Friday, September 2, 2011

Strategy for Promoting Gujarat as IT/ITES Center of Excellence

Ten Point Strategy for Promoting Gujarat as IT/ITES Center of Excellence

  1. 1.Set Aspiring Goals for Gujarat IT/ ITES Every plan starts from an aspiring goal. Indian IT industry had goal of $50 Billion exports by 2010. Gujarat Government should set up a similar goal for the state also say $10 Billion IT/ITES Revenue by 2020.

  1. 2.Promote Local Entrepreneurs and Local Firm to Achieve Global Scale – What current IT/ITES centers of excellence such as Bangalore, Chennai, Hyderabad, Pune, Mumbai, Noida and Gurgaon have in common? They all have at least one of the Top 10 IT/ITES Company headquartered in their region. Bangalore has Infosys, Wipro; Chennai has Cognizant; Hyderabad has Satyam; Pune has Tech Mahindra; Mumbai has TCS; Noida has HCL and Gurgaon has Genpact.

Investment by big companies only would not make a region as center of excellence unless a local firm has scaled up. The case in point is of Chandigarh, Bhubaneswar, Trivandrum, Jaipur, Kolkata, Mysore, etc where big firms like Infosys, TCS, Wipro, Genpact have invested but no local company has been able to build a scale.

Government should indentify few local firms which can scale up and give these local firms preference for government work and local industry work, to help these local firms achieve the initial economics of scale.

There are companies which have centres in Gujarat but they are Head Quartered in other places. Government can request these firms to relocate HQ back in Gujarat.

  1. 3.Encourage Rivarly and Cooperation between firms - Why Bangalore has emerged as leaders among other IT/ ITES centers of excellence? One of the reasons is the rivalry between two big firms Infosys and Wipro. The management literature has examples that when firms vigorously compete with each other for work and talent but share other location dependent resources, the centers of excellence are created. Gujarat government should promote healthy competition and rivalry among local firms like it is doing in auto sector.

  1. 4.Prepare Master Plan for Infrastructure, Manpower Supporting Industries and Other Catalyst factors - What kind of resources will be required for $10 Billion IT/ITES business? Office space, residential space, manpower, transportation, entertainment among others things. What kind of factors do the companies consider when they decide their IT/ITES location strategy?

There is no need to reinvent the wheel as some success has already been achieved. Here the best feedback the Government can get is from local entrepreneurs and companies, who have opened their centers, about their concerns and frustration points. Remove their frustration points and wheel can be accelerated.

Backpaper calculation says , $10 Billion revenue can give employment to 5 lakh employees , utilize space of 50 million square feet etc

  1. 5.Promote Gujarat as Center of Excellence for Public Sector and Analytics – Every center of excellence have achieved some specialization because of manpower and supporting industries. Gurgaon is known for the call centers, Bangalore is known for IT and product development, Mumbai is for known for Financial captives, Hyderabad is for known for Pharma Services etc.

What should Gujarat concentrate on? Historically Gujarat’s strength lies in large scale activities such as cooperative movements like Anand etc . In current times Gujarat has established itself as manufacturing and Auto hub. In IT/ITes sector this historical strength can be translated into Public Sector and Engineering Services space.

How can Government promote Gujarat as Public sector and Engineering Services hub? Public sector and Engineering services need specialized manpower. Gujarat has nation’s renowned rural management institute IRMA and IIM Ahmedabad . Government can think of establishing another technical institute focusing on Automobiles and Engineering Services With these institutes involvement, Government can train human resources for Engineering Services and Public sector.

  1. 6.Promote Gujarat as an Emerging Center for Cloud Computing – Getting a pie of new work is easy than fighting for existing work. So Government should also concentrate on developing expertise and manpower in upcoming technologies such as Cloud Computing. Government can setup center of excellence in Cloud Computing at IIM Ahmedabad.

  1. 7.Promote Gujarat as Captive Centers Destination – Every other IT/ITES Center of Excellence has captive center of few fortune 500 firms. Government should identify few Fortune 500 firms (Automobile Firms) who do good business in Gujarat state and request these firms to open their one of captive centers in the state.

  1. 8.Establish a Venture Capital Fund – Establish a Venture Capital Fund in collaboration with IIM Ahmedabad to promote young technology entrepreneurs to start and grow their firms in Gujarat

  1. 9.Reach out to Gujarati Diaspora – Gujarati Diaspora is employed in technology companies world wide. In India also because of lack of opportunities, many Gujarati engineers have moved out to other locations. Government should reach out to them for two reasons. The first reason is to encourage them to come back and improve the competiveness of Gujarat state. The second reason is to seek their help in marketing attractiveness of Gujarat to the firms, who want to outsource their work or who want to set up captive centers. This is similar to the role played by the NRI’s in the initial days of India’s outsourcing revolution.

  1. 10.Aggressive Marketing to Promote Gujarat as IT and ITES Destination– What good the policy and attractiveness of state is if it is not marketed to decision makers? Employ aggressive marketing similar to Vibrant Gujarat as “Great Gujarat: Preferred IT and ITES Destination”