Big corporations are finding Kerala’s tier 2 cities attractive for setting up Global Capability Centres (GGCs), reads a report released by Nasscom. According to it, both Thiruvananthapuram and Kochi have registered over 20 GGCs, and together they employ more than 15,000 and 8,000 people, respectively.
One major reason behind this trend is the fact that tier 1 cities like Bengaluru have become saturated, Infopark CEO Susanth Kurunthil tells TNIE. “Other factors like high land cost and over-stretched infrastructure facilities elsewhere, too, have had many MNCs eyeing tier 2 cities, especially Kochi and Thiruvananthapuram,” he says.
A source with a real estate firm that deals with IT infrastructure seconds Susanth. He says, “Unlike other tier 2 cities in the country, the land value in Kochi and Thiruvananthapuram is lower, even compared to nearby cities like Coimbatore. Then there is the advantage of having better connectivity and a huge concentration of educational institutions,” he says, implying a larger talent pool.
Susanth, too, points to this as yet another alluring factor. “The availability of a big talent pool in Kerala has made it a favourite destination for setting up GCC among big companies like IBM, Nissan, EY, etc,” the Infopark CEO says.
Then, it is also about being part of a thriving, supportive ecosystem, and not always just about business growth, says Technopark CEO Col Sanjeev Nair (retd).
“Good infrastructure, a skilled workforce and an inclusive community ethos — these are what made Thiruvananthapuram a preferred destination for GCCs, deep tech firms and startups alike,” he says.
While the news is indeed buoyant for Kerala’s ambitions in IT, what will bolster this even further is the state government’s efforts to turn even more cities in the state into potential GCC hubs.
“One major step being taken to this effect is the formulation of a draft GCC policy. It will be released in September as a prelude to the GCC Conclave, organised in association with Nasscom,” Minister for Industries P Rajeeve tells TNIE.
The setting up of a Skill and Entrepreneurship University and industry corridors to connect various tier 3 cities in the state is yet another step taken towards this goal, says the minister.
Kerala already hosts several GCCs from leading global companies such as IBM, Allianz, Nissan Digital, EY, Accenture, Equifax, H&R Block, Insight, NOV, Safran, Guidehouse, Icon and RM Education.
The report, ‘The Rise of Emerging Cities in the GCC’, also paints an optimistic picture for the rest of India by highlighting how it has steadily become a GCC hub for large multinational companies.
“The GCC market size is expected to reach around USD 100 billion by 2030, and the headcount will cross 2.5 million,” industry sources say.