?Government should develop Indore as IT hub?
IT MAJOR Impetus Technologies Inc chief executive officer Praveen Kankariya feels that the State Government needs to have a pinpointed focus to develop Indore as a model city for IT industry and then replicate the same in other cities like Bhopal and Gwalior.
Kankariya, who did his B.E from SGSITS and built Impetus from Indore, in an exclusive interview to Hindustan Times during his recent visit here said, “The problem is that government is focussing on the entire State (for promoting IT) which is diluting the effort,” he said. Madhya Pradesh needs to follow the successful model of states like Karnataka and Andhra Pradesh to become an IT power, he feels.
Now headquartered in California, USA, Impetus is one of the fastest growing IT companies today having a 600-employee strong development centre in Indore, a 200-employee centre in Noida, another centre in Hyderabad besides centres in the US.
In a statement that should set alarm bells ringing for State Government, Kankariya said the company’s Noida centre was growing faster than Indore and he expects the critical mass of Impetus to shift outside Madhya Pradesh “pretty soon.”
The biggest problem before IT companies in Indore is that of manpower crunch, particularly at the managerial level. Indore at present has around 1500 IT professionals, mostly junior level.
“We grew at 75 per cent last year, but the customer-generated demand was probably 100 per cent, so we probably left 25 per cent on the table for lack of very qualified people,” said Kankariya.
“The basic problem that we face today is how to create the momentum (in Indore), but there is no one solution and infrastructure is just part of it,” he said.
Elaborating, he said it was like chicken and egg situation wherein big IT companies are reluctant to come to Indore because they are worried about infrastructure and IT professionals are also hesitating to move in because there are just a handful of companies.
Impetus Senior Vice President Pankaj Mittal, who was also present, said “If we look at cities like Pune, Hyderabad, Bangalore and even Trivandrum, the governments there focussed on developing these cities and attracting IT companies before they moved on to other smaller cities.”
“We need to make Indore better than these cities to attract the young population”, says Kankariya adding “anybody who works in IT sector already is in upper middle class society and they should like the place. Right now if somebody comes from Pune, they are disheartened by the drive from (Indore) airport.”
Then there is the connectivity problem, says Mittal. “We don’t have direct flights from Hyderabad and other major cities and there are very few trains. Now, we have people from Hyderabad working for us in Noida, but they don’t want to come here because of poor connectivity.”
Talking about success of Pune as an IT hub, Kankariya said, “the theory which works in this whole thing, which the policy makers need to realize, is that intellectuals want to be in a cluster.”
Elaborating, he said, lots of policy makers feel that just because a city has lower rent, lower cost of real estate, people would be attracted but that is not the case. “Even in the US,” he said, “the IT industry is concentrated in just three geographical areas – Silicon Valley, Boston and outside of Washington DC.
“A mid-size house in Silicon Valley costs one million US dollars, but why are people flocking there? People want to be around other smart people. I think that we are missing out (in Indore),” he said.
Kankariya also expressed concern over the plight of other IT companies in the City. “There are probably a dozen (software) companies in Indore who have good business, but they can use some institutional help to grow. Banks will not lend any money to a software company until they have assets and in software business you don’t have capital equipment,” he said.
So what is the solution? “I think an investment of Rs 100 or 200 crore by the Government can light up a lot of fire,” says Kankariya adding the State government can partner with a venture capitalist and also buy equity in the startups.”
Impetus’ success lies in the fact that it has grown despite the government policies, not because of it. Although the company is keen on getting space in IT Crystal Park being developed by the State Government in Indore, Kankariya is completely exasperated with the whole process and is keeping all his options open including building an IT Park on his own.
“We are waiting for the budget, which can have some affect on the IT policy, before taking any decision on developing our own IT Park,” he said.
The company has recently hired 250 fresh graduates and again set a target of 75 per cent growth for 2007, “but there are a lot of things beyond our control so we’ll see how it works,” says Kankariya in his modest style.