SMEs as engines of growth | Sunday Observer
Sri Lanka, a start-up nation?

SMEs as engines of growth

24 January, 2021

George Bernard Shaw said,” If you have an apple and I have an apple, we exchange apples, then you and I will still have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”

This is the simple example on exchange of knowledge and experiences which is a prerequisite for innovation and start-up concepts. This simple example gives a deep and expanded meaning which extends to start-up companies - SME’s at an improved stage.

While innovation is in principle generates unlimited resources and one that spreads on its own, every company wants to obtain the maximum benefit from this process. The world’s major companies learnt long ago that the simplest way to derive from benefits from Israel innovations is to buy Israel start-up companies and Israel R and D centres.

In the past, Sri Lankan society was not used to the concept/practice of knowledge sharing with the rest of the world passing it to his/her generations to come which is known as keeping Guru Mustiya - knowledge shared with the offspring’s down to generations. Valuable traditional knowledge on Ayurveda is confined to families for generations for thousands of years without being shared and publicised. Fortunately, this practice is fast changing with the practice of sharing knowledge on seminars, webinars, publications, discussions due to modern trends - corona debacle and change of attitudes due to practices and influence on education.

Innovation and exchange of ideas

Start-up companies and SME’s are thriving on innovation and exchange of ideas subsequently shared with visionaries to carry forward for the good of others and improvement of knowledge based explorations. Developments of Israel, Hong Kong, Singapore, Malaysia, Dubai and South Korea are small countries blessed with visionaries for taking the nations to the highest positions.

Our topic of discussion is only small nations leaving the major powers on their achievements, imaginations and strategies. ‘David ‘Ben-Gurion’’ - father and visionary of Israel once said on imagination, ‘’experts on what it was. There is no expert on what will be. To become an expert on the future vision must replace experience. Memory deals with familiar things. Imagination deals with unknown and can be frightening. It requires risking a departure from the familiar.”

He and the committed leaders being the creators – founders of Israel imagined for the future of Israel to be what it is from nothing and no resources whatsoever with only human resources. Lee Kuan Yew, the nation’s founding father and the visionary for Singapore - which was once a tiny barren island made what it is today with imagination and hard work again with no resources whatsoever but the human resources, imaginations and strategies.

He transformed the underdeveloped tiny island to be leading developed nations with a country of highest per capita in the world. Vision for Dubai was from the Visionary Rashid bin Seed Al Maktoumof Dubai, who made the largest man-made port at Jabal Ali, who realised that five percent oil was drying and transformed the baron sand land on the geographical situation with imagination to be what it is today to be a tourist paradise, business and naval hub and a tax haven, with basic concepts on start-up imaginations and strategies.

Finest business model

A start-up company or a project is initiated by an entrepreneur so that it could be efficiently developed and undertakenas the finest business model to serve the nation it is based on.

An innovator is a person or a few with original initiatives, ideas and plans of action based on scientific, economic, technical and other excellence acquired with a vision for him and the nation surrounded by innovations and SMEs in developing environments.

It is not easy for an innovator to develop an innovation in isolation. Surroundings and atmosphere should be conducive.

State assistance and encouragement is paramount. In small or big developed countries have infrastructure and willingness to help innovators and entrepreneurs to take their ideas forward. In Israel, innovators are encouraged and backed by the Government and the others in the field by making use of the innovations by purchasing their projects or encouraging them when the products are of the highest quality.

In Israel, a local party or a company in the USA/China will purchase the idea and the company as a whole at the market price as generally the products are of high quality. They maintain world standards with close links with USA and past experiences with Israel. Start-up companies and SMEs are thriving on innovations. Ideas and the impact are shared with the visionaries to carry forward for the good of others and impart of knowledge and experience.

An entrepreneur is a person with great innovative ideas which lead on economic growth. Small and medium companies and entrepreneurship rises as ‘’engine of economic growth’’. An entrepreneur is an innovator,initiating a novel business product or industry providing employment or generating income. The entrepreneur identifies the need for creating business that does things differently in the most novel and modern way catalysing the entrepreneur environment and education.

Social compulsion is a valuable factor. Why do innovators and entrepreneurs mostly emerge in certain countries and surroundings? It is the leadership vision. Israel is the best model followed by Singapore, Hong Kong and Malaysia. The USA, Europe and China use start-ups and SMEs as engines of growth.

Bill Gates

Bill Gates is one of the richest on Earth, who started as a small entrepreneur and today with estimated income of US $ 97 billion. Many are leapfrogging to be Bill Gates in many countries with the visions and visionary leaders. Most successful entrepreneurs have humble beginnings, imaginations, visions and untiring efforts with aims within the parameters. In Israel, due to security situation and enemies around,they had to leapfrog over neighbours and compelled to work improving their telecommunication, information technology practices creating highest number of Nobel Prize winners!

