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Follow UsBANGALORE: Hyderabad has topped the Super 9 in Nasscom’s
ITES study. Popularly called Cyberabad, the city, has beaten the likes of Mumbai, Delhi,Gurgaon, Noida and Bangalore to be the hottest destination for IT Enabled Services (ITES)
in India. According to latest study by Nasscom on the competitiveness of the nine cities in India as ITES destinations, Hyderabad has emerged as the most competitive city for
ITES, followed by Chennai, Kochi, Kolkata and Ahmedabad. Bangalore, Mumbai, NCR and Pune complete the Super 9 of Nasscom.
Table 1.
Ranking of Super 9 on each factor
|
CITY |
Telecom |
Power |
Real Estate |
Manpower |
City Perception |
Entrepreneurship history |
Policy |
|
AHMEDABAD |
9 |
4 |
2 |
4 |
8 |
6 |
3 |
|
BANGALORE |
8 |
7 |
6 |
6 |
1 |
1 |
6 |
|
CHENNAI |
4 |
2 |
5 |
5 |
3 |
4 |
4 |
|
HYDERABAD |
5 |
3 |
3 |
2 |
2 |
5 |
1 |
|
KOLKATA |
6 |
1 |
4 |
3 |
7 |
7 |
5 |
|
KOCHI |
2 |
6 |
1 |
1 |
9 |
9 |
2 |
|
MUMBAI |
1 |
5 |
9 |
9 |
4 |
2 |
8 |
|
NCR |
3 |
9 |
8 |
8 |
5 |
3 |
7 |
|
PUNE |
7 |
8 |
7 |
7 |
6 |
8 |
9 |
The study, conducted in association with Netscribes on the competitiveness of nine Indian cities as destinations for IT Enabled Service companies, evaluated the top nine cities in the country identified as hot ITES destinations in India. The cities were assessed on factors such as manpower availability, real estate, telecom infrastructure, policy initiatives, power infrastructure, city perception and entrepreneurial history.
Nasscom President Kiran Karnik, said, "About 90 percent of all ITES companies in India are concentrated in nine major cities while others have not been able to attract more than two companies each. Our study reveals that despite a large number of ITES companies being based in Mumbai, NCR and Bangalore, these cities are facing increasing competition from other cities. Cities such as Hyderabad, and Kochi are emerging as attractive ITES destinations primarily due to rapid improvements in infrastructure (power, international bandwidth and urban transportation) and lower manpower costs due to lower cost of living and lack of alternative employment opportunities in these cities."
Table 2.
Highlights and Concerns of Super 9 ITES destination
|
Highlights |
Concerns |
|
|
Telecom |
Pune, Ahmedabad and Bangalore have direct international bandwidth. |
All cities expect Kolkata have tele-density in excess of 14%. |
|
Power |
The variance in the ranking comes due to the tariffs existing across |
Pune, Bangalore, NCR and Kochi experience pre scheduled power cuts. |
|
Real Estate |
Increasing real estate cost have pushed NCR and Mumbai down the |
There is a large variance in the rates within larger cities, for |
|
Manpower |
Manpower cost varies depending on the city's cost of living. The city's |
Manpower cost is as high as Rs 51.59/hr in Mumbai as compared to Rs |
|
Perception |
Perception plays an important role while deciding the location of a new |
Kolkata, Ahmedabad and Kochi lag behind in the IT initiatives |
|
Entrepreneurship |
Bangalore, Mumbai and Delhi have a large number of starts ups and have |
Kolkata, Pune and Kochi don't score very that high, as they don't have |
According to Nasscom, the ITES industry in India is experiencing the third wave of growth; both in terms of geographical areas of operation and services offered. A media release of excerpts from the study, stated, "In the first phase, the industry was dominated by captive centers of large multinationals such as GE, American Express, and Swiss Air who set up operations in leading metros of the country such as Delhi and Mumbai.
In the second phase, the growth of the industry attracted numerous entrepreneurs (in many cases, employees of multinationals who quit their jobs to set up their own ITES ventures) again in and around Delhi (NCR) and Mumbai (including Navi Mumbai). The third phase of growth has been more geographically dispersed — with new locations emerging such as Hyderabad, Pune, Bangalore, Chennai, and more recently, Kochi."
The third phase of growth has been driven by three factors, the first being the desire by state governments to attract entrepreneurship, which resulted in the former offering attractive policy environments and incentives. The second, on the rapid improvement in key infrastructure such as power, telecom bandwidth, and real estate in newer locations and the last being the need for ITES companies to lower operating costs (especially employee costs, and transportation)
"Given the potential of the industry to create jobs and generate foreign exchange,
Nasscom will actively work with the various state governments and ITES companies in order to create a conducive policy environment and a world class infrastructure to develop the ITES industry in different states", stated Karnik.
In order to assess the competitiveness of different locations, the relative importance of parameters such as telecom and physical infrastructure, IT orientation and policy support provided, each city was ranked on a scale of 1 to 10, in order of increasing importance. Weights were then assigned to each of the factors. The score for each city was derived by multiplying the rank for each factor with its particular weight and then dividing the sum total of all the factors for each city by the total weight.
The study also highlights the importance of qualitative parameters such as entrepreneurial culture and perception of policy environment. It is important to note that these are indicative scores and the attractiveness, or otherwise, of a city could also be a function of a company’s business mix and strategy. To illustrate, a company in the inbound call business would have to invest significantly in training its employees in accent neutralization, thereby offsetting the lower employee costs in a particular city.
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