Kerala has natural, social, educational advantages that benefit the IT sector'

Q&A: Binu Sankar, CEO, GTech

'Kerala has natural, social, educational advantages that benefit the IT sector'

George Joseph / Chennai July 11, 2011, 0:24 IST

The Group of Technology Companies (G-Tec), a 175-member organisation of IT & ITeS companies in Techno Park and Info Park, has proposed that the state government start an 'Invest in Kerala Mission', on the lines of 'Invest in Sweden' and 'Invest in Scotland' campaigns to attract IT-sector investments into the state. In an interview with George Joseph in Kochi, GTech chief executive officer Binu Sankar says the prosopsals are expected to be included in the new IT investment policy. Excerpts:

Are you hopeful of making Kerala the most attractive IT destination in India?
Surely, Kerala has the natural, social and educational advantages to become the most sought-out IT destination of India. Talented young people are abundant in Kerala. Along the length and breadth of the state basic infrastructure facilities like roads, power etc are available. If the government can offer one of the basic facilites at lower cost, the state will be the obvious choice of IT companies

How do you see Kerala's progress compared with other south Indian states in IT sector?
Kerala had started the first IT park in India in the late 1980s, but it could not maintian that level of initiative in the next two decades. Even now the state' s IT sector is providing direct employment to just 40,000 people. Techno Park Thiruvananthapuram is having 30,000 employees and another 10,000 in Info Park Kochi. But just one campus of a major IT company in Bangalore is having strength of 20,000-25,0000. So Kerala is lagging far behind, though it was the pioneer in this sector.

Also, top IT companies like TCS and Infosys have a nominal presence in Kerala. Techno Park and Info Park account for 90 per cent of Kerala's IT business. In 2009-10, the total business trunover of the sector in Kerala was Rs 2,412 crore which was just 1 per cent of the total all-India business. This year 16-18 per cent growth is expected. So it is alarming that Kerala's postion is rather insignificant compared to the growth of other states. Apart from that, 70 per cent of the companies are SMEs which employ 15 employees each on an average. This is pathetic when we compare the increasing number of highly educated manpower in the state.

What are the major handicaps that hinder growth in Kerala?
The huge cost escalation on the operations side in recent years is a major concern and we have discussed the issue with the new state government. Five years ago, the major advantage of Kerala was the lower operational costs, which was 50 per cent lower than other major south Indian locations. The lower land prices and rent were the major attaction. But during last couple of years, this had changed tremendoulsy and now Kerala is on a par with other states on the operational cost. The government should address this issue in its IT policy.

What are your expecations from the next phase of development in Kerala in the light of coming up of Techno city and other local IT parks?
Kerala is going through a big leap as major companies are now eyeing the state. Oracle has set up a shop in Thiruvananthapuram and compnies like TCS and Infosys are planning big for Kerala. Smart City will also give a big boost to the state.

What is new on the marketing front and identifying fresh markets?
This May, a G-Tec delegation visited Denmark and Sweden and a sizeable business opportunity had been identified in these countries. Sectors like mobile application, clinical data management, engineering services, embedded systems and renewable energy sources had been identified as potential areas and there would be counter visits from these nations. Business to the tune of Rs 100 crore can be evolved. Experion Global, a Technopark based company, has already signed a deal with Peak Telecom of Denmark. We are also looking at African and ASEAN markets very seriously and invited delegations from there. Other potential markets identified are Finland, Island and Germany.

Do you see any special advantage to Thiruvananthapuram as a destination?
The development of Technocity and the next phases of devlopment of Technopark will provide big opporutinities to the capital. The city can be developed as an R&D hub especially in medical research segment. TCS has acquired 82 acres in Technocity. This will be a milestone in the development of Thiruvananthapuram on the IT map of the country.

What are GTech's other sugestions to the government?
Under the IT Mission Kerala, there should be resident representatives in the US, EU and in West Asia for constant interaction with overseas companies. The success stories from Kerala should be marketed in these countries and promotional initiatives should be strengthened like it happened in God's Own Country campaign in tourism sector. Industry representation should be ensured in the Programme Implementation Board (PIB) of Technopark and Infopark. The government should nurture an ecosystem conducive to industrial and IT development of the state.