In 2005, five years after Mano Sekaram founded software engineering firm 99X Technology in Sri Lanka, he was looking to scale internationally. His firm was at the vanguard of a booming tech industry in the South Asian nation, that continues to outpace expectation today. But Sri Lanka, an island nation of 21 million people and just under $300m total GDP, was too small a market to stay in for too long. Sekaram needed a good fit.
He could have picked London, Silicon Valley, Singapore or another of the tech industry’s key regional hubs. Instead, Sekaram chose Oslo, Norway’s capital city, which has a population of just 634,000 in a country that holds a little over 5m.
It may have seemed an odd choice. But on closer inspection, Sekaram tells Red Herring, there really was no other choice. “If you put all the Scandinavian countries together you haven’t even reached the population of Sri Lanka – they’re small,” he says. “But they are very high-end. So they want somewhere to be incorporated and somewhere that’s a springboard to the Asian market. They want to minimize risk, see how things work.”
Norway has held a significant presence in Sri Lanka for decades. But until the last few years its work has focused on peace-brokering throughout Sri Lanka’s bloody civil war, which raged from 1983 to 2009. IT services have been at the center of rejuvenated economic relations between the two nations – with officials from both seeking partnerships between their domestic companies.
More importantly, says Sekaram, is the fact that 80% of Norway’s economy is comprised of SMEs, to which 99X sells. Those companies want two things Sekaram says his company can provide well: “If you want to be successful in the west you need to have very high quality, and you need to be predictable. It’s quality of design, reliability.
“It’s not necessarily present in most developing economies,” he adds. That might generally be true. But in Sri Lanka times are changing. Technology has risen, in the past 15 years, to become Sri Lanka’s fifth-largest industry, worth around a billion dollars. It is expected to reach $5bn in IT exports by 2022, supporting 100,000 jobs.
Companies like WS02, Microimage and MillenniumIT help power multinational tech firms like eBay, and several stock exchanges worldwide. Sri Lanka’s government has been proactive in promoting entrepreneurship and IT services, launching programs like NBQSA and e-Swabhimani, which “recognizes excellence in digital application creation”.
Kearney ranks Sri Lanka 14th on its Global Services Location Index. Sri Lanka was the first South Asian state to adopt 4G networks in 2013, and the United Nations has placed it first in the region, in terms of e-government services. Tech has “grown tremendously,” says Sekaram. “It has taken our tea industry 150 years to reach a billion dollars in exports. It has taken tech 15 years.
“What has happened is that the entire education system, and graduates, has grown exponentially,” he adds. “Because they believe the knowledge economy is becoming center-stage for Sri Lanka’s evolution. And in that part it is very significant. Countries like Sri Lanka, where you don’t have a big domestic market, you have to look for other avenues for growth.”
Successes like 99X Technology go a long way to enthuse Sri Lankan entrepreneurs to try their hand on the international stage. It has now built more than 150 products in Scandinavia, and has almost doubled its pricing as it has moved up the region’s ecosystem.
“We were the pioneers, to really go and find partners,” says Sekaram, “because our company is not by accident: the strategy is by design, to find an area where we could constantly go up the value chain.
“All western countries want to have an eastern counterpart,” he adds. “What’s important is not just that they’re similar economies but similar lifestyles: they’re small, they’re different.”
99X Technology has managed to increase its footprint while remaining committed to software solutions aimed at small and medium enterprises. It is proving that, just months before Sri Lanka celebrates its 70th year of independence next January, that its entrepreneurs can win big not just locally, but in one of the most quality-driven regions on earth.