Wishful thinking or reality

Sri Lanka is fast emerging as a start-up nation with young Information Technology (IT) educated university products and those exposed to the world of IT via multinational companies in the country and abroad.

With Mobile penetration and the network of the communicating centres, Sri Lankans with a good knowledge of IT appear to be aiming high wanting little bit of English educating themselves to leapfrog for unknown targets swimming in the dark wanting to swim during daylight for the new destinations in the IT world open for endless prospects needing assistance and directions by the state.

Not many start-ups are in Sri Lanka as in Israel or other small vibrant developed smart nations manned generally by the young with engagement and participation of mature hands.

In Israel, start-ups and SMEs are backed by the State with the system of entrepreneurship and productivity society with every other citizen is an innovator out of compulsion in a society with highest concentration of graduates (40 percent)of the population being young, not demanding Government employment as in Sri Lanka.

They prefer to be entrepreneurs or start up originators- not demanding assistance from the State for jobs. Israel has the highest start-ups 6,000 ever growing in the world proportional to the population of the country of 7.1 million.

Almost half the world’s technological companies have bought start-ups or opened research an innovations on small timers in Israel and other small nations.

Israel has got the trend and practice which is not rocket science to them living in an atmosphere of innovations in every corner with facilities to share knowledge and experience. One other reason for success on technology is the restrictions of movement with enemies right round and compelled to do business with outside, leapfrogging and bypassing the Middle-East neighbours.

Two Ministries

Due to corona debacle, IT educated Sri Lankan youth will have an ideal opportunity to meet new IT challenges. Some 70 years ago, Israel had been a barren land with no water. They worked harder to transform agriculture to be scientific with 95 percent technology and the remaining five percent agriculture with scientific backgrounds. They became world leaders and advisors on water and agriculture to the world with scientific knowledge and innovations.

Kibbuths – which are incubators of success of communes/clusters of industries and agriculture of innovations became breeding grounds of potential developers and scientists, including President Shimon Peres- the celebrated former leader of Israel - a product of a Kibbuths, an ideal model to be followed in Sri Lanka. It saves land and considers most scientific and successful communes on agriculture, Industry Innovations and development.

Due to hard work and being hard and successful businessmen, Israelis have been pushed and chased away from many countries for 2000 years until they settle down in the most hostile barren land with no water.

They transformed the country to a world power with hard work creating a start-up nation. Today, the world is open with unlimited borders or restrictions for prospective entrepreneurs with new ideas.

The Justice Ministry has taken steps to hear cases on net/skype and send electronic messages and communicate with the litigants on email, WhatsApp and transferring files via the Internet.

It is a good news that two Non-cabinet Ministries have been set up on start-up entrepreneurship and innovations. The new two ministries should take Israel as a model. Two ministries do not appear to be still active expecting to set up infrastructure and guidelines. It requires a comparative study. We suggest them to visit Israel and Singapore initially with IT experts as Israel is now named a start-up nation due to activism on the subject and the abundance of start-ups. It is now a developed nuclear nation.


Today, innovations are a part and parcel of developments acting directly as a catalyst in reaching the targets of developments in all sectors generally with the assistance of the UN and friendly members of the globe with advanced knowledge and experiences in main areas of development. For example, though Israel is a small nation, she helps the USA, India, China and many others with their newly acquired knowledge and innovations and infrastructure on developments on education and other comportments in life with minimum time frame.

The underline factor for success on development is how and to what extent the challenges of the counter forces and the rate of innovations and plans of developments by innovators, entrepreneurs, start-ups, SMEs and the private sector combined. With the advancement of telecom and communication skills, in Singapore, a start-up company could be established in an hour with US $ 180 and 30 percent such start-ups are with foreign hands.

In Dubai, 99.2 percent businesses are SMEs serving 47 percent of the population tried and tested by young entrepreneurs developing a unique model. In the UK, 99.9 percent business dealings are six million SMEs and 16.8 million start-ups, Israel has 6,000 SMEs. It shows the use and penetration of start-ups and SMEs round the world. We have close and cordial relations with Israel. It is time to make it a partner in developing start-ups and SMEs with the world trends and the world network. Let us wish our dream of transforming Sri Lanka to be a start-up nation be a reality soon.

(The writer is President’s Counsel, former Ambassador to UAE and Israel, President of the Ambassadors’ Forum, former Chairman, Consumer Affairs Authority.)