Supply-Side Determinants of Competitiveness

Abstract

This chapter deals with the supply-side determinants of export performance in Sri Lanka since 1977. Given the demand for technology development from the incentive framework, the supply response of industry depends on its access to three major factors: skills of the appropriate types, access to technical information and support to feed into in-house efforts, and financing for physical and other investment. Each of these factors has its own markets. Each may suffer from market failures, and government intervention may have a role to play in remedying them. The issue is whether Sri Lanka, after the reforms, adopted policies to build up its supply-side factors and so achieve industrial upgrading and diversification. Section 6.2 deals with some background data on investment and infrastructure. Section 6.3 considers industrial finance. Sections 6.4 and 6.5 analyse foreign information, local information and technological support. Section 6.6 analyses skills. Section 6.7 summarizes.