Hyderabad: While Information Technology has chosen Hyderabad as its favoured destination in the state, attempts to attract IT giants to other destinations had seen minimal response so far.
However, a lot of action is expected in the near future with the bifurcation issue coming to a finalisation, the 'intent' to draw IT companies towards the Seemandhra region has grown very strong.
There is a huge need for infrastructure development in the new Seemandhra state as all the tier II destinations, which were earlier identified in the IT policy, are mostly Seemandhra cities.
“There are no five star hotels and no infrastructure for the cities in Seemandhra region to begin with after bifurcation. We have to improve the infrastructure especially transportation. International airports will have to be developed in cities like Vijayawada, Rajahmundry and Tirupati since IT will not come without infrastructure. Hyderabad was developed as capital city of Andhra Pradesh and the best infrastructure was created here, but now, with the state being divided, Seemandhra will need to start afresh,” said finance minister Anam Ramanarayan Reddy.
Action may be seen in creating whole new eco-system. Infra-structure development may be seen in other prominent cities like Visakhapatnam, Kakinada, Vijayawada, Tirupati and Waranagal.
IT has not only created Hyderabad as it is but has attracted huge investments in various sectors.
However, it might be difficult to draw global players towards these newer destinations, say industry insiders. Also the fact remains that almost all big IT companies are global players and very few small companies may be owned by people from either state.
While the existing Information and Communication Technology policy 2010-2015 has identified Tier II locations (Visakhapatnam, Kakinada, Vijayawada, Tirupati and Warangal) and Tier III locations (all towns and district headquarters) for years now, there is very little that has moved on the ground so far.
“Although it may be possible to create infrastructure and the eco-system, India currently does not need another tier II destination and hence it will be difficult to attract big players to these newer locations. For an MNC, established tier II destinations like Pune, Bhubaneshwar, Nagpur or Coimbatore makes sense rather than coming to Vijayawada or Warangal,” said vice president (Products and Centre Head for Software), Progress Software, Ramesh Loganathan.
In fact, all these identified tier II destinations already have state-of-the-art IT infrastructure and IT Parks but still more than 70 per cent of the IT park in Vijayawada, for instance, remains unoccupied. Also the fact that global MNCs like to come to established destinations as they want to select employees from an existing vibrant talent pool and preferably from other companies, puts these other destinations at a loss.
However, these destinations have begun seeing some growth in terms of IT exports with Visakhapatnam leading with Rs 1,000 crore, Kakinada with Rs 100 crore, Vijayawada at Rs 70 crore and Tirupati and Warangal at Rs 10 crore worth IT exports. The growth registered was 22 per cent in 2012-2013.
Industry insiders believe that currently Visakhapatnam and Vijayawada are better positioned for growth but it will come at its own pace.
While the IT department had been pushing these destinations for back-offices after no global players showed interest, industry insiders too believe that the growth potential of these destinations would be more from IT incubation.
“There will definitely not be any shifting of business or global companies setting up their businesses in these locations. In fact, it will be very difficult to get people to move to any of these cities. But what can begin now is innovations-led business may start off with the right eco-system. As innovation-led businesses can be started with an incubation centre, an angel network and a proper funding system, it takes 15 to 20 people to begin this kind of a setup. While such businesses can start immediately, for IT businesses and big companies to go to these destinations, it will be a slow process,” added Mr Loganathan.
Amidst all of this, Hyderabad will continue to grow and is expected to pick up pace with the Information Technology Investment Region project and clarity on the bifurcation issue.
Next: Infrastructure needs boost
Infrastructure needs boost
Creating infrastructure in advance is the way ahead for the newer destinations that have the potential to attract IT. While it is important to create infrastructure, the China-model of creating advance infrastructure is what the sector needs now. Be it roadways, railways or bullet trains, all are advisable for connecting Hyderabad to other potential IT destinations.
Although there will not be any exodus of workforce from Hyderabad, better connectivity can only help. “The best way to follow will be the China model of growth, which is by creating key infrastructure like airports which will go a long way. Also bullet trains will help create the right eco-system in the other cities which are already seeing IT growth,” said IT expert, V. Rajanna.
Not only IT companies but also the workforce, despite loyalties, will be attracted to opportunity. “A professional who may feel very strongly for Andhra may not actually go and work in the region or even Hyderabad for that matter if he gets better opportunities elsewhere. In fact, the Telangana IT Association, formed after the Union government’s decision of bifurcation, too has ste-ered clear on these lines and have maintained that employees are willing to work on either side.
“Currently everyone is looking at Hyderabad and with all the big IT companies already present here, the city’s IT sector may continue its growth while the other Seemandhra cities may take a decade to grow. But even Hyde-rabad saw growth only after the international airport and ORR came in. Similarly, once these destinations have the right infrastructure, companies will start coming as they are only interested in business environment and not the size of a city,” said minister Anam Ramanarayan Reddy.
Next: Incentives of MNCs, nightlife attract youth
Incentives of MNCs, nightlife attract youth
Hyderabad: The transformation that Hyderabad has seen in the last one-and-a-half decade has been primarily IT-driven and has not only ensured state-of-the-art infrastructure, but has also brought about a cosmopolitan touch to the city.
Five years ago, Hyderabad was still a city, which techies would not prefer to come down to from Bengaluru or Chennai. But that has changed now and for the next decade, Hyderabad will remain the crown for the two divided states. The influence of inter-continental travel that the techies have brought in to the city will percolate down to other cities with the bifurcation of the state and developing of newer IT hubs. In fact, Visakhapatnam is expected to see a huge leapfrogging effect but may be slow for now.
Nightshifts and graveyard shifts in the IT sector, along with a cross-section of employees coming in from across the country and abroad, and employees travelling to foreign countries on projects, enhance the level of exposure for these highly educated knowledge workers. Moreover, all MNCs and even BPOs (which are primarily night shift) create a whole world inside the offices for their employees.
Right from shopping options to food courts, swimming pools and tennis and basketball courts to gyms, corporate outings and other entertainment options, all are available within the campus. Software and BPO employees also vie for vibrant night life in a city and as a result, mushrooming of food joints, pubs, night-clubs etc. come along as an addition.
However, some experts believe that it is not really an “IT culture” but an offshoot of the 21st century culture which is coming in with the exposure of the younger generation.
“With IT bringing in over 3 lakh highly skilled knowledge workers and with the availability of various avenues like malls, multiplexes and nightclubs, they are making choices in spending. However, it is not really an IT culture but more of the 21st century culture which is visible here. This is definitely going to percolate down to other tier II and III destinations as they are already seeing a huge change,” said Padmaja, an IT expert with over a decade of top management experience.
While this culture is very visible in the Hyderabad, with the bifurcation process, the IT sector, which has been waiting for a smoother work environment, will only see a boom.
“Infrastructure like roadways, malls, multiplexes and the whole eco-system of Hyder-abad has developed because of IT. Undoubtedly, it brings about a cosmopolitan touch to a city. This culture will percolate down to cities like Visakhapatnam, Tirupati, Vijayawada, Warangal and Kakinada, which have been identified for infrastructure development by the state government and also have a substantial talent pool,” said V. Rajanna, an IT expert.
