BY J.A.A.S. Ranasinghe

26 Feb 2026 |

The shipbuilding sector is vital to the global economy, influencing international trade, transportation, and defense. As global trade and the need for energy-efficient vessels rise, these nations are set to expand their influence. Their success hinges on advanced technology, skilled labour, and a dedication to innovation, keeping them competitive in a fast-paced market.

The US shipbuilding industry requires about 200,000 to 250,000 additional maritime workers in critical occupations, such as welding, fabricating, soldering, and front-line management, to satisfy the demand over the next decade. If the demand for ships increases, the labour gap will be even wider.  

Nations excelling in these areas capture a larger share of the global market. For instance, China has become a dominant force, using Government subsidies and strategic initiatives to increase its capacity. This has lowered production costs and enhanced its global competitiveness. South Korea and Japan have focused on advanced technologies and high-value vessels like liquefied natural gas carriers and cruise ships. Their expertise and reputation for quality have kept them strong in the global market. Japan’s success hinges on the efficiency, quality and specialised vessels.

US Naval and commercial shipbuilding expertise

The US boasts a long-standing tradition in naval and commercial shipbuilding. American shipyards are pivotal in bolstering the nation’s maritime defense and economic vitality. They excel in crafting a diverse range of vessels, from cutting-edge aircraft carriers and submarines to massive commercial ships like tankers and container vessels. Shipbuilding in the US supports around 110,000 jobs nationwide and adds Dollars ($) 37.3 billion to the gross domestic product (GDP) annually. The country boasts 154 private shipyards actively engaged in construction, spread across 29 States and the US Virgin Islands. Moreover, over 300 shipyards focus on repairs, capable of constructing ships, even if not currently doing so.

The US is known for its excellence in naval and commercial shipbuilding. American shipyards are equipped with advanced technology and skilled workforces. They focus on complex projects, such as aircraft carriers, submarines, and large commercial ships like tankers and container vessels. Yet, its dominance over the years has seen a gradual decline, mainly due to the paucity of skilled labour due to massive retirement.

Building the future workforce for US shipbuilding

A veteran chief executive officer of the shipbuilding and repair industry and a former Managing Director of the Colombo Dockyard, Dr. Sarath Obeysekera says  the US is confronted with a huge shortage of skilled labour such as welders, fabricators, pipe fitters, electricians, naval architects, outfitters, and planners. The resultant situation is clear in that the US which enjoyed a five per cent share in global shipbuilding has now plummeted to barely 0.25%.

This scenario creates an uncomfortable truth: the US cannot rebuild the globally competitive shipbuilding industry relying solely on its domestic labour pool in that demographics, skills mismatches and lifestyle expectations make that mathematically improbable. 

Key opportunities for SL

Undoubtedly, the recession of the US shipbuilding industries has opened a myriad of opportunities for Sri Lanka to develop its shipbuilding industry, vocational training (VT) institutes and universities, job opportunities for skilled labour, the generation of foreign exchange, the building of collaboration with the universities and the VT centres, the training of skilled manpower, the revision of training modules, new institutional arrangements, etc. 

The question is whether the proposed remedies — reassessing vocational, maritime and nautical education, creating new maritime academies, and modest private-sector incentives — are anywhere near sufficient.

Strategic export of skilled labour 

The crisis in the US shipbuilding industry has created an extraordinary, time-sensitive demand for skilled maritime and industrial labour. Sri Lanka is uniquely positioned to respond due to its long maritime tradition, English proficiency, and existing vocational infrastructure. However, without State-led coordination, this opportunity will be lost to competing labour-supplying nations. The export of ship engineers, marine engineers, skilled welders, fabricators, ship fitters, marine engineers, and naval architects must be treated as a strategic foreign exchange industry, not an ad-hoc migration exercise. Government-to-Government agreements, led by the Foreign Affairs Ministry, with defined skill categories, certification standards, numbers, and timelines is a key priority area in this direction.

Foreign Affairs Ministry as an economic enabler

The Ministry must move beyond traditional diplomacy and assume the role of an economic and labour-market negotiator. By entering into bilateral memorandums of understanding (MOUs) directly with major US shipyards and the relevant US authorities, Sri Lanka can secure predictable overseas employment pipelines, protect worker rights and wage standards, and align domestic training systems with the international demand. Establishing a high-level private-sector–led advisory board to guide negotiations, skill forecasting, and international benchmarking is again a key priority area.

