Financial Daily from THE HINDU group of publications
Monday, May 22, 2006
Financial Daily from THE HINDU group of publications Monday, May 22, 2006 |
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Info-Tech
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Infrastructure Government - Politics Columns - Random Walk States - Kerala IT's the way to go K.G. Kumar
Significantly enough, one of the first meetings that the new Chief Minister of Kerala, Mr V.S. Achuthanandan, held soon after taking over as head of the Left Democratic Front (LDF) was with a team from US Technology, a leading software and business process outsourcing (BPO) firm at Technopark, Kerala's first electronics technology park in Thiruvananthapuram. At the meet, the Chief Minister is reported to have said that the LDF government would examine the deficiencies in the Information Technology (IT) sector. He added that the IT sector should provide details that would help his government create more jobs in Kerala. In response, the US Technology team said they would be able to create 1,000 employment opportunities in a year and 15,000 opportunities in five years if the government provided the infrastructure needed for the expansion of the company's capacity in software development. Whatever be the merits of the claims of job creation, the fact that the Chief Minister chose to interact with executives from the IT sector - of all the sectors in the admittedly narrow range of Kerala's industrial spectrum - speaks volumes of the intent and direction of the new government's industrial policy. Despite the fact that this particular meeting with the Technopark software firm may have been the result of some insider lobbying and skilful public relations, it stood out amongst the plethora of photo opportunities provided by sundry other meets with political leaders and trade unions that occurred soon after the new government was sworn in. That a group representing business and industry was chosen to interact with the new Chief Minister so soon after the formation of the new government should lay at rest doubts about the LDF's love of industry. Emboldened by the success of the West Bengal Left Front government's in luring the likes of the Tatas and Dhoots of Videocon to announce substantial investments in the State soon after winning the elections for a record number of times, the LDF in Kerala is perhaps hoping to follow suit. That may be a difficult act to upstage or even clone, given the very different histories of the two States, especially the hoary -- if by now faded -- glory that the manufacturing sector has long enjoyed in West Bengal. But by focusing on the IT sector, Kerala may well be able to make creditable inroads into rapid and widespread industrialisation as well as job creation. For that reason, it was equally discouraging to hear the new Chief Minister express serious doubts - elsewhere, at a post-victory press meet - about the Rs 1,500-crore Smart City project proposed for Kochi. The Chief Minister's fears centred around the "real estate" aspect of the deal - whether the whole project would turn out to be a mere vehicle for transfer of land and commissions for a select few. As doubts go, these are genuine and cannot be dismissed outright. Perhaps, they even call for a review of the terms of the deal with the Dubai Technology and Media Free Zone Authority (TECOM), the main offshore promoter of the Smart City project. Yet, the idea behind the project of luring large-scale and massive investments, must be recognised. All over the world, most of the IT success stories have come out of either industry-university interactions or the incubation period in a science or technology park. Thus, the need for a centralised repository of infrastructure and entrepreneurial talent is evident. Even if the decentralised route of a cluster of IT firms and ancillaries -- as in an "IT corridor" or "electronics superhighway" -- is seen as the better option for a State like Kerala, the fact remains that mega-projects cannot be avoided altogether. And they need not be. As with the Smart City project, the idea should be to maximize gains for the host State in terms of investments, jobs, the spirit of enterprise and, ultimately, addition to the net State Domestic Product. Needless to add, this should not be at the cost of the State's natural resources or inherent advantages. The new LDF government must thus adopt a mix-and-match approach to the State's IT development paradigm - concentrate on the larger infrastructure projects like industrial and technology parks and special zones, while not neglecting the potential of the cluster approach of decentralised development. If it can ensure fair and equitable terms of such development, the new government can yet hope to brighten up Kerala's industrial scene. The writer can be contacted at kgkumar@gmail.com
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