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.

source: http://www.deccanchronicle.com / Deccan Chronicle / Home> News> Current Affairs / DC / by Amrita Didyala / December 19th, 2013