KOCHI: In a profound analysis of the current global trends recently, Mr. Nandan Nilekani, former CEO of Infosys and Chairman of UIDAI identified two major shifts in the economic transformation of our time. First, a shift from manufacturing to services as a dominant form of economic activity and second, an equally important shift from physical capital to intellectual capital as the prime source of creation of wealth.
Nilekani argues that both these trends favour India’s rise as an economic powerhouse. What Nilekani did not say is that these two trends have a greater impact in the economy of Kerala than any other state in India. Quietly and without much fanfare, Kerala is building a robust economy on the twin foundation of services and intellectual property.
Entrepreneur magazine in July ranked Kochi-based Startup Village at the top among 100 Startup incubators in India. Earlier in February this year, President Pranab Mukherjee had declared Kerala as the first ‘Digital State’ in India.
What does it mean? It means that every Kerala village has high speed broad band connectivity. With more than 60% of the state’s population having internet access and with an incredible 95% mobile teledensity, Kerala leads all Indian states in digital connectivity. This is an astonishing transformation for a state that had resisted any kind of computerisation a mere quarter century ago. Today, the state is forging ahead as a major IT hub in India with an annual export of over Rs 10,000 crore. The success has come from a culture of innovation and some alternative vision. Kerala has thus seen the spread of a range of institutions and movements that have progressively led the state to become a more inclusive society.
Take ‘Kudumbasree’ which has tapped into the entrepreneurial talents of ordinary women in Kerala, becoming Asia’s largest women’s enterprise involving 41 lakh female participants. Kudumbasree has generated an amazing number of women’s businesses ranging from artisan shops to she-taxis and won several prestigious honours including the UN’s ‘We the people’ award and might well be in the queue for the Nobel Prize.
Or take the equally ambitious literacy movement in the state. What began as a one-man initiative by the late Sri PN Panickar to set up reading-rooms in a few villages slowly evolved into a sprawling network of over 6,000 rural libraries, launching a literary revolution and laying the foundation for a vibrant knowledge society in the state.
From the workers in the Gulf to the nurses who keep the flame of life alive in hundreds of hospitals across the world, Kerala’s young men and women have a global reputation for combining competence with creativity.
There are other luminous stories. Kerala continues to be the Ayurvedic capital of India, and has combined this primacy with its success in tourism to create huge opportunities in medical tourism. Inaugurating the Global Investors Meet at Kochi in 2003, the then Prime Minister Atal Bihari Vajpayee observed “With Kerala’s traditional strength in Ayurveda and the global goodwill that your nursing community has earned along with the growing opportunities in medical tourism, I imagine that healthcare should be Kerala’s core competency as much as information technology has been for India as a whole.” That remarkable insight was never followed up to its logical conclusion.
Apart from these mainstream movements, there have been individual projects that have captured the imagination of the world. The Cochin International Airport is the first of its kind built on private-public partnership. More than 10,000 Non-Resident Indians have come together to fund the project. It has also now become the first airport in the world to be totally powered by solar energy.
Kerala has also become the first state in India to set up an Electronic Development Corporation. The dream of its founder K P P Nambiar was to turn the state into another Taiwan as a major hub for the manufacture of electronics components. That dream faded away somewhat with the militancy of Kerala workers and political meddling, but Trivandrum Technopark will always remain as a shining glory of Nambiar’s vision.
While the Gujarat model with its focus on large scale industries is widely commended, Kerala’s successes in creating a services-led economy through innovation and disruption have received far less recognition. Nilekani’s refreshing thoughts should bring the spotlight back to Kerala.
(The writer is the Director of Indo-Australian Chamber of Commerce based in Chennai)