Over the past few years, the city of Hyderabad has shot to international fame. From IKEA’s first India store to Amazon’s largest campus in the world, Hyderabad has been the go-to destination for many global corporate giants, especially technology companies.
In fact, in the second half of 2019, Hyderabad raced ahead of Bengaluru in terms of office space absorption. According to a Knight Frank report, the Hyderabad office market saw great demand in 2019, accounting for 12.8 million sq ft in terms of transactions, nearly twice its previous annual high.
Hyderabad was also at the top spot as the best city to live in as per the Mercer’s Quality of Living (India) Rankings 2019. Hyderabad was also selected among the most creative cities in the world for its gastronomy.
TNM spoke to Jayesh Ranjan, principal secretary for IT and Industries for the state of Telangana, who believes that the growth of Hyderabad has been by design, something that has happened over a period of time through planned effort by the government.
Here are excerpts of the interview:
Hyderabad has seen tremendous growth as a destination for technology and IT companies. What role has the government played in this?
The government reaches out to those companies that are not present in India or in Hyderabad. For example, when we go to places like Davos, we try to identify those companies that don’t have any presence in India and tell them about India and within India, tell them about Telangana and Hyderabad.
So, we have a very proactive outreach strategy wherever we have a chance.
If you actually ask companies that have come here, set up and grown and expanded, what their key driver is, they will tell you a few reasons, most of which is because we have played a positive role and a proactive role in that.
For example, companies say that infrastructure value proposition is best in Hyderabad in terms of cost, quality, etc. The government has played an important role in creating all of that. The airport, the outer ring round, the elevated expressway, townships, social infrastructure in the city - all that has happened over a period of a planned effort by the government.
What else has the government done, beyond infrastructure?
Companies also appreciate the availability of talent and the cost at which they are available. Again, that is something that happened through design.
For example, I'm now the Vice-Chancellor of Jawaharlal Nehru Technological University (JNTU) and I understand our education system much better now, having been there for almost eight months now. The basic engineering talent in this state comes from across 300 colleges and we have given a lot of autonomy to these colleges. They are encouraged to introduce new courses with a lot of flexibility and there is support from us to introduce better courses.
Then the government itself has created a new institution called Telangana Academy for Skill & Knowledge (TASK). So, if there is any skill not being offered by colleges that the companies are looking for, then TASK can step in and teach those subjects.
In fact, every year over 30,000 students go through some of the top courses, and eventually,these are the students that end up working in good companies.
What are some of the major incentives offered by the government to these companies?
Incentives are very minor. And most of the large companies are not even bothered about these incentives. Suppose you tell an Apple or Amazon that I'm giving some incentives, they will laugh at you because they're not incentive-driven companies.
So, incentives are not a big factor and work only for small and mid-scale companies. Large companies that make newspaper headlines don't take any incentives from the government.
Hyderabad is always compared with Bengaluru. Do you still see Bengaluru as competition, or do you think Hyderabad has created a safe niche for itself?
Hyderabad has definitely created its own space. But at the same time,the legacy of Bengaluru is very, very strong. That we cannot ignore. In fact, many people we meet internationally, their understanding of India and IT in India is confined to Bengaluru.
But it is also a fact that when they look into what cities have to offer in terms of infrastructure and talent, then their preference towards Hyderabad becomes very strong.
They also find that the government is very responsive here. In other places such as Bengaluru, Gurgaon and Chennai, the experience of companies in dealing with government has been very, very difficult. In fact, that has given an overall impression in the IT industry that if the government stays away from companies, that is the best they can do to them.
But their impression of Hyderabad is just the opposite. They find that the government is very responsive right from the ministers to the junior officers. If they have to meet anyone or raise some issue there, they have that forum and wherewithal to do so and get a very positive resolution of their issues. There is no time delay at all.
Beyond the government, what makes Hyderabad stand out from other cities?
Another thing that has become particularly important in the past 2-3 years is the opportunity to participate in and benefit from an innovation ecosystem. And most companies today want to engage with startups, encourage young entrepreneurs, and create a community of developers. So, for these kinds of things, Hyderabad is a great place because all these engagements are very structured here.
There is T-Hub. If they want to start a corporate innovation program, they just have to go there and within one hour, their program will be in place. Everything is friendly and seamless without any hassle.
But in a city like Bengaluru, if a company wants to run a corporate innovation program, they will really struggle on how to find startups, where to good programs, etc.
We have so far spoken about technology and IT. But what about other sectors? Is Hyderabad attractive for other sectors as well?
Life sciences is another sector that is huge in Hyderabad. So, we are very keen to ensure that that superior position is maintained in the future as well.
Another hi-tech sector that is very important is Defence and Aerospace. Hyderabad has become the go-to destination for that as well. So, any new aerospace company which wants to do R&D, design and manufacturing - they're all selecting Hyderabad.
Financial services as a sector also has a strong tech part and that already has a deep presence in Hyderabad. Some of the biggest BFSI and financial service companies, have their tech centres located in Hyderabad.
Given the journey Hyderabad has been having, where do you see it in the next five years?
The logical extension of what we are already doing. One is that we want to promote more clusters so that the liveability of the city remains intact and dispersion of economic activity will take place.
Second is skill. There are emerging technologies, and our youth and students need to know quite a lot about these new technologies. We want to be able to offer them all of that.