Kerala IT: An early riser but a slow runner

 

 

Twenty years back. the idea to set up a technolgy park in Thiruvananthapuram seemed fresh, if somewhat weird. Once the concept was approved by the government, it took five years to start functioning. The Technopark in Thiruvananthapuram has the credit of being India's first IT park even though by the time it started functioning, there were other IT hubs in the country.

Today, Technopark is the single largest information technology park in India with a built-up area of 4.5-million sq.ft. The campus houses 185 IT and IT-enabled-services companies and more than 28,000 professionals work here.

Kerala has always had a bad reputation for its labour-supportive industrial atmosphere and terrible work culture where trade unions rule the roost. Naturally, when the idea of a Technopark was born, there was scepticism among investors and the public. However, Technopark’s first mover advantage has come in handy in the long run.

The IT hub is celebrating its 20th anniversary in 2010. Though technically it’s the 15th year of functioning for the institution, Technopark was conceptualised in July 1990 as a facility to foster the development of high-technology industries in Kerala. The park was set up under the auspices of Electronics Technology Park, Kerala – an autonomous body under the Department of IT. The aim was to create infrastructure and provide support for development of high-technology companies in the state. The foundation stone for the first building in the complex was laid on March 31, 1991, by the then chief minister, E.K. Nayanar. Noted industrialist K.P.P. Nambiar was Technopark's first chairman. The park was formally dedicated to the nation by the then Prime Minister, P.V. Narasimha Rao, in November 1995.

Technopark’s phase III expansion is now underway and 92 acres of land have been acquired for the purpose. Recently chief minister V.S. Achuthanandan laid the foundation stone for the fourth phase development planned on 450 acres of land where an integrated township, Technocity, will be set up.

With all these achievements, Kerala should have been a 100 per cent success story on the IT industry front. Unfortunately, it is not. The state is trying hard to come up in terms of export revenue from the software industry. Bangalore, Hyderabad and even West Bengal are far ahead of Kerala in software export. A lot of Keralites are working in these cities as IT professionals. IT software export from Kerala brought in a meagre Rs. 1803 crore in 2008-09 while it was Rs 70,375 crore for Karnataka. National software export was to the tune of Rs.207,352 crore during the same year. Still, Technopark and Thiruvananthapuram have something to boast of. A major chunk of Kerala’s revenue came from the capital city, mainly from Technopark and Infosys. However, it’s not completely discouraging as Kerala has increased its share over the years. It was Rs. 750 crore in 2006-07 and Rs. 1201 crore in 2007-08. The growth rate is encouraging, but nowhere near that of the IT majors. “The last two decades were really a happening time for Kerala’s IT sector. Technopark played a major role in shaping the IT culture of Kerala into a healthy one. No other competitor can achieve the infrastructure and human-friendly work culture in Technopark,” says the state IT secretary, Ajaykumar.

Many home-grown companies have tasted success in the global IT sphere from their base in Technopark. Toonz Animation, NeST, UST Global and SunTec Business Solutions are a few worth naming. Technopark CEO Mervin Alexander says the park is well-equipped to take the IT industry in Kerala to new heights. “Kerala will have 200,000 direct job opportunities in IT/ITES industry by 2015 and Technopark will play a major role. Technopark will be among the top five investment destinations,” he claims. “Technology Business Incubation Centre has been set up to promote entrepreneurship. Our objective is to become a one-stop shop for all IT needs of the state,” adds Mr Alexander.

Apprehensions about Kerala’s work culture were the major initial blocks. “Kerala is notorious for political interference in every sector. Strikes happen too often, scaring away investors. Fortunately, Technopark or Infopark hasn’t lost a single day because of strikes. This has instilled confidence among investors,” says Arun Kumar, a professional working in Technopark.

Arun’s words are supported by a few facts. Of course, the trend is changing and more international firms are showing interest in starting operations at Technopark. IBM and Oracle are planning to come here and delegations from both the companies have already visited the campus. Infosys has set up a campus of its own on 50 acres and Tata Consultancy Service is already operating its global learning centre, one of the biggest in Asia, here. The centre trains 24,000 engineering graduates every year.

"The future isn't bleak although Kerala trails behind three other southern states. But the state government should make concerted moves. The way it is going at present, the result will not be good,” says Ajay Prasad, a management consultant.

Prasad does not support Kerala’s plan to develop IT parks in every district. “Kerala has to develop Thiruvananthapuram as its IT hub on the lines of Bangalore or Hyderabad. Thiruvananthapuram houses almost 75 per cent of Kerala’s IT industries. The presence of IBM or Oracle or any major multinational will be a boost. Likewise, if a top IT infrastructure developer launches a project in Thiruvananthapuram, that will help the city to develop as the 4th IT hub in South India,” he clarifies.

As Technopark celebrates two decades of excellence, it isthe right time to think of the choices that are ahead.