Information Technology in Tamil Nadu

Information Technology has made its impact on several economies, in terms of both investment and return. In the last quarter century, the services sector has been on an ever expanding mode. By 2009, it increased its share to 64% of world GDP. Within the services sector, IT has shown appreciable growth. IT encompasses both hardware and software. They serve the domestic and export markets. It is software exports that give a major thrust to a nation’s economy. Throughout the history of software development and exports,
the world leader had been US. Among smaller nations, Ireland and Israel were in the forefront. In the last two decades, India has made giant strides in the IT industry as well as in software exports. During this decade, Tamil Nadu has successfully placed the IT industry on a secure foundation for growth and development.
The value of software exports may be taken as a fair measure of the success of software as well as of the health of the IT industry. For the growth of export volume and value, the existence of several conditions may be presupposed. High levels of educational excellence, a culture of science, priority investment in research and development, state patronage manifesting in incentives are among them. All countries with a record of success will confirm the correctness of this assertion.
Software exports
The software product markets worldwide was to the value of $2.7 billion in 1980. It grew to $30 billion in1990. From that year, global software exports started showing phenomenal growth. In 2008, it grew to $304 billion. Recession had its impact in the last two years, but signs of recovery are visible and a resurgence is expected in 2010. Forecast for 2013 is $457 billion. NASSCOM – National Association for Software and Service Companies - is the global trade body with 1200 members including 250 global companies from US, UK, EU, Japan and China. This body estimates India’s software exports to exceed $60 billion by 2013. It is foreseen that Tamil Nadu’s share of exports by the same year will be over $12 billion. It is likely that Karnataka with Bangalore as the Silicon Valley of India, will record $20 billion or more.`
Tamil Nadu
In recent years, Tamil Nadu’s rank in India has been second. Why not first or third? There is a history behind. She forfeited the first rank by failing to seize an opportunity that came her way. Texas Instruments ventured to take Information Technology to India in 1985. Two cities were selected, Madras and Bombay. The culture of education in the two cities and the levels attained were perhaps a factor. These two cities along with Calcutta had established universities in1857. Tamil Nadu also had the distinction of having produced by that time, the only two Nobel Laureates in Science. However the two cities displayed lukewarm interest. Thereafter, Texas Instruments prospected Bangalore, where the response was very positive.
Bangalore
There may a lie an explanation for this stance of Bangalore and the high performance that followed. Among many factors favourable in Bangalore, was the existence of a large scientific community. At the turn of the 20th Century, the city had the benefit of a futuristic development through the benevolence of Sir Jamshedji Tata. He took a decision to establish the Indian Institute of Science in Bangalore, which became functional in 1908. The culture of science that had developed around the Institute had radiated its benefits and influence in the city. Decision making capability in Bangalore had been exposed and sensitised to the world of knowledge. IT had come across very fertile terrain. In IT development and software exports, Karnataka stands pre-eminently first. Exports exceeded $16 billion in fiscal year 2008-09, while Tamil Nadu recorded $8 billion in the same period.
Acceleration
Tamil Nadu, though relegated for spurning the first opportunity, was swift in getting back to the main stream. The year 1997 marked a watershed in the development of IT in Tamil Nadu. To place the industry on a sound footing, the government formulated its IT policy. Tamil Nadu was the first state in India to do so and a multiplicity of actions followed. The industry, academia, trade chambers and banking institutions were swift in working out clear priorities and practical strategies.
Delivery of world class office space has been a crucial spur to the growth of the IT industry, particularly in the last 10 years. As strong challenges emerged with inter state competition, responsive support by the state government was quickly extended. One of the modes adopted was PPP-Public Private Partnership - under which TIDCO - Tamil Nadu Industrial Development Corporation - a state institution was established to promote industrial development. ELCOT - Electronics Corporation of Tamil Nadu - was set up to encourage the growth of electronics. Both the institutions acting in concert and supported by bank finance set up the TIDEL Park in Chennai. It has been operational from July 2000, providing 1.2 million sq. ft of office space to accommodate 12,000 professionals under one roof. The second TIDEL Park of 1.8 million sq. ft at Coiambatore is scheduled for opening by mid 2010. IT Parks are also coming up in Madurai and Trichy. In addition, heavy investment is also planned at Salem and Hosur. For spatial dispersal of IT industry, Tamil Nadu is among the foremost states.