New institutional arrangement for the VT sector

The Tertiary and Vocational Education Commission (TVEC) currently operates as a regulatory body focused on compliance rather than national manpower planning. This is a fundamental misalignment. With nearly half of Sri Lanka’s youth excluded from university education, the TEVC should function as the country’s primary engine for skills-based social mobility.  Hence, a radical shift from institution accreditation to labour-market-driven training and from passive regulation to proactive workforce development is thoroughly advocated.

 Urgent overhaul of the VT architecture

Sri Lanka’s VT system is structurally incapable of responding quickly to global labour shocks. Fragmented authority, limited Ministerial empowerment, and bureaucratic inertia have rendered the system reactive rather than strategic and pragmatic. The VT function must be elevated in status and authority, with clear accountability for outcomes such as the numbers trained, the employability rates, and the foreign exchange generated.  

Currently, the VT aspect comes under a Deputy Minister and he should be given more powers to build up a strong VT sector. The present institutional arrangement is woefully not efficient and dynamic. 

The mere proposal for the establishment of an advisory board exclusively for the welding vocational sector has been relegated to the backseat for the last few months despite repeated requests being made and the publication of numerous paper articles. This is a case in point. Whilst the Industry Ministry has established 26 sectorial advisory councils, the Vocational Education Ministry’s reticence raises many eyebrows. A question to be raised is whether the VT sector has declined and deteriorated or whether it has been allowed to collapse.

The TVEC that comes under the purview of the Vocational Education Ministry has been in a complacent mood despite the enormity of issues coming with the vocational industry sector. Recently, the Chamber of the Construction Industry sought the intervention of the Government to import masons, carpenters, plumbers, electricians, etc. The construction industry is severely handicapped in the context of the cyclonic damages. Another disturbing factor is the local manufacturing sector today is surviving because of the immigrant Indian welders. According to a survey, only 5% of the students who followed welding courses at VT centres get qualified when their competency standards are screened by the foreign job companies. 

VT centres have failed to enroll children of Samurdhi recipient families for their vocational programs despite the fact he Samurdhi Department releases a grant of Rs. 50,000 (in selected programs up to Rs. 100,000) for each student.  These specific instances are only the tip of the iceberg and they speak volumes of the pathetic situation of the vocational sector. 

Sri Lanka’s dependence on foreign welders and skilled construction workers is a policy failure, not a labour-market inevitability. The current situation — where industries survive on imported skills while local youth remain unemployed — represents a structural contradiction that erodes national resilience. There has to be a strategic objective to achieve self-sufficiency in critical trades while exporting surplus high-value skill.

Integrating the SLBFE and TVEC 

The Sri Lanka Bureau of Foreign Employment (SLBFE) and the TVEC have a cardinal duty to generate foreign exchange by providing skilled labour to foreign countries. The SLBFE and the TVEC operate with overlapping mandates but without strategic direction and coordination. This institutional fragmentation results in poor utilisation, weak and missed opportunities. This integration is essential if Sri Lanka is to respond credibly to the US shipbuilding crises.

Universities as future shipbuilding talent incubators

Across the US, maritime organisations and educational institutions have long provided future nautical workers, including engineers, naval architects, and shipyard managers required to plan, supervise, and perform complex shipbuilding work. In light of the US dilemma, the time has come for the Sri Lankan universities and VT institutions to design and formulate appropriate courses for the benefit of the students and the country.

Sri Lankan universities – particularly technology faculties are underutilised in national workforce planning. By embedding shipbuilding, marine systems, welding technology and production engineering modules in to the degree and diploma programs, universities and vocational institutions can directly support the global labour demand while upgrading the country’s human capital  

Conclusion

The US shipbuilding dilemma is not merely an external crisis – it is a stress test of Sri Lanka’s institutional readiness. Without decisive reforms in governance, VT and foreign labour diplomacy, this opportunity will pass, leaving structural weaknesses intact. With political will, inter-agency coordination and private sector engagement, Sri Lanka can convert this moment into sustained foreign exchange inflows, youth employment at scale and long-term industrial upgrading.

The writer is a productivity and management consultant

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The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication