Andhra Pradesh

Forming High Tech Enclaves

Geography
Krishnapatnam
Chennai
Vizag
Kakinada
Vodarevu
Bay of Bengal
Bangalore

Chennai
INDIA
ANDHRA PRADESH
HYDERABAD
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( 4
th
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
Success Roulette
Trouble Failure
Strategy Formulation
S
t
r
a
t
e
g
y

E
x
e
c
u
t
i
o
n

Appropriate
Inappropriate
G
o
o
d

P
o
o
r

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
(Sq ft)
200,000 40 million 200 times
Global Service companies
Mahindra Satyam
Infosys
TCS
Wipro
NCR
Invensys
Progressive
AMD

Microsoft
IBM
Oracle
Qualcomm
Computer Associates
Motorola
Nokia
CSC

Google
Yahoo
Amazon
Face book
UBS
Honeywell
Verizon
Cognizant
GE Capital
Deloitte
Dell
Bank of America
HSBC
Accenture
General Motors
Accenture
Andhra Pradeshs 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
428,811 graduates/year
1847- U.G.
Colleges
173,032 engineers/year
527- Engineering
Colleges
43,045 seats/year
637-MCA
Colleges
31,398 seats/year
436 - MBA
Colleges
40,785seats/year
174 - Polytechnic
Colleges
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