COVID-19 has hit Kerala hard, but there are big opportunities: IBS Software founder V K Mathews

Mathews, who is a key member of Kerala's HPDAC, feels the state can use the adverse situation to its advantage through some out-of-the-box strategy to attract investments and create jobs locally.
IBS Software founder and executive chairman VK Mathews
IBS Software founder and executive chairman VK Mathews

KOCHI: V K Mathews, founder and executive chairman of IBS Software, and a key member of Kerala government's High Power Digital Advisory Committee, feels though Covid has turned out to be the biggest crisis of our time, Kerala can use the adverse situation to its advantage through some out-of-the-box strategy to attract investments and create jobs locally.

Q. How do you analyse the COVID situation in terms of the loss of business/investments from a Kerala perspective?

A. We need to put the entire thing in context. Covid-19  without a doubt is the biggest crisis of our time. The global GDP is expected to contract drastically and the travel and tourism industry will be the worst impacted sector. No sector, you name it -- automobile, energy, retail -- have been spared. We expect a huge drop in the GDP from 5 per cent to minus 3 per cent for India in 2020-21. In the Apr-Jun quarter, the growth is expected to contract 14 per cent.

Q. You mean, simply no economic activity.

A. Yes. We are consuming minimum food, not shopping, not going out to dine,  not going for movies. In the new emerging scenario, there will be major changes in the way business will be conducted.

Q. Can you elaborate?

A. I see two significant changes. Every business will now be technology-enabled. Rather, boundaries between business and technology will be blurred. We will rely on technology for just about everything and work from home will become the norm. People will travel less, consumer spending will come down. Another major change will be that people can work from anywhere, that's, someone based in Kerala can process insurance claims of a person in West Asia. This is a huge advantage for Kerala if we can take advantage of the situation as most companies look to rationalise the costs. Working from remote and virtual working will be the norm, and that will be where the future of jobs will be headed. We will have remote working in healthcare, remote education, remote banking and finance, etc.

Q. Before talking about the possible opportunities, which are the areas where Kerala has been hardest hit due to COVID and the resulting lockdown?

A. The backbone of the Kerala economy viz., tourism and NRK remittances will change forever. The tourism and the hospitality sectors will be the hardest hit. Cruise ships have remained docked for the last two-three months while the hotels are shut. The non-resident Keralites (NRKs) are returning back to the state in large numbers, most of them having lost their jobs. I see even educated and qualified people may find it difficult to get a job in other states outside Kerala.

Q. So, which are the possible areas where you see opportunities for Kerala?

A. I see a big opportunity for Kerala in business process management or BPM. Kerala can be an ideal place for BPM providers in BFSI, travel and leisure, telecom etc. Kerala can also pitch for 'smart manufacturing', given its limitations to vast tracts of land and environmental issues. Kerala can also look at 'high-value manufacturing' such as medical devices, high-end electronics, highly-sophisticated smart devices, laptops, iPods etc. I see a big potential for Kerala in these areas.

Q. But will this be as easy as it sounds?

A.  The ease of doing business has to improve, obviously. You just need to look at how TCS has made India's passport services to the citizens so efficient. Similarly, complex insurance claims are processed and settled by companies like Wipro and TCS. The time has come for the government to act as a regulator and not an operator. The government's role is to make the law. We also need to upgrade our universities to become completely digital, teachers have to be upgraded.  

Q. Are you optimistic?

A. I'm very optimistic. If we put in the effort, we can bring in a revolutionary change in Kerala. For this, everybody has to come together.

Q. If there is one big policy change that you want, what will that be?

A. There is a huge Indian wealth lying outside India. The high net worth Indians (HNIs) are keeping their wealth in Singapore, the UK etc due to the low tax rates. We need to attract these funds to invest in India through lower tax rates.
 

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