NEDA’s Initiative to Bridge Research and Entrepreneurship development in Sri Lanka

Mr. Lakshman Abeysekera, the esteemed President/Director General of the National Enterprise Development Authority (NEDA).

Micro, small, and medium-scale enterprises (MSMEs) are crucial drivers of economic growth, serving as the backbone of Sri Lanka’s economy. These enterprises play a pivotal role in fostering job creation and innovation, contributing significantly to the nation’s overall development

An insightful interview was conducted with Mr. Lakshman Abeysekera, the esteemed President/Director General of the National Enterprise Development Authority (NEDA). He is a highly experienced and accomplished professional with decades of expertise. A Chartered Accountant by profession, he has held various prominent roles in the private sector, including several directorial positions. Notably, he is a former Chairman of both the Sanasa Development Bank and the Rubber Research Board. He shared his perspectives on the key initiatives spearheaded by NEDA, emphasizing the organization’s commitment to fostering entrepreneurship and supporting the growth of small and medium enterprises (SMEs) in Sri Lanka.

The contribution of micro, small & medium scale enterprises towards the overall economy of Sri Lanka

In Sri Lanka’s economy, the Small and Medium Enterprises (SME) sector contributes approximately 52% to the Gross Domestic Product (GDP). Furthermore, this sector plays a pivotal role in job creation, providing about 45% of employment opportunities across the country. Notably, 26% of employment within the agriculture sector is derived from small and medium-scale businesses. SMEs are also integral to industries such as rubber, tea, and coconut, demonstrating their widespread impact. Given these contributions, micro, small, and medium-scale businesses are key drivers of Sri Lanka’s economic growth.

Currently, 90% of the registered businesses in the country fall under the micro category, representing the majority of entrepreneurs. A significant challenge the nation faces is increasing exports to US$ 36.5 billion. To achieve this goal, both government ministries and private enterprises are working collaboratively. In line with this effort, the Ministry of Industries has been restructured into the Ministry of Industries and Enterprise Development. Under the leadership of the Deputy Minister, several key institutions—including the Export Development Board, the Industrial Development Board (IDB), the Sri Lanka Export Credit Insurance Corporation (SED), and the Productivity Center—are now unified under this ministry, working together to enhance productivity and support export growth.

New Government Policy Decisions on State Intervention for Enterprise Development in Sri Lanka

During an ADVOCATA Conference, it was highlighted that a mere 1,000 families play a significant role in managing Sri Lanka’s economy. Of these, approximately 475 companies are engaged in exports, representing a small fraction of the overall business landscape. The President also emphasized that a limited number of individuals, primarily located in the Western Province, are controlling the nation’s economic activities, with few extending their influence to other regions.

In response to this, the government’s policy focuses on decentralizing the economy, aiming to extend economic opportunities to rural areas and empower local communities. The key objective is to revitalize the economic landscape in the villages, ensuring that economic benefits are distributed more widely across the country. This includes efforts to stimulate local economies and promote export opportunities from rural areas, thereby fostering a more inclusive and balanced economic growth.

The role of National Enterprise Development Authority (NEDA) under new government policies

With the vision set forth by the new government, along with the leadership of the Minister and Deputy Minister, the National Enterprise Development Authority (NEDA) is committed to fostering economic growth by supporting entrepreneurs at every stage of the business life cycle. The government has emphasized the need for a unified approach to tap into the potential $36 billion market, ensuring that institutions work collaboratively to achieve this goal. NEDA, in partnership with the Small Enterprise Development (SED) division, has been instrumental in nurturing village-level entrepreneurs, transforming their businesses into industries, and facilitating their entry into larger markets. These enterprises are then supported by institutions such as the Industrial Development Board (IDB) and the Export Development Board (EDB) to expand their reach into global markets.

In a recent address in Matara, the Minister announced that the Regional Development Bank (RDB) has approved a program aimed at creating 15,000 new entrepreneurs in the district. This initiative highlights the growing collaboration between NEDA and financial institutions, with both public and private sector banks—including Bank of Ceylon (BOC), People’s Bank, and others—playing a pivotal role in supporting entrepreneurship and economic development. By fostering strong partnerships and providing structured support, NEDA continues to drive national enterprise development, ensuring that local entrepreneurs can scale their businesses and contribute to the country’s economic progress.  

