It can be a hub not only for auto and textiles but also pharma, IT and animation industries.

Tamil Nadu is poised on a big opportunity of demonstrating leadership and taking on a bold agenda to look beyond the shores of the country and onto the global arena.

With one of India's highest per capita incomes, the economy of the State is one of the most dependable, consistent and urbanised within the country. It is the second-largest software exporter in the country by value. However, what is even more exciting is the latency that remains untapped. Tamil Nadu has the potential to become an international destination of choice. With the combination of talent, technology and incentivised policy, the State has all the ingredients to make the leap to become a global destination for products and services. Consequently, cities such as Chennai have the opportunity to grow into a global city.

Tamil Nadu's growth can be powered by sectors such as automotives, textiles, manufacturing, biotech, health, energy, pharma, animation, visual effects, and, of course, IT, where it is already establishing leadership. But leadership isn't good enough; it must become global hubs in these sectors. It must attract investment to drive growth and revenues multi-fold, which will, in turn, help plough investment into the State for development.

Making this huge leap when resources are limited, calls for an extraordinary level of innovation. Realising that innovation is the engine for national competitiveness in the 21st century, the Govt has announced 2010 as the ‘Decade of Innovation' and plans to establish 14 national innovation universities. Indians are already experimenting with “frugal innovation” models that make costs much lower for firms in India than for most competitors in other emerging markets. India's growth must be inclusive, built on the fundamental of doing “more from less for more people” (i.e.) achieving a better performance by using less resources and benefitting more people.

AUTO, TEXTILE HUB

Chennai, and a radius of 50-60 km around, has emerged as the ‘Detroit' of India, with a strong engineering and auto parts industry supporting it. More than 40 per cent of India's car production and 35 per cent of India's auto-components production, a sizeable part for exports, comes from the region. However, global competition means that other destinations and countries are at your heels. After all, the real Detroit did fail and there is internal competition from states like Gujarat. We need to constantly think of ways to strengthen what we have. Should there be a dedicated freight corridor from production areas to Chennai port? What is the level of automation and efficiency at Chennai and Tuticorin ports? Do we need an effective and speedy single-window clearance for approval of auto manufacturing proposals?

Another area of leadership is that of textiles. The State has the distinction of contributing one-third of the total textile production in the country and is a major source of foreign exchange. Cities of Coimbatore, Tirupur and Erode have earned the name of the ‘Textile Valley of India' for their textile mills. They must now aim to become global brands. Silk from Chennai, for instance, must be on the shopping list of every tourist to India.

The handloom sector is a treasured traditional resource. But tradition must keep up with modern taste to stay alive. Better market connects and a better understanding of changing tastes of the customer will result in product diversification. Our talented artisans need help with technology upgradation, and finer aspects of design and finish.

Moving onto a sector that evokes immense passion is Tamil Nadu's thriving film industry. Last year, 202 Tamil films were made, second in number to the 215 films in Hindi. This means that there is a large potential market for support activities. Budgets aren't necessarily a constraint, as evident from the very famous Rajnikant starrer — Robot. The success of films like Endhiran, Ayirathil Oruvan, 7am Arivu is a reflection of customer taste and appetite for science fiction and computer graphics.

Combined with the high-quality technological talent available locally, the State can take leadership in becoming the preferred location for film-related support services. Given the cost advantage we can offer, I am very certain, that with the right kind of investment and marketing of services, the region can become a global office for animation and visual effects, including servicing Hollywood.

FOR SUSTAINABILITY

Tamil Nadu is one of India's most urbanised States; in fact, urbanisation in the State went from 34 per cent in 2001 to 48 per cent in 2011. The fallout is a negative impact on the environment — a rise in hazardous and biomedical waste generation, increasing vehicular and air population, and increase in energy demand. Tamil Nadu has the opportunity to become a role model for other States by adopting a ‘Sustainable Tamil Nadu Action Plan'. A starting point for this would be to develop a system to measure ecological performance, which can then be translated into economic and social terms. The measurement system must be built around the six forces of ecological competitiveness — Land, Energy, Water, Waste, Air and Carbon.

SMALL ENTREPRENEURS

We are a nation of entrepreneurs. Tamil Nadu accounts for the largest number of M5MEs in India (15.07 per cent) with 6.89 lakh registered M5MEs, producing more than 8,000 product varieties for a total investment of Rs 32,000 crore. The state is promoting micro and small enterprises by developing clusters under the Cluster Development Programme, which will catalyse growth. This could be a powerful driving force for the growth of Tamil Nadu.

(The author is Advisor to PM on Skill Development and Vice-Chairman, TCS.)

(Excerpts from a speech at ‘Connect 2011’, a meet on innovation and entrepreneurship, organised by CII, Elcot and STPI in Chennai)

(This article was published on December 23, 2011)
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