Andhra Pradesh

Forming High Tech Enclaves

 Geography
ANDHRA PRADESH

HYDERABAD Vizag

Kakinada

Vodarevu

Bay of Bengal
Krishnapatnam

INDIA
Chennai
Bangalore
Chennai
The capital of Andhra Pradesh, known as the ‘City
of Pearls’ and ‘The Land of Nizams’ was
established in 1591 A.D Once known as a major
centre for diamonds (Kohinoor Fame) and pearl
trade, today Hyderabad is the hub of the
information technology industry. Home to many
UNESCO heritage sites, magnificent architecture
and the famous Tollywood industry, Hyderabad is
the heart of South India. A unique confluence of
culture and history on one hand and towering
skyscrapers filled with some of the best IT minds in
the country on the other makes Hyderabad the
elegant, charming city it is. The regal poise of the
Nizams who ruled this land for generations is still
reflected in the glorious old buildings around the
city and especially felt as one walks down the
cobbled bustling streets of Old City.
Marching resolutely into the future Hyderabad still
holds onto its roots of fascinating history, traditions
and culture through its breathtaking palaces, awe
inspiring forts and the imposing aura of royalty.
(Source: Harvard Model United Nations India 2014)
 Andhra Pradesh
• 2,75,000 Sq. km
• 976 km of coastline
• 80 million population
• Natural Resources:
Coal, Natural Gas, Lime Stone
• GDP $ 82 billion( 4th largest economy In the country)
Manufacturing: 29%
Services: 51%
Agriculture: 21%
“Everything comes with a price. Everything. Some things just cost
more than others.”
Examples of Emerging countries
Examples of Emerging countries
Examples of Emerging countries
 VISION 2020

Andhra Pradesh will leverage Information

Technology to attain a position of leadership
and excellence in the information age and to
transform itself into a knowledge society.
Stakeholder Analysis
How Attractive was
Andhra Pradesh?

1.Infrastructure
2.Government Support
3.Human Resource
Strategy execution
Strategy Formulation
Appropriate Inappropriate
Good

Success Roulette
Strategy Execution
Poor

Trouble Failure
Change tactic
 Going Forward
Would AP be sustainable in the future?
Any potential issues?
 A Decade from “Vision 2020”

1998 2008 Increase

No of IT Co. 194 1584 8 times
Employment 12,000 2,40,000 20 times
Exports ($ mil) 114.8 5224.4 45 times
Built up space 200,000 40 million 200 times
(Sq ft)
 Global Service companies

• Microsoft • Mahindra Satyam • GE Capital • Google

• IBM • Infosys • Deloitte • Yahoo
• Oracle • TCS • Dell • Amazon
• Qualcomm • Wipro • Bank of America • Face book
• Computer Associates • NCR • HSBC • UBS
• Motorola • Invensys • Accenture • Honeywell
• Nokia • Progressive • General Motors • Verizon
• CSC • AMD • Accenture • Cognizant
 Andhra Pradesh’s success
● Microsoft looks at Hyderabad as one of the most important centers
internationally.
- Bill Gates, Microsoft

● The Andhra Pradesh Government have been and continue to be extremely

pro-active in both encouraging and nurturing investment into the State.This
‘can do’ attitude has, in no small, way contributed to the success of HSBC in
Hyderabad and Visakhapatnam.
- Malcolm Wagget – COO, HSBC-EDP India

● "Andhra Pradesh has become one of the leading global IT centers because
of the talent of its business leaders, its workforce, and the strong support of
its government leadership.“
- Harris Miller – President IT Association of America
 Human Resource
Large pool of highly educated English
speaking graduates
1847- U.G.
Colleges 428,811 graduates/year
527- Engineering
Colleges 173,032 engineers/year
637-MCA
Colleges 43,045 seats/year
436 - MBA
Colleges 31,398 seats/year
174 - Polytechnic
Colleges 40,785seats/year
What does it require to become a
global outsourcing hub???

Low-cost labor
Good IT infrastructure
Favorable business climate
Political stability
English language capabilities

 Is that all?
Commoditization of IT! Bane or Boon?

• Standardization of IT services across products and

industries over time (Less client-specific)
• Increased global demand for low-cost technical skills
• But, competition and cost pressure have also
increased
• Bleak chances of any country to benefit since there
will always be a lower-cost option for clients (India-
>Ukraine)
 How to fuel/sustain growth?

Specific capabilities  Limit global demand

Generic capabilities  Increase global demand

 So the billion $ question is…

What should a nation do when in such a fix???

Well, like an obvious answer in such situations,

go for HYBRID!!!

“A combination of sufficient commoditization to attract

a large client base, and sufficient distinctiveness to
lower global competition”
Because a picture says a million words…
 Successful Examples…

• Russia: Pool of highly trained yet underpaid

mathematicians and scientists taking on sophisticated
analytical and scientific work from Western firms
• India: Pool of software engineers taking on labor-
intensive IT and software work for large client firms
across industries
• Philippines: Young population with American English
language capabilities suitable for call center and tech
support services catering to U.S. clients
 Contrasting Examples…
KENYA MOROCCO
Good IT Infrastructure Yes Yes
English Language capabilities Yes Not much
Time Zone proximity to Europe Yes Yes
Early mover Advantage Yes No
Wage rate Lower Relatively higher
Political climate Certain Uncertain
Any distinctiveness No French, Spanish
Competitors India, Philippines No