Wednesday, September 16, 2009

NASSCOM's take on the wheel

While Kerala has spinning the wheel, almost literally, and counting its collection of hubs and spokes, NASSCOM has given its verdict on the strategy in our sister State. No prizes for guessing which one, West Bengal. Blaming it only on the most evident common factor - communism - is incorrect but Kerala and West Bengal have followed curiously similar and similarly unsuccessful paths in developing the IT/ITES industry.

Kolkata is the third biggest city in India (after NCR and Mumbai) but it is just the seventh largest IT/ITES destination in India and by some margin indeed. Interestingly it is now trailed by Trivandrum which is about 50% of its business volume in terms of the IT industry despite being less than 10% of its size and population as a city. The WB Government has also been looking to develop its Tier II cities such as Siliguri and Haldia as IT/ITES hubs even as Kolkata gets left further behind by the leading cities such as Bangalore, Chennai, NCR and Pune.

Now NASSCOM has asked the Government to prioritize its development approach and focus on Kolkata, at a NASSCOM CEO meet.

NASSCOM President Som Mittal said, "First, we have to saturate Kolkata, then only we can think about other IT satellite townships in Durgapur and Siliguri. There is enough space in Kolkata, and large IT companies should get land there."

NASSCOM's past President Kiran Karnik first suggested the "hub-and-spoke" model in 2007 at Technopark, now his successor has clarified that the model needs to be developed only after the hub itself has become well established.

I wonder if anybody in the rungs of power are listening......?


  1. Hi Ajay,

    The funniest thing about the Kerala "Hub and Spoke" thingy is that we do not apply it for the sector the name was originally coined for - Transportation. I am not even sure what Hub and Spoke mean for IT - honestly. It might make sense for an organization like Infosys - have spoke development centers for a hub - but for infrastructure development?

    And if the government needs to learn something, it could learn from its past "strategy".

    The one that failed:
    industrial development - Ignore Cochin, Trivandrum, Kannur etc, and then make Panchayat level "Industrial estates". For our IT Technolodges, the government could just rename the Panchayat Industrial parks as Techno-lodges.

    The one that succeeded:
    Tourism - Tourism in Kerala is still for the most part around 2 "destinations" - Kovalam and the backwaters - Cochin circuit.

    The thing that I worry most is that the government might be persuing a strategy that it knows it is doomed to fail, because it wants more to be "original" than successful.


  2. Vinod - Mr. Najeeb of the Great India tourism group pointed this out at the CII event on IT in Kerala. I sure hope that even if we don't learn from our mistakes we will learn from the few successes that we have had.


Thanks for your comment, I will take a look at it and put it up at the earliest.