NEDA’s Initiative to Bridge Research and Entrepreneurship development in Sri Lanka

Under the leadership of the Presidential Adviser on Research Development, Professor Gomika, the government is focusing on integrating research into entrepreneurship. Various institutions, including HARTI, universities, research institutes, and even local communities, conduct valuable research, but the challenge lies in centralizing these efforts, advancing them through incubation, and scaling them for commercial success.

To address this, the National Enterprise Development Authority (NEDA) is actively collaborating with universities to transition research projects into viable business ventures. A pilot project with Wayamba University, in partnership with the private sector, has already yielded promising results. This initiative utilizes local resources, production capabilities, and technological support from universities and research institutions to develop region-specific products. NEDA now plans to expand this model to other universities across the country. In addition to fostering research-driven entrepreneurship, NEDA recognizes the growing role of the IT sector in Sri Lanka’s business landscape. Many IT professionals are venturing into entrepreneurship but face challenges in securing dedicated workspaces. To support them, NEDA aims to establish public co-working facilities nationwide, enabling IT startups to operate efficiently. Furthermore, many small businesses struggle to afford land and factory construction, which hampers their growth. To mitigate this, NEDA plans to develop shared facilities and cluster-based industrial zones, allowing startups to access necessary infrastructure without heavy financial burdens. By integrating research with business incubation and providing essential resources, NEDA is shaping Sri Lanka’s entrepreneurial ecosystem, ensuring that innovation translates into sustainable economic growth.

“smeconnect.lk: A Centralized Platform for Entrepreneurial Growth across Sri Lanka”

The Ministry of Industries and Enterprise Development is taking a significant step towards streamlining data collection and business registration by developing a national database to consolidate information on all registered organizations and village-level businesses. This initiative aims to create a comprehensive national data system that will enhance policy-making and resource allocation for entrepreneurs. A key component of this initiative is smeconnect.lk, a digital platform designed to gather data on micro, small, and medium-scale enterprises (SMEs). The Asian Development Bank (ADB) has facilitated the development of this platform, which is now being integrated into the National Enterprise Development Authority (NEDA) framework.

Beyond data collection, smeconnect.lk offers three core services: learning, mentoring, and networking. Entrepreneurs can access educational resources, connect with industry mentors, and build networks to enhance business growth. The long-term vision is to expand this platform into a fully functional SME database, serving as a central hub for entrepreneurs nationwide. Additionally, the platform will play a vital role in business registration and referrals. When an individual registers a business with a government agency, smeconnect.lk will facilitate the referral process to relevant institutions, ensuring smoother access to necessary support services. By integrating digital solutions into the entrepreneurial ecosystem, smeconnect.lk is set to transform how SMEs operate, providing them with the tools and connections needed for sustainable growth.

Strengthening Financial Access for Entrepreneurs Through the Credit Guarantee Institution

A major challenge for entrepreneurs is securing funding to start or expand their businesses. Traditionally, obtaining a loan requires mortgaging an asset, which many small business owners find difficult. To address this, the National Enterprise Development Authority (NEDA) is working to establish a comprehensive financial ecosystem that simplifies access to capital. Entrepreneurs who register with NEDA and utilize its services can be referred to partner banks such as the Regional Development Bank (RDB) and Bank of Ceylon (BOC). Currently, these banks offer unsecured loans of up to LKR 500,000, with plans to increase this amount to LKR 1.5 to 2 million.

Recognizing the importance of expanding financial support, the Minister recently announced in Matara that a reserve of LKR 5 billion has been allocated to further develop this initiative. However, a key concern remains—banks must manage risk carefully, as they operate using depositors’ funds. This is where the Credit Guarantee Institution plays a crucial role. With 90% government ownership and 10% shared among banks, along with support from the Asian Development Bank (ADB), this institution helps reduce lending risks for banks. If a loan is provided without collateral, the Credit Guarantee Institution covers up to 60% of the risk, making it easier for banks to extend financial support to entrepreneurs. By integrating NEDA’s referral system with bank funding and credit guarantees, this initiative ensures that entrepreneurs can access financial resources with reduced barriers, driving business growth and economic development

