A potential IT powerhouse

Fibre optic cables being laid in Kochi. - K.K. MUSTAFAH

The rising IT companies of Kerala have proved the State's potential to win global customers and deliver high-quality software products and IT services.

A VISIT to Technopark in Thiruvananthapuram and a view of the plans of the private sector Technopolis in Kochi will indicate what lies ahead. A day at Technopark gives one an inside view of how adroitly Kerala's advantages have been melded with the demands of the global Information Technology marketplace.

This writer attended a global user conference held by SunTec Business Solutions, an emerging world-class enterprise software company. Customer-delegates had flown in from Europe and America; before their jet lag could wear off, they were received at the conference centre by caparisoned elephants and nadaswaram players. They then moved into the modern conference centre to discuss products to manage mission-critical functions of their businesses - how to bill for millions of transactions, many of them complex, in areas such as telecommunications and financial services. The staff of SunTec charmed the delegates with an experience unavailable almost anywhere in the world, and quickly moved on to impress them with technical expertise.

At an IT services company, US Technologies in Thiruvananthapuram, it was clear that a similar approach had generated a high level of customer intimacy. US Technologies' teams are surrounded by artefacts - posters and products - of their customers. A chief information officer from a large supermarket chain in California visiting US Technologies would not forget the combination of the exotic experience of such a ceremonial reception and the familiar high-tech environment in Technopark. The message that he would carry back is one of great attentiveness and commitment to the customer.

These companies and a few others have shown that it can be done. Kerala can win global customers and deliver high-quality software products and IT services. However, in terms of impact Kerala lags behind many other regions of India. There is clearly significant interest in Kerala, both in the government and in the private sector, to move forward in the IT arena. Since 1990, the governments have been committed to progress in technology-based employment and entrepreneurship. From the development of the Technopark under government auspices to the spontaneous enthusiasm surrounding the activities of TiE Kerala (a chapter of The Indus Entrepreneur, a global organisation of South Asian entrepreneurs), it is clear that many in Kerala want to create a favourable climate for entrepreneurship and technology-based business.

What needs to be done to accelerate Kerala's growth in the IT arena?

Nurture a culture of entrepreneurship. A major engine of growth in IT products and services has been entrepreneurship. However, Keralites even today prefer to work for large organisations. A culture of entrepreneurship needs to take hold in Kerala - young people need to be infected with the passion to create new enterprises, to dream big. TiE Kerala is active in fostering the values of entrepreneurship.

Kerala has excellent role models in IT to pick from, both home-grown and among its expatriates, who are making an impact globally in their business segments. A remarkable local entrepreneur is K. Nandakumar, founder of the Thiruvananthapuram-based SunTec Business Solutions. He has developed SunTec into a software company that successfully competes round the world in a very demanding segment, garnering a list of blue-chip customers. The sales and support to these customers, in Europe and in the United States, are executed from Thiruvananthapuram.

We are seeing an increasing number of high-tech success stories from expatriate Keralites in California's Silicon Valley. Among them is Rajeev Madhavan, a serial entrepreneur who has founded two major corporations in electronic design automation. He currently runs, as chairman and chief executive officer (CEO), Magma Design Automation, located in Silicon Valley. Sam Mathan was the CEO who nurtured Amber Networks and then sold it to Nokia. He now leads Matisse Networks. Govind Kizhepat founded iCompression, which was acquired by GlobeSpan; he is the founder and CEO of Universal Network Machines. Jayan Ramankutty founded Lara Networks, which was acquired by Cypress Semiconductor.

The late G.A. Menon straddled both worlds, successfully starting companies in Singapore and California and then moving on to founding US Technologies and Toonz Animation in Thiruvananthapuram.

Examples of such successful entrepreneurs will be an inspiration for others to strike out similarly along new paths.

Make Kerala a happening place. It is difficult to attract senior-level talent, or even people with just a few years of experience, to Kerala. The growth of the technology industry in Kerala, just as elsewhere in India, is constrained by the lack of management talent. This is particularly an issue for a foreign company. One reason why foreign companies go to Bangalore or Chennai is the talent base that is available, by nature a pan-Indian pool. Kerala needs to provide a climate that is culturally and socially attractive to non-Keralites, like Bangalore. The social infrastructure, including educational facilities at the school level, will benefit by becoming more cosmopolitan.

