Kerala

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Kerala

Emerging Technology Hub
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In the 90s, the global technology landscape
was profoundly altered.
Underlying this change was the convergence of
communications and computation and the
extraordinary range of exciting new hybrid
technologies disciplines that this
convergence spawned.
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At the core of this transformation was the
Information Technology revolution, leading to
the emergence of a new Knowledge Society
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India Inc. - The Metamorphosis

• By FY 2002
• India had
• established
• itself as the
• undisputed
• frontrunner
• in software
• services
• and is set
• to be the
• preeminent
• IT sourcing
• hub in Asia,
• as service lines
• become
• commoditised
• and off-shoring
• becomes

By FY 2008 at current rates of growth, India is
expected to be among the top 3 countries in
the world in IT revenues, after the US
Japan.
The 90s also saw the global technology map
being reshaped. By Y2K, India had emerged as
the dark horse of the global IT industry.
Between 1992-2002, the Indian IT industry grew
at a scorching pace of 43 every year making
it the fastest growing industry worldwide.
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India Inc. - The leading Global IT/ Technology
Sourcing Hub
Pre-eminent destination for cross-border IT
services
Culture for Services
Location attractiveness
Leading global ITES (BPO) hub for
high-value activities
Long term sustainable competitive advantage
Strategic product Development and RD base
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Core Competencies in New Technologies
IT Core competencies
2nd largest pool of scientific/ technical talent
2nd largest English speaking manpower after USA
Development costs in India average 40 less
than US
High quality of service delivery
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India - The pre-eminent South Asian destination
for IT/ITES
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Core Competencies in New Technologies
BT Core competencies

• Output of graduates in Life Sciences amongst the
  highest in the world
• Network of world-class RD institutes frontier
  research
• Rich local knowledge repositories and advanced
  legacy health care systems
• Diverse and spectacular biological gene pool,
  including extant tropical rain forests

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Core Competencies in New Technologies
ICE Core competencies
Largest entertainment industry in the world
Highest number of movies made
Media expansion absorption rate among the
fastest growing worldwide (both depth of
penetration range of spectrum coverage)
Natural location of choice for multimedia,
animation digital content
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India Hub for New Technologies
Information Technology is the platform and motor
for the new Transformational Technologies of
the future
India with its advanced cutting edge technical
capabilities is poised to become the prime hub
for the New Technologies of the Knowledge
Society
Kerala at the extreme south is Indias true
Knowledge Society with 100 literacy, advanced
HDI widespread technology diffusion
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Kerala, India
Backdrop
The States Value Proposition
Competitive Advantages
Industry Overview
Growth trends and prospects
Governments Role
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Kerala The Knowledge Hub of India
Universal literacy
HDI comparable with west
Highest density of Science Technology Personnel
Large base of knowledge workers
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100 Digital Kerala
National ILD Hub
100 of telephone exchanges digital
Universal OFC connectivity across State
1st wireless district in the country
Highest telecom density
Cochin Communication Hub SEA-ME-WE-3 SAFE
cable landings abundant bandwidth
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100 Digital Kerala
Multiple, redundant backbone service provision
through BSNL, Reliance, Bharti
70 of Indias data traffic flowing through
Cochin
Cochin
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Kerala - Competitive Advantages
State in Human Development Indices (HDI) by
Planning Commission, GoI April 2002
State in Technology Diffusion Index, April
2002
In terms of Peaceful Pristine Environment
State in Law Order and stable political
environment, Sept. 2000
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Kerala - Competitive Advantages
CII Study How the States are doing, September
2000 Kerala Karnataka Tamil Nadu A P
Mrashtra Delhi Parameters General Achievement
6 15 13 12 7 4 Infrastructure
Penetration 5 12 4 10 11 1 Finance 6 7 4 10 2 1
Labour 8 11 1 3 4 9 Social Sector 2 10 4 13 6
1 Law Order 1 10 8 12 9 11 Affluence 3 7 11
12 5 1 Education, Heallth Expenditure 1 8 5 12 4
3 Investment Attractiveness 5 10 6 8 3 1 Overall
Composite Rank 3 10 6 12 5 1
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Governments role to ensure success for the IT /
ITES industry

