- Hari
The past several years has been good for Chennai & Tamilnadu, thanks to the efforts taken by the state government in attracting major automobile MNC and several IT/ITES companies. Its gives immense pride for a true chennaite like me on the very thought that my city is second only to Bangalore in IT/ITES space and one of the major automobile cluster of India.
But what I feel that the government has failed rather should have done is ‘branding the city’. The city scores high with a ‘low cost destination’ tag & when it comes to perception, Chennai looses to Delhi/Gurgaon, Bangalore & even Hyderabad. The reason is, we are NOT moving up the value chain.
In rupee terms, we have attracted more than 20000 crores of investment in the last 4 years alone. But on a close look, these investments have been spent on the ‘machines’ and other intangible things such as ‘land’ & not on the main factor of production ‘labour’. These MNC come here for the cost advantage & in any manufacturing companies the main factor of production is ‘Materials’ and ‘Machines’& perhaps the last emphasis is the ‘Men/Labour’ as most of the production is automated. In a way, the government is providing the employment opportunities but not really moving them in the value chain. Our employees still work under poor work condition, get the minimum wages or little more than what they could have got in the tier 2 or tier 3 towns. This is also evident in the frequently increasing labour unrest & formation of several labour unions. The management layer of these MNC are occupied by the expats (foreign nationals) and hence the profit from running these operations are either galloped by them or repatriated to foreign countries.
The sudden increase in industrialization has lead to migration of youth from smaller towns & smaller cities to Chennai. Those who are not willing to settle down for these low paying jobs end up in migrating to near-by cities like Bangalore or Mumbai or to gulf countries.
While it is good to have manufacturing industries since it helps in equivalent growth across the section of society (from helper to floor supervisor to production manager) the government should have given much more focus to service industries. For instance, in an IT company, more than 50% of the cost is spent on direct salaries & investment for any service company is nothing but their people alone. From recruiting employees, paying for their retention, staff welfare the cost of most of the service companies such as Banking, IT/ITES goes to employees. It’s just not service industries any labour oriented activites such as Consulting, R&D emphasis higher investments on labour. The service industries also create indirect employment like cabs & transportation, real estate, tourism & entertainment etc. We may be second in IT exports but again the product offerings are nothing but BPO/KPO, testing & maintenance activities which requires miniscule talent & thus they are low paying jobs.
Companies like Hyndai, Motorola, Nokia, Dell have their production facility in Chennai whereas their R&D centres or corporate office is either located in Bangalore or Hyderabad.
What we can do:
A state like Maharashtra has several global cities like Mumbai, Pune, Nagpur and government is keen on developing new world class Greenfield cities with all modern amenities. Gujarat does not have one metropolis but still is a leader in industrialization & several new cities are coming up on the Delhi- Mumbai industrial corridor. We should focus on developing multiple manufacturing clusters in Tamilnad & all manufacturing industries, IT/ITES which involve BPO, testing, maintenance activities can be shifted to those tier-2 cities. Those involve design, R&D, consulting, Application development should be located in big cities like Chennai or Coimbatore.
Tamilnadu still depends on the local talent. Though we have 250+ engineering colleges and several arts colleges, we do not have the quality of resources locally to attract industries across all sectors & all activities. The long term solution is to create a strong fundamentals like good primary & secondary education. But the short tem solution is to attract the talent across the country to Tamilnadu. Setting up world class technical institutions, business schools, foreign institutions (like the Virginia university near Puducherry) will allow influx of several students from different part of the country who can turn as potential workforce.
The state & Chennai in particular should turn to be ‘youngster friendly’ city allowing cross sectional society, multi cultered people.
A city like chennai if it has to be truly global city, should have more ‘knowledge parks’. These knowledge parks will have Finance, IT & R&D SEZ. More emphasis should be given to have their corporate office in these knowledge parks that’s where the creamy layer of the company will be situated. These knowledge parks should not be coming in the already congested city but on a new Greenfield city outside Chennai (Similar to Noida & greater Noida)
A higher emphasis should be given in creating a truly world class infrastructure. Instead of proposing elevated or BRTS corridor inside the city leading to land acquisition hassles & there by multiple court cases, we can instead have a new city with all these modern infrastructure, designated commercial & residential areas, place for the international school/college campuses, outside the city limits.
Chennai should host several high end business & investor summit, international sports event. The government should encourage more industries to have their product launch from here. For instance, the automobile show, auto racing shows, can be hosted in Chennai instead of Delhi since the city has the highest automobile production capacity. More fashion shows since Tamilnadu has a biggest textile cluster too (Tirupur & Coimbatore) Activities like this & much more will put Chennai on global map and helps in creating the brand for Tamilnadu. In a long run there is going to be a perception change.
More public- private participation should be encouraged. The government can have a ‘real estate’ specific policy so that more & more real estate players will come forward for infrastructure creation. Creation of private cities like ‘Lavasa’ near Pune, requires more private public participation. The promotion of these projects by these real estate player will automatically create the much needed publicity.
- Hariraam
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