Kerala's IT Dreams: From Silicon Valley to Silicon Coast

The concept of a technology park to help small information technology firms come up was first introduced in Kerala in the early 1990s. The Technopark , situated in a Trivandrum suburb Kazhakootam, now has about 125 companies, generating about Rs 100 crore in annual revenues.

It’s not a big deal though. The reason is that Kerala, despite its early beginnings, lost out due to bad management and the absence of a growth environment. The rise of Infosys in Bangalore drew companies to that city, and Trivandrum, or for that matter Chennai, stood little chance.

Hyderabad and Bangalore were the giants in IT in south India, and after Gurgaon came up and wooed the big guys of the industry , there was little chance for the smaller cities, which had to make do with the left-overs.

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The 3,000 people employed in Trivandrum Technopark is at best an average number for a tech city. It poses little threat to the Bangalore-Gurgaon-Hyderabad troika.

Kerala is ideally placed for the knowledge industry to grow, due to the talent pool, great infrastructure, thanks mostly to tourism (a small town like Trivandrum alone has five five-star hotels) and comparatively cheap real estate.

So, in an effort to woo big IT companies and start-ups to Kerala and rejig the Kerala dream, the chief minister Oomen Chandy announced in Delhi yesterday the first Startup Village, a pubic-private partnership venture at the Kinfra Hi-Tech Park in Kalamassery in Kochi, with Krish Goplakrishnan of Infosys as the chief mentor.

Situated close to Smart City ,a special economic zone being built by Tecom, a unit of Dubai Holdings, the two projects together represent the most ambitious venture by Kerala to appropriate big space in the IT industry.

" The scale we aim is very high and the state will provide an unrivalled ecosystem for the IT industry. We dream of a day when the sun sets at dusk in Silicon Valley, it will rise to see the dawn of a Silicon Coast in India," Chandy said in New Delhi on March 27 in the presence of former Nasscom president Kiran Karnik.

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That dream has some basis in reality. The Startup Village will get 15,000 square feet of space at Kinfra Hi-tech park; in fact, the first 5,000 square feet is ready for launch. The idea is to get start-ups to set up shop in the park and then try to incubate the ones that gain traction.

Angel investors are expected to be part of the Startup village. “All ideas can be tried out here. Nobody knows what will work. We started on this project way back in 2006. At that time there was no YouTube, Facebook, etc. Now our lives have changed,” said Sanjay Vijayakumar , owner of Mobme based in Gurgaon, and one of the main movers of the Startup Village. There are a lot of Kerala entrepreneurs who work elsewhere; the idea is to bring them back home. The Nasscom Top 10 Emerging Companies of 2011 has three companies whose founders are from Kerala (MobME, Innoz and Wifinity Technologies).

The more ambitious Smart City project, which will be India’s largest business park, is spread over 260 acres with 8.8 million square feet of built up space. It is currently under construction and has the potential to employ close to 90,000 people.

The joint venture project between the government of Kerala (16 percent) and Tecom investments (84 percent) has already sent land prices in the Kochi suburbs skyrocketing. The park is about 20 kilometres from Kochi airport. Though it took six years of negotiations and disputes to finally get underway, Smart City, along with the nearby Hi-Tech Park, will convert Kochi into a major IT hub in the country.

Today there are two other smart cities, Dubai and Malta. Smart Cities are designed to help knowledge industries with state-of-the-art infrastructure and support systems.

In a couple of years , both these projects will become operational, changing the face of the IT landscape in the country. The question however is whether Kerala will be able to develop the type of growth environment required to sustain and let such projects grow.