Top Economist Warns Current Stability Is Superficial, Urges Bold Shift Toward Entrepreneurship and Technological Advancement
Sri Lanka must abandon its complacency with current economic indicators and instead target a sustained annual growth rate exceeding 8 percent to achieve long-term prosperity, according to former Central Bank Deputy Governor Dr. W. A. Wijewardena. Delivering the keynote address at the CA Sri Lanka Tax Symposium, Dr. Wijewardena emphasized that real economic progress cannot be achieved through nominal stability alone and called for an urgent innovation-driven transformation of the economy.
He warned that a growth rate of around 5 percent may appear moderate on the surface but is effectively “zero growth” for a developing nation like Sri Lanka that needs to catch up. “Anything below 4.5 percent is a negative growth rate for us,” he said, noting that current plans project only a marginal or even negative recovery, which would be insufficient to lift the country out of its low-growth cycle.
According to Dr. Wijewardena, to become a prosperous nation within a single generation, Sri Lanka must consistently achieve a compound growth rate of over 8 percent. This, he argued, can only be realized by shifting from a consumption-driven model to an innovation-led economy that actively empowers entrepreneurs.
He clarified the difference between invention and innovation—where invention refers to the creation of something new, typically by scientists or engineers, and innovation refers to its successful commercialization by entrepreneurs. Using the example of the smartphone, he pointed out that the now-essential Gorilla Glass was an invention, but it was Apple’s Steve Jobs who turned it into a global innovation.
Outlining a four-step roadmap to national prosperity, Dr. Wijewardena proposed that Sri Lanka must: foster domestic inventions, support entrepreneurs in transforming those inventions into innovations, diffuse innovation-related knowledge across all regions, and finally promote imitation and adaptation of successful technologies.
He underscored Sri Lanka’s weak performance in the Global Innovation Index, where the country currently ranks 89th out of 123 nations, calling this a reflection of the nation’s limited innovation capabilities. Criticising the demoralisation of research staff in universities and state institutions, he said Sri Lanka is underutilizing its available human capital.
Dr. Wijewardena also stressed that the government is not suited to lead the innovation revolution and must instead rely on the private sector and entrepreneurs to drive economic renewal. He warned of external shocks—such as tariff revisions and geopolitical tensions—that could hinder Sri Lanka’s recovery if the real economy is not strong enough to withstand them.
Ultimately, he called for a complete shift in mindset, urging policymakers and business leaders to move away from traditional economic approaches and foster a more dynamic, innovation-based economy that can withstand external pressures and deliver lasting growth.