Background paper for the technology initiative for the private sector

This paper provides a background analysis for the project and is based on an examination of five industrial sectors -- light engineering, gems and jewelry, rubber products, food processing, and ceramics. Instead of a traditional institution-building focus, the TIPS project would seek to institutionalize key business practices in the private sector. These practices include: conducting industrial research and development on a systematic and planned basis within firms; providing in-house company training for employees based on training needs assessments and plans; creating a self-sustaining unit designed to meet the information needs of industry; and enhancing and institutionalizing a dialogue between industry and the Sri Lankan government. The gems and jewelry sector has the greatest potential to use technological inputs to increase its export competitiveness and generate employment. Food processing and rubber products follow; both could benefit from biotechnology inputs. Ceramics has a large employment potential and possesses most of the necessary raw materials, but also has large public sector involvement. Finally, light engineering is or could be supportive of most other manufacturing sectors. Given the current security situation, USAID/SL should focus on adapting existing rather than developing new technology, with priority emphasis on providing factory floor technical assistance.