The big fry still slips through

While latecomers like West Bengal have surged ahead, Kerala, which drafted

its IT Policy in 1998-99, has not been able to woo IT Inc in a big way

The government will strive to make Kerala one of the software valleys of the

world, said the then state finance minister T Sivadasa Menon in his budget

speech for 1998-99. The same year "God's Own eState" drafted a

forward-looking IT policy with the three-fold strategy for establishing a

vibrant IT industry, building up a robust infrastructure back-bone and upgrading

the qua-lity of human resources, and modernizing governance thro-ugh the use of

IT.

Dubbed India's most IT-ready state, Kerala had also scored a first when it

conce-ptualized India's first techno-logy park, Techopark, in

Thiruvanantha-puram in 1990. Looking back, however, there is a feeling that

while the state had the vision, the action and impetus was missing. Today, West

Bengal, which is definitely a late entrant into the IT bandwagon despite having

a social and political structure similar to Kerala, has surged much ahead in the

race.

Infrastructure



A combination of factors are responsible for Kerala's failure to register

itself on the country's IT radar, the biggest being is lack of infrastructure.

"If we want the IT industry to grow, then infrastructure has to be improved

one hundred per-cent. People are objecting to the proposed express highway,

largely on the strength of misconceptions. We need to have lakhs of square feet

of high-tech buildings that cater to the IT industry," says VK Mathews,

chairman, IBS Group, Technopark.

Room to Grow in



When IT majors Wipro and Infosys planned to invest in the state, it was the

non-availability of large plots of land either at Kochi and Thiruvanan—thapu-ram

that proved to be a hindrance. Infosys asked for 50 acres of land near

Technopark in Thiruvananthapuram to set up its own campus. But when the

government started the acquisition process last year, it ran into trouble with a

section of the local people objecting. According to Technopark offi-cials, the

acquisition process is about to be completed and the land is to be handed over

to Infosys on a 25-year lease. Meanwhile, Infosys has started operations from

one of the Technopark buildings with a 200-seat capacity that is likely to be

increased to 500. One of the largest firms in Techno-park, US Software, has

sought 30 acres for expansion. To cater to the demand for land, the state

government sought to acquire 270 acres of land close to Technopark. But

following objections raised by local people, this too had to be scaled down to

100 acres.

After the establishment of Technopark in 1994, Kerala failed to come up with

a similar facility at its commercial hub of Kochi until recently. "The

state will set up more plug-and-play facilities to enable inves-tors to start

operations from day one. People are willing to pay more for these facilities for

the obvious advantages they get out it. Rather than create built-up spaces that

remain idle, investing more in "plug-and-play" provides better

ret-urns for government," accor-ding to IT secretary, Aruna Sundararajan.

Perception Management



Many studies have shown that Kerala ranks first or second on overall scores

for attracting investment. But when it comes to actual perception among the

poten-tial investors-it ranks way below, according to Rakesh Gupta, COO of

Allianz Cornhill Information Services, the Indian BPO arm of leading gen-eral

insurance company, Alli-anz Cornhill, UK. "Kerala has a lot of work to do

in perception management. When a foreign company looks for offshoring, they hire

consultants who in turn seek advice from local partners. And Kerala is not on

their agenda," Rakesh Gupta lamented.

Kerala spends about Rs 5 crore on promotional activities and regularly takes

part in national and international events such as IT.com, G.Tex-Dubai, CeBIT-Hanover,

TiE and Nasscom summits, apart from hosting its own bi-annual B2B event, IT

Kerala. "What is required is not just participa-tion in events but

networking with consultants, major industry bodies and associa-tions that will

in turn influence the IT companies," according to Rakesh Gupta.

Seasoned Professionals Wanted


Kerala, which failed to att-ract large companies until recently, also has a

problem in getting middle- and senior-level IT professionals. For senior IT

professionals seeking career growth, Kerala does not provide all that many

opportu-nities as would other leading destinations. In Technopark, there is a

non-poaching agree-ment between companies according to which no com-pany would

hire anyone from another company. This has helped in keeping attrition rates

down, but is not in the interests of the professionals, who have found an easy

way out by migrating to Bangalore or Hyderabad. This understan-ding among

companies has outlived its usefulness, as in the growing stages it was essential

for companies to retain talent. With the arrival of Infosys many of the small

and medium companies began to panic and indeed they did lose some talent.

SME Haven


Kerala has for long rued its inability to attract the big IT names, but there is

now a feeling that Kerala should not adopt the strategy of attracting major

companies as it is unsui-ted for it. "Kerala is a place for small and

medium companies because of pro-blems in land availability and infrastructure. I

think it is a blessing in disguise that large companies did not come. In fact,

that has enabled SME's such as SunTec, IBS, US Software and Inapp among others

to grow and attain international stature," according to Vijayaraghavan.

Many others like Sunil Gupta also share this opinion: "We need to position

Kerala differently and the USP of this place is not properly communicated."

What Now?



Kochi, the commercial hub of the state, is a hot contender along with

Hyderabad and Chennai to be chosen as a destination for Smart City to set up

Dubai Internet City. This would require 400-1,000 acres of land and it is

modeled on the concept of "city within a city" wherein there will be

edu-cational institutions, trading malls, multiplexes, hospitals, IT parks and

supporting infrastru-cture. The recently concluded G-Tex summit at Dubai offered

the venue for discussions between the state govern-ments and Dubai Internet City

officials. As many as 46 com-panies had shown interest after visiting the Kerala

pavilion and 19 of them are likely to visit Kerala soon.

After Infosys, Wipro has also signed a MoU with the state to set up its own

campus in Kochi and many BPO companies have evinced interest in setting up ope-rations.

No other state pro-vides the financial incentives as much as Kerala does. The IT

majors who have come here including Ernst and Young, Alliance Cornhill,UK RM-UK,

Visual Graphics (McKenzie), Sherston, UK, all could have gone to any other

destination. But the problem with Kerala is that the trickle is not turning into

a flood.

Kerala, despite its inherent advantages and an early lead has missed the

software bus. But it fails to tie the loose ends and plug the gaps, it will be

unfit to take the second chance it is offered.

Sreekumar Raghavan CyberMedia News