• Key Initiatives by Indian Govt.
• Assign priority sector status to ITES
• and provide a debt-funding operation
• Ensure consistency in taxation policy
• Remove clause that prohibits change
• in ownership of beneficial interest due
• to denial of tax benefits
• Remove key product-market barriers in
• high IT consulting sectors, i.e., retail,
• telecom and retail banking
• Appoint one nodal agency as the
• clear owner of e-governance initiatives
• Ensure availability of required infrastructure,
• i.e., national expressways, airports, telecom
• connectivity etc.
• Establish a body comprising industry,

Expedite unfinished agenda in regulation

• Key Initiatives by Kerala Govt.
• Labour law issues addressed to enable
• 24x7x52 service
• E-governance a priority - long term
• IT architecture and roadmap for
• implementation
• Availability of adequate civic
• infrastructure
• Major infrastructure thrust
• Encourage and promote English

Drive growth of domestic market
Proactively address infrastructure and talent
issues
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Kerala - Visionary Reformist Government
Initiatives

• Key Government thrust areas Examples of
  specific actions
• Creating a pro-enterprise, Comprehensive
  overhaul rationalisation
• regulatory framework of labour laws.
• facilitating investment
• Single window for IT/ITES 1st custom-made
  regulatory framework for 24 x 7 x 52
  IT/ITES operations.
• Establishing Kerala as a IIITM-K as Regional
  centre of excellence
• global centre for excellence Focused training
  for BPO ITES.
• in HR Exclusive ITES habitat in Cochin.
• Educational Grid for e-Learning.
• International Business School at Cochin.
• Establishing internationally 100 Digital
  Kerala initiative launched.
• competitive IT infrastructure Dedicated
  E-governance Grid.
• environment Carrier Neutral Facility.
• International consultants for Master Plan
  Business Development.

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Regulatory Framework Implementation of
Government Initiatives
Area

• 24x7x52 service by declaring the ITES sector
• a public utility service' under the Industrial
  Disputes Act, 1947.
• Allow women and younger people (in the age group
  18-21 to work at night.
• Allow flexible working hours and staggered
  timings.
• Permit use of contract/part-time employees. On a
  continuing basis.
• Facilitate termination of services with fair
  compensation.

Labour Laws

• Facilitate single-window clearance for
  establishing an ITES unit in the state
• Allow ITES companies to repatriate money abroad
  for sales and marketing
• by removing requirement for inward remittances
• Reinstate benefits with respect to remuneration
  received for services rendered
• outside India under Section 80 RRA of IT Act

Procedures
Others

• Assign priority sector status to ITES and provide
  a debt-funding option
• Kerala Venture Fund established for start-ups
• Business and Technology Incubators

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Keralas Value Proposition
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Industry Overview
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Industry Overview. Services

• Legacy System Evolution (5 Companies)
• Web Enabling
• Porting/Conversion
• Development, Maintenance
• Business Applications (13 Companies)
• Custom Projects for Banks/ Insurance/ Health/
  Shipping/Travel/Retail
• Internet Technologies (15 companies)
• Enterprise Network Solutions
• Web Design Hosting
• Web Based Multimedia
• Intranet Based MIS
• E-Business Colutions

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Industry Overview. Services

• Telecom (3 Companies)
• Transaction Billing Solutions
• Maintenance Application Development
• Embedded Systems (4 Companies)
• Board Support Packages (BSPs) Device Drivers
• Real-time Operating Systems
• Firmware Development Services
• Assembly, C C Embedded Java Programming
• DSP Firmware, Software Algorithms

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Industry Overview. Services

• IT Enabled Services (7 companies)
• BPO including Online/Offline Processing
• Call Centers
• Medical/Legal Transcription
• GIS
• Animation (3 companies)
• 2D/3D Animated Content for Films/ Advertising/
  Education
• CAD/CAM Services (7 companies)
• High-end Design Modeling

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Platforms

• IBM Mainframe
• COBOL, Assembler, PL/1
• DB2, CICS, IDMS, IMS, WAS
• Client-server
• Oracle, SQL Server, Informix
• VB, Delphi, C, C, VC, Power Builder
• Linux
• Web Technologies
• Java, .Net, XML, EJB, Websphere

