The Blockchain Opportunity
A Bleeding-Edge Response to Sri Lanka’s Economic Woes
I had the opportunity of speaking at a recent panel discussion on the potential blockchain technology holds for Sri Lanka, especially given the current economic context. One of the questions that caught my attention and held it following the session was an unassuming quip on how Sri Lanka could potentially leverage blockchain technology to overcome the economic straits we have found ourselves in.
The question itself isn’t a new one and has been asked many times and answered sufficiently by onlooking technocrats. Sri Lanka has no shortage of brilliant minds, and I have no doubt that the next years will see the emergence of world-class entrepreneurs and businesses backed by blockchain technology. The question however is whether these businesses will continue to be based in Sri Lanka or find themselves scaling in foreign markets with far better infrastructure and readiness.
Web 3.0 and blockchain technology is arguably the most radical, oncoming paradigm shift in the global technology landscape. Projections by analysts account for over $100 billion invested in blockchain and web 3.0 projects by the year 2030, and LinkedIn reported blockchain to be the most in-demand skill for employment in the year 2020. The signs are apparent that we are on the cusp of the next big thing in tech, and the hard question for Sri Lanka and many regional markets is how ready we are to embrace the opportunity.
The web 2.0 opportunity emerged in the late 1990s and boomed through the 2000s. Sri Lanka’s tech industry today is a collective of off-shoring, service, and product engineering companies that took the opportunity head-on and fought through the challenges of defining an emerging industry. The ICT industry of Sri Lanka is poised to generate a modest $3 billion in topline foreign revenue by the year 2024 while generating 200,000 globally competent jobs for Sri Lanka’s youth. However, a simple glance at the digital infrastructure of Sri Lanka’s public services and digital ease of doing business begs the question — how much potential was left unrealized by our unreadiness in terms of administration, governance, and infrastructure? A more poignant question perhaps is how much foreign revenue we left on the table through the late 1990s and early 2000s.
A visit I made to Estonia in the past comes to mind whenever I discuss unrealized potential Sri Lanka holds for domineering the region as a digital service hub. Estonia is today considered the most advanced digital society in the world and is home to a population of 1.3 million. The state also boasts a per capita income of $39,000, a stark contrast to Sri Lanka’s $3,800 which in itself tells most of the story. With over 6,000 technology companies in operation, Estonia’s ICT industry contributes to 10% of the country’s exports which has steadily grown year on year to more than double between 2014 and 2020. ICT also contributes the highest per capita tax income to the state and the highest per capita value added.
If Estonia sounds like a ship that steered a course to avoid every pitfall that Sri Lanka succumbed to, it’s an accurate depiction, and technology has featured heavily in the success story of the country.
Bygones are bygones, and the important question now is what really is the blockchain opportunity and how can we, as a country, as professionals, and as a society drive readiness to create an environment where innovation is fostered and enabled?
The first step in the right direction is arguably to recognize and celebrate the early adopters who have undertaken the risk of venturing into largely uncharted territory and have in their own way emerged successfully. By focusing the right attention in the direction of early adopters, not only will those founders and businesses open new doors, but they will also hold those doors open for a second wave of success stories to find direction.
The natural next step is to recognize opportunities that exist in the industry and align policies and infrastructure that support the founding of start-ups that will fit into those market gaps in scalable ways with a focus on inclusive value generation.
Many of the opportunities that I outlined in my response to the question at the panel discussion were based on my own experience. The true opportunity is without argument much broader and more colorful. For the purpose of finding a place to begin from, the areas that I see yielding great benefit to us economically are as follows.
Blockchain Development & Blockchain as a Service
Sri Lanka is a proven innovation hub for some of the world’s leading organizations. Often, the technology companies operating in Sri Lanka service Fortune 100 blue chips. The local university system has produced award-winning tech talent capable of holding their own and often exceeding their global competition.