In the growth and expansion of the IT industry, the production and delivery of human resources is of critical importance. In the last 12 years, a significant contribution has been made in Tamil Nadu by the educational system. Enhancement of quality to reach levels of excellence continues to be an objective of the industry and the academicians. Some of the states of India and principal cities are moving ahead in a spirit of competition. Tamil Nadu stands foremost in the proliferation of engineering colleges and the production of engineers. In 2005-06, there were 237 engineering colleges which enrolled 67,800 students. In 2008-09, there were 355 colleges which enrolled 122,900 students. The growth has been phenomenal and state patronage has been an impelling factor. The graduates from Tamil Nadu spread out to cities like Bangalore, Hyderabad, Delhi, Noida, Gurgaon, Mumbai, Pune, Kolkata and Cochin.

Infrastructure
Development of infrastructure is basic to the growth of IT. Attention to a few segments is inadequate. Development of the system is needed in its totality. Worldwide communication facilities are fundamental and these are being delivered. Statewide and inter-state connectivity are primary in a large country like India. Good tele density is another favourable factor. International air connectivity with the state together with intra-state air travel facility are a must. Seamless travel by road and rail is as essential. Besides all the components of physical infrastructure, facilities for human resources development had to be built. Heavy investments have already gone into all these areas. Scholarly studies by Indian Harvard scholars were made in the late nineties to place IT in TN on a futuristic course. With the advice of intellectuals, high end industry leaders and chambers of commerce, facilitation has been undertaken in a well integrated fashion. Results are now manifest. For fiscal 2008-09, despite the recession TN registered 29% growth in software exports while Bangalore’s increase was 23%.
In the last 10 years, TN had delivered over 40million sq. ft. of office space dedicated to IT. Investors and the construction industry have responded consistently to expanding demand. It is foreseen that the current decade will see a construction boom to meet exponential demand. Both the central and state governments have adopted policies to create a new investment climate to meet the challenge. The central government permitted 100% foreign investment for IT space and Chennai was the first location to utilize that opportunity. In a campus of 10acres at Ambathur, three blocks with a floor space of 2.5 million sq. ft. are being constructed with investment from Americorp-a foreign firm. The first block will be ready for occupation in the course of 2010. The campus will accommodate around 20,000 professionals at one location.
In a 1,400-acre industrial complex at Mahindra World City, 45 km from Chennai, Infosys has a massive campus dedicated to IT. More than half the campus is already operational and at full development will employ 15,000 professionals at a single location. Siruseri a village in the IT Corridor, 20 km from Chennai is now an IT hub. Tata Consultancy Services (TCS), the largest IT firm in India, with several facilities in Chennai is completing its biggest project in Siruseri. When fully operational by 2011, it will employ a workforce of around 20,000 at a single location. The project designed by Uruguayan architects and spread across 70 acres is being executed at a cost of Ind. Rs. 7.5 billion. At Tharamani, adjacent to Tidel Park, a prestigious IT complex called Ramanujam City is coming up. It encompasses an IT park, convention centre, residences, hotel, super markets etc., all on 4 million sq. ft. of floor space. It is being built by Tata Realty and Infrastructure Ltd. (TRIL ) along with partners, at Rs. 35 billion on 26 acres. The IT Corridor of 20 km, between Tidel Park and TCS complex, is home to 10 of the topmost IT firms in the country both local and foreign. This corridor dedicated to IT presents planning on a holistic basis, where issues pertaining to residence, workplace transport, world-class office space, educational opportunities, health facilities, marketing, recreation and entertainment are all being addressed. An eco system conducive to a flourishing IT industry is being developed.
FuturePrudence derived from the experience of other countries would suggest the choice of fields having optimum leverage without undue effort. IT has demonstrated its earth-shaking capability for wealth creation. India, though late in coming into the field, has created history. Similarly, Tamil Nadu too has displayed its capacity and is venturing for be top notch among the states of India. These would show that those higher in learning seek to make wealth the softer way through a more rewarding course. It is for a state to provide the facilitation to make the river flow speedily forward.