NEDA’s view and the service for boosting Entrepreneurship in Sri Lanka with a Focus on Women Empowerment

Compared to other countries, Sri Lanka has a relatively low employment rate, with entrepreneurs making up only 2.8% of the total population. Experts emphasize that this figure needs to increase to at least 10% to drive economic growth and job creation. A key focus of this effort is empowering women entrepreneurs. Studies show that women demonstrate high financial responsibility, as they are more likely to repay loans on time. Recognizing this, NEDA, in collaboration with financial institutions, has launched special loan schemes exclusively for women. The Bank of Ceylon (BOC) has introduced a LKR 125 million loan scheme dedicated to supporting female entrepreneurs, enabling them to start and expand their businesses. By expanding access to financial resources and encouraging more women to engage in entrepreneurship, Sri Lanka aims to strengthen its economy and create a more inclusive business environment.

University Students’ Perception of Entrepreneurship: A Changing Mindset

The attitude of university students towards entrepreneurship is rapidly evolving, with many recognizing business as a viable career path rather than just an alternative to traditional employment. This shift is particularly visible among young individuals who are leveraging their skills, creativity, and technology to launch successful ventures. A recent example of this entrepreneurial spirit was observed at the Edex Exhibition at BMICH, where students pursuing arts degrees were seen selling their handmade artwork. A discussion with several participants revealed inspiring stories—one student who initially hand-painted logos on t-shirts has now expanded his business, earning foreign income by exporting his products. Another student in the IT sector is working on a business project with the goal of reaching a billion-dollar valuation, though he currently seeks an investment of LKR 150 million to scale it further.

Entrepreneurship among students is not limited to any single sector. Women and youth are actively engaged in various industries, including technology-driven agriculture. Many students and professionals are embracing modern agricultural techniques, integrating technology and innovation into farming. Mr. Lakshman Abeysekera said that, “HARTI (Hector Kobbekaduwa Agrarian Research and Training Institute) has stated that with an investment of LKR 1.3 million, technology-based agriculture can yield a profitable return within a single season”. This presents opportunities for students to generate additional income or establish full-fledged businesses. This emerging trend demonstrates that Sri Lankan university students are no longer just job seekers—they are becoming job creators. By leveraging their talents, adopting new technologies, and pursuing innovative business ideas, they are reshaping the entrepreneurial landscape of the country. With the right support, investment, and ecosystem, Sri Lanka can cultivate a new generation of successful entrepreneurs who drive economic growth and innovation.

Fostering an Entrepreneurial Culture in Sri Lanka

As the Chairman of the National Enterprise Development Authority (NEDA), an institution established by an Act of Parliament to drive entrepreneurship in Sri Lanka, Mr. Lakshman Abeysekera believes that fostering a strong entrepreneurial mindset is critical to the nation’s progress. However, before addressing entrepreneurs directly, we must first send a powerful message to society—teachers, parents, religious leaders, and the community at large. For decades, our education system and cultural norms have encouraged young people to pursue traditional career paths—to study hard, go to university, and become doctors, engineers, or government employees. While these professions remain important, the future demands a different approach. As Sri Lanka moves towards a digitized economy, traditional job opportunities will become limited. The future workforce must either develop the right skills to thrive in the private sector or global markets—or take the bold step of becoming entrepreneurs. We must shift our mindset from being job seekers to becoming job creators.

To instill this entrepreneurial culture, NEDA, in collaboration with universities and technical colleges, has launched the “Mind into Business” program, designed to inspire and equip aspiring entrepreneurs with the necessary skills and knowledge. Additionally, the government has taken a progressive step by introducing Entrepreneurship as a subject in the Grade 9 curriculum, ensuring that young minds are exposed to business education early on.

Creating a business-driven culture is a collective responsibility. We must embrace entrepreneurship as a respected and viable career path, shaping a generation of leaders, innovators, and job providers who will drive Sri Lanka’s economic growth. The time has come to create a business movement that transforms our nation’s future.

BY – Waruni Jayathunga – Investigator – Hector Kobbekaduwa Agrarian Research and Training Institute