Vizag, Tirupati, Vijayawada among 26 emerging tech hubs

Visakhapatnam The listing of three cities from Andhra Pradesh among the vibrant tech hubs across various tier-2 cities in exploring technology industry path in a report prepared by Deloitte and NASSCOM has brought wide cheers among major stakeholders of the IT industry.

Visakhapatnam, Tirupati and Vijayawada figure in the list of 26 emerging tech hubs in India based on evaluation done on five overarching pillars viz. talent, infrastructure, risk and regulatory system, startup ecosystem, social and living environment. The report says the emerging hubs are inching towards elevation to tier-1 category.

With India doing exceedingly well in the digital front after the thrust given to digital transformation mainly during the pandemic, there is sea-change in tier-2 cities in improving the IT landscape. More and more graduates rolled out from engineering and management schools are forming part of the talent pool required for the IT industry giving scope to many to work in multinationals all over the world.

According to the report, the costs in the emerging tech hubs are 25 to 30 per cent less compared to well-developed hubs. Setting up new offices also helps save almost 50 per cent in real estate rentals. Almost 60 per cent of required manpower is available from local educational institutes. The report said the tier-cities provide cost advantage to the IT companies.

Visakhapatnam as everyone knows, has excellent locations for making it an IT hub. However, lack of a comprehensive ecosystem and social infrastructure forced it to lag in making any rapid progress in the IT industry front. However, Infosys has come forward to set up a campus. Raheja has plans to start an IT tower. Millennium Towers 1 and 2 have been built to provide plug and play facilities to new generation entrepreneurs. The State Government has plans to develop an IT startup enclave in an area of five acres at Rushikonda with a built-up space of three lakh sq ft.

Sridhar Lanka, Government Advisor, Industries, told Bizz Buzz on Friday that AP is slowly emerging as a transit destination hub for the south, with strong pillars in infrastructure like ports, highways and airports.

“IT is poised for significant growth in tier-II and tier-III cities in the near future in Andhra Pradesh. Companies are increasingly seeking cost-effective talent pools available in these areas. Mega cities often suffer from congestion and high living costs, prompting IT professionals to opt for locations closer to their hometowns,” Sreedhar Kosaraju Chairman, DeepTech Naipunya Foundation, said.When contacted for comments on the findings made by Deloitte and NASSCOM, he said while established tech ecosystems exist in cities like Bengaluru, Hyderabad and Chennai, many companies prefer to establish their centers in locations where skilled talent is available at a lower cost. Attrition rates tend to be lower in Tier-II cities compared to larger ones. Even some Global Capacity Centers (GCCs) are considering tier-II and tier-III locations. This trend extends to startups as well,” he stated.

The Union Government is also focusing on policies to enhance the IT and startup ecosystem in tier-II and tier-III cities. Many Software Technology Parks of India (STPI) centers are located in tier-II cities. The future of IT growth lies in tier-II and tier-III cities, he observed.

Kosaraju said, “In AP, Vizag, Vijayawada, Kakinada, and Tirupati are promising cities for IT growth. These cities have strong educational ecosystems and a substantial pool of skilled manpower with STEM skills. If we can further develop the IT skilling ecosystem around these cities, it will lead to more job opportunities in the future.

The current IT policy is set to expire soon, and the Government of Andhra Pradesh should consider a new IT policy that emphasizes IT skilling and the development of IT in tier-II and tier-III locations, he opined adding, the government should focus on creating more co-working spaces and flex operators in our tier-2/3 cities.