India’s IT growth story finds new frontiers in smaller cities
State government incentives, availability of trained manpower and vacant tracts of land are driving this growth.Updated: Jul 29, 2019 14:43 IST
Think tech hub and you think Bengaluru, Gurugram, Pune, maybe Hyderabad. That map is fast expanding. Smaller cities are attracting major IT and ITeS companies, says Anuj Puri, chairman of Anarock Property Consultants. “Among the emerging cities that are seeing demand from IT majors are Kochi, Lucknow, Chandigarh and Indore,” Puri says.
The main factors driving this demand are state government incentives and land availability. Availability of talent and increased investor interest are factors too, as is the saturation of the top tech cities. “Growing infrastructure in smaller cities that are also state capitals, is helping drive this change,” Puri says.
Education hubs have an immediate advantage, says Rohan Sharma, research head at Cushman & Wakefield India, a real-estate research firm. “Cities like Lucknow, Chandigarh and Kochi have a ready pool of trained students that companies can draw from.”
State government incentives for tech parks and startups is helping. The Kochi government in January opened an integrated startup complex where several tech companies have since set up shop. Similarly, Lucknow has been wooing IT companies with the help of incentives offered by the state government.
There’s an entrepreneurial ecosystem thriving in the smaller cities, says Sharma. “Lucknow has several new co-working spaces that act as sort of incubators for entrepreneurs who might have otherwise shifted to one of the metro to start their businesses.”
Some of prime metro cities are witnessing increased growth too, driven by demand for space from tech companies, says Samson Arthur, Hyderabad branch director at Knight Frank India. “Parts of Chennai and Kolkata have seen several IT parks come up,” he adds,
Amid vacant land parcels in the smaller cities, plans for special economic zones are driving growth. “The key factor is manpower. State governments are eager to generate employment opportunities, and so are wooing ITeS,” says Pankaj Kapoor, managing director of Liases Foras.
Respective state governments are learn lessons from the shortcomings of the top-tier cities (Bengaluru, Gurugram, Pune) and planning developments accordingly, Puri adds. For instance, the Uttar Pradesh government is stressing the need for sound infrastructure within the cities of Lucknow and parts of Noida, so that as more companies set up shop in the state, the growth model remains sustainable.