lankan talent. At SimCentric, we build products for global customers, and our competition is international. Our people are globally competitive.
Software engineering also has a major advantage because the skills are globally transferable. A software engineer trained in Sri Lanka can compete internationally without having to obtain country-specific professional certifications.
Sri Lanka’s location is another advantage. Our time zone allows us to work across Australia and New Zealand, Asia, Europe, and North America during different parts of the day. We need to capitalize on that natural advantage.
How important are government policy, taxation, foreign investment and regulatory stability to the future growth of Sri Lanka’s technology sector, and where do you think the biggest gaps remain?
Fundamental tax reforms are needed to support the creation of venture capital funds, not only to support the local IT sector but also to attract investment into the country. Countries such as Singapore have made it easier to establish these funds. Funding-friendly policies could increase startup valuations and help companies scale. Investors should have incentives to invest surplus capital in technology startups and other high-growth companies.
Sri Lanka also needs to offer investors greater ease of doing business and other incentives that make the country attractive for investment. I’m not suggesting that Sri Lanka should be tax-free. Taxes are necessary, but our tax system needs to be globally competitive.
This is also important for retaining talent. If senior executives face significantly higher tax burdens in Sri Lanka than in comparable countries, they may consider relocating. Whether we are talking about policy, taxation, foreign investment, or regulation, the overall environment needs to be globally competitive.
Sri Lanka is often associated with IT services and outsourcing. What needs to change for the country to become better known for creating its own globally competitive technology products and intellectual property?
When building a product, you should solve a global problem rather than a purely domestic Sri Lankan problem. It could be in healthtech, agritech, fintech, medtech, edtech, or logistics, but it needs to address a problem that exists in a global market.
Rather than focusing only on the technology, entrepreneurs should first ask what problem they are trying to solve. There are plenty of global problems and funding available for the right solutions. Technologies such as extended reality (including virtual reality), AI, machine learning, and simulation can then be used to solve those problems.
It is also important to partner with subject matter experts. A technically strong software engineer may not fully understand the problems in a particular industry. Subject matter experts understand those problems and can help technical teams develop the right solutions.
A startup is therefore not a one-person effort. The combination of technical expertise and subject matter expertise is critical.
How is AI changing the simulation and defense technology landscape, and where do you see the biggest opportunities for companies like SimCentric?
At SimCentric, we operate in the defense training space. Our products help defense personnel train and perform better in their respective areas.
Traditionally, defense training involves a theoretical component, a practical component, and then actual deployment. Our simulation products come between theory and practice, allowing personnel to improve their practical skills through simulation.
We are using AI, particularly in data analytics. Based on training data, the simulation can identify areas where a person is lacking and focus more heavily on those areas. Previously, an instructor or leader would have to identify those weaknesses manually. Now, the systems can do that automatically.
One of the biggest opportunities for companies like ours is productivity. AI helps us resolve customer-reported bugs faster, improve customer service, prototype quickly, and get in front of customers sooner for feedback.
Ultimately, this makes training more effective and, in the defense sector, can help save lives.
SimCentric operates in a highly specialized and globally competitive field. How important is long-term investment in R&D for a Sri Lankan technology company trying to compete internationally?
R&D is essential, whether you are in Sri Lanka or elsewhere. Product companies have a product life cycle, so as one product reaches the end of its life cycle, you need to develop new products for the market.
That requires R&D, but it does not mean spending years on a single idea. We should follow the principle of failing fast and moving forward.
For a product company, R&D also involves market research and identifying gaps. You need to understand whether a problem is worth solving and whether there is a customer base for the solution.
If you could reshape Sri Lanka’s technology ecosystem over the next five years, what would you prioritize to create more globally successful technology companies?
I would prioritize upskilling and reskilling, moving up the IT value chain through hardware and software embedded systems, and focusing on product IP.
Startups are also important. I often tell university students to think carefully about their final-year projects. If they identify a global problem and develop a solution rather than focusing only on a Sri Lankan issue, that project could become the foundation for a startup.
That can eventually become a business that scales and is acquired by a larger company. The IT industry is largely about starting companies, scaling them, and eventually exiting.
Can Sri Lanka realistically position itself as a hub for deep-tech, AI and other high-value technology, or should the industry remain focused on areas where we already have an established competitive advantage?
The location where software is developed is less important than whether it solves a problem. The focus should be on solving the problem effectively.
Intellectual property is what will create value for the industry. Whether it is deep tech or another area is less important than whether we are solving a global problem from Sri Lanka.
I believe we have the talent to serve global clients, and our costs are relatively competitive. However, there are challenges around ease of doing business.
For example, when supporting international clients, obtaining visas for business travel can be a challenge. Someone based in Singapore, Australia, or New Zealand may be able to travel to meet a client much more easily than someone based in Sri Lanka.
There is also regulatory red tape. This becomes particularly important when working with hardware and software. For example, importing a VR device can involve significant customs procedures and costs, while someone in Singapore may be able to have the same device delivered directly to their doorstep.
Our policies and regulations need to be globally competitive. We have the talent and know what needs to be done, but some of these regulatory barriers prevent us from being as globally competitive as we could be.