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Tier II cities - The next IT destination

By Binu Paul, SiliconIndia | Monday, 22 November 2010, 17:54 Hrs | 24 Comments

Tier II cities - The next IT destination

Bangalore: As the Indian information technology industry is growing in a record rhythm, the smart players in the industry are looking at tier II cities are their new business destination where a major employable talent lies untapped. Interestingly, various studies off late indicate that the new generation of students from tier-II cities are better employable and more competitive than the students of tier-I cities.

A new study by Aspiring Minds, a recruitment assessment firm, indicates that in Tier-II colleges 47 percent of students are employable in IT product, 16.4 percent in IT services and 8.26 percent in Knowledge-Process Outsourcing (KPO) where as in tier-I campuses, only 10 percent are employable in IT product companies and 29.4 percent are employable in IT services companies. The study also notes that BPO and technical-support-job employability do not change much in tier-II colleges as compared to Tier-I colleges. Against the popular belief, students in tier-II colleges, show a gap in number skills and not in English.

Many of the multination companies are planning their Indian expansion eyeing the developing tier-II cities. Most of the Indian IT giants have already started their operations in tier-II cities. Chandigarh, Pune, Visakhapatnam, Vijayawada, Mangalore, Mysore, Kochi, Coimbatore, Madurai, and Tiruchi are the major tier-II cities witnessing rapid growth overall in information technology.

Infosys has already established its units in tier-II cities like Mysore, Mangalore, Kochi, Bhubaneswar and Chandigarh. Seeing tier-II cities are a huge opportunity for providing IT solutions at an affordable cost, Microsoft has decided to focus on the untapped talents in tier-II cities. It should also be noted that, as of now, a total of 51 STPI centers (Software Technology Parks of India) and sub-centers are operational across the country out of which, 44 are located in Tier I and II cities.

Earlier the U.S. Under Secretary of Commerce for International Trade, Francisco J Sanchez had opined that the United States is keen to tap business opportunities emanating from Tier II and III cities like Pune, Nagpur and others. The U.S.-India Business Council (USIBC) and the Confederation of Indian Industry (CII) are also working together to explore and grab the business opportunities in Tier II and Tier III cities.

In order to get more global business to tier-II cities, the basic infrastructure like roads, air and rail connectivity should be ensured. Quality commercial space and uninterrupted power supply, water, data connectivity should also be provided for. Apart from these, the government should also ensure adequate social infrastructure such as educational institutions, hospitals and shopping places along with other kinds of leisure such as restaurants, theatres, and sports facilities.

As the government of India is planning to slash down the broadband access cost considerably and hopes to connect every single Panchayat with high-speed broadband by 2012, the IT penetration to tier-II cities will be ever high in the near future. The increased presence of IT industry will improve the overall quality of life and amenities like education and healthcare in these cities.

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