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Key Clients

• North America
• Sun, IBM, Cisco, EDS, Costco, Safeway, Toys R
  Us, Alstom, PriceWaterhouseCoopers, Convergys
• Japan
• Hitachi, Toshiba, NIT, Mazda, Yamaha, Yazaki,
  ISO, Deutsche Bank
• Europe
• Shell, European Space Agency, Dutch Ministry of
  Transport, KPN, EDS, Philips, KPN/Dutch Telecom,
  Motorola, Siemens, IBM, IMG, Swissair

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Leading global players leveraging Keralas
services capabilities
Company
Description
Swissair
The IT subsidiary of the Swissair Group, IBS has
a 400-person captive ODC in Kerala focusing on
providing solutions for airline businesses,
airport operations and cargo handling.
US Technologies
Has an Indian subsidiary, US Software, which
offers IT solutions to 12 Fortune 500 companies.
Comcraft
Has set up Toonz Animation which does work for
Pepsi, Coke and Nestle. A Global award winner in
animation and digital content, Toonz is the 1st
digital studio in India.
Hays Doc
Has set up a support center for its European
document management operations.
24x7Customer
Customer services for 1 of the top 2 global
financial long-distance telco car rental and
hotel chain companies.
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Aggressive growth by ITES companies in Kerala
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Endorsements
A lesser known aspect of Kerala is that below
the lush green landscape and serene backwaters
lie a plethora of optical fibre cables that
service two-thirds of Indias entire data
traffic CB Richard Ellis May 2002
"This is an exciting concept. IT is a crucial
element of the future, both in the private
sector as applied to Government. If Kerala can
marshal its current advantages and market them
successfully, the future will be
bright." Ambassador of USA to India February 2002
Kerala is the best-networked state in the
country and offers the best possible
connectivity. Keralas new IT policy is a
radical one. The special attention to the ITES
industry is a particularly welcome
move. NASSCOM December 2001
Technopark offered complete facilities,
state-of-the-art communication and an inspiring
ambience. We were fully operational within six
months of our decision. The added plus for us
has been the wealth of talent in Kerala. We're
delighted to be here." Toonz Animation January
2000
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The People Factor

• Capability of Workers
• Qualification/capabilities
• Foreign languages,
  
  primarily
  English
• Quality of work/work ethics
• Cost differential

Ireland
Singapore
High
Australia
Holland
Hong Kong
UK
Kerala
India
Philippines
Mexico
Low
China
High
Low
Capability of Workers
Source NASSCOM-McKinsey Study
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The Infrastructure Factor

• Location Attractiveness
• Infrastructure
• Communication
• Basic infrastructure

Ireland
Singapore
Australia
High
Holland
Hong Kong
UK
Kerala
Trivandrum, Kochi Rated as 2 and 3
respectively. Best cities in India to do
business in Business Today Study (Dec 2001)
Philippines
India
Mexico
Low
China
High
Low
Source NASSCOM-McKinsey Study
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Keralas Position
High
Ireland
Singapore

• Location Attractiveness
• Infrastructure
• - Communication
• - Basic Infrastructure
• Country Risk/FDI Incentives
• - Attractive Incentives
• - Political incentives
• Time Zone Attractiveness

Australia
Holland
Hong Kong
UK
Kerala
Philippines
Location Attractiveness
India
Mexico
China
Low
High
Capability of Workers
Low
Source NASSCOM-McKinsey Study
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Kerala - Key Benefits

• A Bouquet of Services from ITES to Embedded
  Systems.
• Reliable and redundant data connectivity options
• Good air connectivity with USA/Europe Singapore /
  Middle East
• Stability of operations
• Lowest employee attrition rates in India
• Kerala rated 1st in Law Order in India
• Stable Government, stable policies
• Risk of natural disasters/war minimal
• Green environs, soothing ambience One of the 50
  must-see destinations of a lifetime - National
  Geographic Traveler
• Excellent local manpower pool highest HDI in
  India
• Excellent HR practices

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Kerala - Business Opportunities
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Kerala
Emerging ICT Hub
in South Asia
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• Thank You