Into the big league

Kerala is successfully ending the lull in its Information Technology industry by attracting more international players to its Technopark.

AS all promoters of new shopping malls know, the biggest challenge is to have a compelling attraction as anchor. Persuade a key commercial player to set up shop in a strategic location, and the public will pour in, bringing business to all shops. Things are no different when it comes to promoting a State as a destination for Information Technology. No matter how unanswerable the logic, how compelling the fiscal and logistical attractions, the stampede will not start until a star performer shows the way.

This is a fact of life that the Kerala government has learnt the hard way. When it created Technopark outside the State capital, Thiruvananthapuram, it was the nation's first combined hardware and software technology park. It was equipped with world-class infrastructure and blessed with an ambience and a work environment that only Kerala could provide. Less than a decade on, the Park saw unit after unit setting up shop and new structures coming up to meet a steady if not spectacular demand. Yet, other southern States, principally Karnataka and Andhra Pradesh, seemed to attract more international players, with far fewer visible assets.

And then it happened. In early August, the Bangalore-based Infosys - the most charismatic of Indian IT players, if not the largest - announced that it was becoming Technopark's latest tenant. Admittedly, the 5,580 square metres of space it was renting was not large by any stretch - it would support about 50 engineers. But as its ninth development centre in India, it was poised for a bigger role. According to S. Gopalakrishnan, the chief operating officer and one of the co-founders of Infosys (he is also what Kerala would consider a son of the soil), Infosys would soon create its own 50-acre (20-hectare) software facility in Technopark's neighbourhood.

Tata Consultancy Services, India's number one software exporter, is already in Technopark with a training facility of its own. Now with Infosys coming to Kerala, it does look as if the two would serve as the lynchpin for the State's IT mall.

In other ways too, it looks as if Kerala's IT venture is finally bootstrapping into the big league. The 180-acre (72-ha) Technopark may soon be dwarfed by a 200-acre (80-ha) IT park in Kochi, which is fast emerging as a significant hub of the IT-enabled services business. The Kerala Industrial Infrastructure Corporation (Kinfra), which has a 180-acre park in Kochi, is well on the way to putting up the 200-acre second structure as part of a Rs.26-crore government initiative to replicate the Technopark success there and provide a million square metres of developed space. Around seven companies, most of them outsourcing players, are already in Kochi. Another 500-seater call centre, a joint venture between the Kochi-based Nirmal Agro group and Source Results Corporation, Texas, United States, may be the next big thing to happen here. The gateway that Kochi provides, courtesy Videsh Sanchar Nigam Ltd (VSNL), to 69 other countries through its 15 gigabits per second (gbps) broadband pipe, is something few other States can match.

This is one reason why Kochi is also attracting private sector players in the tech park creation business. The home-grown Muthoot Pappachan group has joined hands with the Singapore-based Jurong Town Corporation (JTC), an experienced agency that has had notable success in creating Bangalore's International Tech Park Ltd (ITPL) and Hyderabad's Hitech City Phase III. Together they hope to create a 26,000 sq m "Technopolis". The construction work will start in September and is planned for completion within 14 months. The Gulfar Group, belonging to a Gulf-based non-resident Indian and which created Kerala's best conference establishment, the International Convention Centre in Kochi, is also said to be in the advanced planning stages of its own 50,000 sq m IT Park to be set up in Kochi.

Individual IT companies have already put Kerala on the global map in areas where India was never assumed to have expertise. Until quite recently, a regular shipment left Kochi almost every month for destinations such as Penang , Singapore or Bangkok. It contained thousands of small power supply units meant for various factories of the U.S.-based printer leader Hewlett Packard. No matter where you bought an HP inkjet printer, it contains under its hood a power unit that was sourced from the assembly lines of Network Systems and Technologies Private Ltd (NeST), a Kerala-based IT company that is part of a global Indian-owned $30 million group. NeST has now made Kochi the hub of its activities, which have spread to Bangalore. It has also entered the burgeoning business of animation products.

Where is all the money coming from? Not every IT player has the financial clout of NeST or Infosys. The State government has decided to put in some of its own money into IT and biotech ventures that seem able to deliver tangible results. It has created a Kerala Venture Capital Fund of Rs.20 crores, which works closely with other State-owned industrial and financial corporations to provide seed money for high growth projects.

ALL this infrastructural activity may finally help encash Kerala's traditional strengths - excellent educational levels and consequently rich human resources. At the other end of the educational spectrum, the State, tiring of requests to the Centre to locate an Indian Institute of Technology in Kerala, finally decided to go ahead with its own. In March 2002, the Indian Institute of Information Technology and Management - Kerala, or IIITM-K, began functioning at Technopark under the leadership of former IIT academic K.R. Srivathsan. The institute is well on its way to creating an educational grid linking all Kerala institutions of higher education, as well as a separate Karshaka Information Systems Services and Networking (KISSAN) in association with the Kerala Agricultural University. And in a neat instance of bridging the gap between academia and real world applications, IIITM-K has set up recently a separate project wing at Technopark to steer these reach-out activities.

In another initiative in e-enabled education, the Indian Institute of Management - Kozhikode, or IIM-K, joined hands with `Direcway', the educational arm of the satellite technology company, Hughes, to offer many of its courses in the form of satellite-based distance education. Today, as students take IIM-K courses via satellite and interactive video conference at Direcway centres in Bangalore, Hyderabad and Mumbai, Kerala's current mantra of "wired to the future" rings true.

IIITM-K and IIM-K have come rather late in Kerala's development calendar. For almost three decades since 1971, Kerala could boast of only one university dedicated to technical higher education, the Cochin University of Science and Technology (CUSAT). It quickly became known for its research strengths in specialised fields such as ship technology, meteorology and ocean sciences. But a virtual throttling of all growth owing to a financial crunch saw the university pass through a bad patch in the mid-1980's and 1990's. But in recent years a generous grant from the Netherlands has provided the much-needed resources for CUSAT, and it is finally rising to its full potential as one of the premier techno-academic institutions.

Old timers will be surprised to see that the Foreign Languages Department at CUSAT now has a full-time faculty member for English, in addition to German, French Russian and Japanese. This is symptomatic of a new realisation statewide that while talking to foreign customers in their own tongue provides a competitive edge, English is what has put India on the global map of IT-enabled services. The State IT Mission has launched schemes for beefing up English in college-level courses. And at least one Kerala-based educationist in the private sector, the Kochi-based Adult Faculties Council, has evolved the "Fluentzy" brand of self-study courses for mastering spoken English, and it is popular all over the country.

Recent studies have highlighted that Kerala ranks number one in India for law and order - an important consideration for global IT players. But in one crucial area, Kerala is still struggling to jettison the ideological baggage of decades: its reputation for labour militancy. The present government has striven to put in place fresh laws that will make it difficult for labour problems to hamstring development activities. But old reputations die hard. As Kiran Karnik, the Chairman of NASSCOM (National Association of Software and Service Companies), warned recently, the lingering fear of Kerala's aggressive labour is restraining many potential IT players from heading for the State. These fears may well be imaginary, given the new pragmatism in Kerala today that cuts across the political spectrum but proactive measures may well be required before the damage is contained. Coming from Karnik, these amber signals have a special urgency. It was NASSCOM that a year ago astonished the Indian IT establishment by predicting that Kochi was possibly the place that would hold the maximum promise as an IT destination - ahead of established destinations such as Bangalore and Hyderabad.

The potential is clearly there, and the time to deliver seems to have come as Kerala stakes its claim today to a share in the country's digital tomorrow.