The government and the private sector need to work jointly on programmes to promote "cosmopolitanisation". Approaches could include initiatives to attract expatriate Keralites to return. Similarly, Kerala can target foreign nationals who, if they choose to live in India, will find Kerala physically and climatically more attractive than places such as Delhi.

A similar issue is that Kerala lags in the quality of English education, both spoken and written. This is a lacuna that needs to be addressed both for employment reasons and for making it an easy place to do business for people from out of the State.

Kerala also needs to promote actively the superior lifestyle that it affords to its residents. Kerala is less polluted and cleaner than most parts of India. Foreigners who relocate to Kerala, as well as visiting businesspeople, should find the direct flights to Kerala from Singapore and the Gulf with connections to the East and the West a particular attraction.

Make it easy to do business and change perceptions. Kerala is still shackled by its past notoriety as a place where it is difficult to do business. This adverse image persists even among expatriate Keralites. The State is still perceived as a place of frequent strikes and general harassment in the form of bandhs. An enlightened attitude in step with contemporary imperatives is needed. A new culture that avoids bandhs will create more employment at higher wage levels. Let us not drive out this opportunity by clinging to shibboleths of the past.

The agencies of the government should use all available tools, including those of e-governance, to simplify and streamline permits and approvals. In some of these areas, it would need to work with the Central government. An interesting model for Kerala is that of Delaware in the U.S. - a small State that incorporates a disproportionate number of U.S. businesses on account of its swift and simplified procedures.

Create a stimulating environment for the college-going population. India's IT industry is fuelled by youth. The average age of Indian IT services companies is often under 25. Kerala has a large number of such talented youth. The institutions of higher technical education need to be strengthened to nurture such talent. Non-governmental and voluntary initiatives should be encouraged, especially with industry sponsorship, to create an environment where college youth are exposed to the excitement and potential of technology industry.

Engineering colleges should sponsor incubators for new ventures; these will be sources of significant learning and a few commercially successful ventures will be born.

These incubators should provide access to basic electronic gear and software for students and potential entrepreneurs to tinker and create.

An active interchange of ideas and projects should occur between companies in Technopark and engineering colleges and even high schools. Some initiatives already exist in this direction; they need to become more intense and wide-ranging.

It is necessary to inspire at least a few to think big, to become entrepreneurs who create employment, to innovate, rather than tread the beaten path of seeking big company employment.

Involve expatriate Keralites. Kerala can benefit by the greater involvement of Keralites who have been successful elsewhere. A number of Keralites, comprising successful entrepreneurs, corporate executives and academics, have come together under the rubric of the Kerala Global Support Network (KGSN), to contribute their ideas and time for Kerala. This group includes leaders from TiE Kerala and TiE Silicon Valley and a number of other committed individuals.

The KGSN has launched three initiatives. The first is to create a tight linkage between TiE Kerala and TiE chapters in Silicon Valley and elsewhere. TiE Kerala is already one of the most active TiE chapters in India and seeks ways to promote entrepreneurship that builds on Kerala's unique attributes. The second, in collaboration with the American India Foundation, promotes computer education in high schools. The third is an effort to provide a think tank, a sounding board, for Kerala's business and government leaders for ideas that will help the State's advancement. This network should be tapped by industry and government.

Kerala's reputation is growing. The State is indeed, albeit belatedly, being recognised as an attractive location for IT and services industries. Kerala's emergence as an alternative is undoubtedly linked to the strains on infrastructure in locations such as Bangalore. The State's bewitching natural charm, when contrasted with the congestion of other industrial locations, translates into powerful competitive advantage. Most business people who visit Kerala are smitten by its beauty; it is a place that they and their families would enjoy travelling to, giving them the ability to mix business and pleasure. This is a particular advantage, given that global customers have to travel a long way to get to Kerala.

Companies that have established operations in Kerala speak highly of the young workforce. The younger generation seems to be imbued with the right attitude of hard work, of commitment, and of a can-do spirit.

Arun Kumar is a management consultant, former entrepreneur and venture mentor based in Silicon Valley, California. He is a co-founder of the Kerala Global Support Network.