It’s an obvious extension for Sri Lanka to begin producing blockchain technology specialists with a view of the rapidly scaling demand in the global market for blockchain technologists. Integration of tools and platforms associated with web 3.0 and blockchain development to our campus curriculums is the first step, and producing talent at scale is the next.
Parallelly, attention should be shifted towards attracting blockchain and web 3.0 startups to Sri Lanka with favorable regulatory policies for setting up operations here and the infrastructure to support their continuity.
With the emergence of blockchain talent in Sri Lanka, the technology companies that currently operate in Sri Lanka will also be able to service clients venturing into the space from Sri Lanka, further catalyzing the fulfillment of the opportunity at scale.
Cryptocurrency Trading, Research & Broadbasing
Cryptocurrency is arguably the most mature use case of blockchain technology at present with the space recording a market capitalization of over $2 trillion at its height. Many immediate opportunities in blockchain technology will inevitably involve cryptocurrency. The first step towards this goal is to provide regulatory clarity for cryptocurrency trading and investments in Sri Lanka, perhaps with the establishment of a regulated exchange and policy framework for banking services based on cryptocurrencies.
Many regional destinations have already made steps in this direction, attracting large crypto exchanges and other crypto-related businesses to set up operations within their borders with a clear declaration of their regulatory environment toward the emerging technology application.
Furthermore, the opportunity also exists to position Sri Lanka as a hub for research and back-end operations related to cryptocurrency trading given our longstanding proficiency in producing financial professionals.
Tokenization, NFTs, Gaming & Digital Art
Non Fungible Tokens (NFTs) are an offshoot use case of blockchain technology that is slowly gathering steam globally with start-ups, celebrities, and corporations exploring their potential for numerous applications. From a Sri Lankan perspective, the opportunity is ripe across a broad spectrum of domains and industries to find applications of tokenization.
From an infrastructural standpoint, NFTs bear great potential to radically transform administrative institutions. Given the immutability and accessibility of NFTs, physical tokens such as land deeds, certificates of authenticity, and licenses can be tokenized on the blockchain with transfers, sales, and expirations managed through smart contract configurations.
Infrastructure and governance aside, blockchain technology also holds great promise for artists to produce their art digitally with verifiable authenticity and make the work available to a global market with opportunities for monetization, accruing royalties, and protection against copyright infringement.
For artists, musicians, cinematographers, and other creative professionals, NFTs are a viable means for putting their work in front of a global marketplace without comprising the ownership of their intellectual property.
Further, NFT gaming is a booming industry that is consistently demanding fresh concepts and developments, another avenue for game developers, animators, and illustrators to showcase their work in a global marketplace.
Fundraising, Crowdsourcing & Social Justice
Given the decentralized nature of web 3.0 and blockchain technology, entrepreneurs, activists, and philanthropists have the opportunity to take their causes to like-minded benefactors across the world with the possibility of accepting investments, donations, and payments seamlessly through cryptocurrency wallets.
Furthermore, the technological underpinning allows entrepreneurs to find global teams with unique skill sets and a presence in target regions. These avenues which didn’t exist in the past for many entrepreneurs are great opportunities for future entrepreneurs to think outside of the box and innovate.
Events, Conventions & Festivals
A core feature of a decentralized iteration of the internet as we know it is a deeply connected community of participants with a strong sense of camaraderie. Increasingly, this sense of community is creating opportunities for events, conventions, and festivals to be held around the world as gathering places for these communities.
The opportunity for tourism underpinned by blockchain and web 3.0 gatherings is increasingly prominent and being capitalized by many regional and global destinations. For Sri Lanka, this is an opportunity to revive the weakened tourism sector and create a niche of travel with high disposable income and potential for continuity.
About Me
I’m an MBA heading Employer Branding globally and Corporate Communication for Europe, the Middle East, and Asia Pacific for a $2Bn technology corporation headquartered in New York, USA.
In my spare time, I research, invest in, and write about cryptocurrency and other emerging trends in marketing and technology domains.
