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Why Malabar

Malabar

Malabar forms the northern part of Kerala and includes Kozhikode, Kasaragod, Kannur, Malappuram and Wayanad and lies between the Western Ghats and the Arabian Sea. The Malabar Coast features a number of historic port cities, notably Kozhikode (Calicut), Cochin, and Kannur that have served as centres of the Indian Ocean trade for centuries. The region is ranked best in India in terms of ‘Physical Quality of Life Index’. Besides, it also boasts of a number of India’s finest engineering and management colleges.

The city of Calicut is a home to NIT, IIM and many more prestigious colleges. Cochin is well connected to international locations via sea port and an international airport.

Location Assessment of Malabar

Key Success Factors for a region

IT industry has emerged as major source of revenue for a state. Every state has been making efforts to woo the major IT industries to establish their centres in their cities. This not only brings revenue but improves the standards of living and stimulates the socio-economic growth of the region. Cities compete for IT industry and need to develop their core competencies including infrastructure and facilitate policies which would differentiate them from others. While the competition with international cities is strong there is a healthy competition among the internal cities of India to entice the IT and ITES giants. Increasing interests in IT and ITES sector are the primary driving force for cities. As per the research conducted the key success factors for a region to be successful as an IT destination could be ranked as follows:

  • Real Estate availability at lower rates: A city needs to have ready availability of real estate for establishment of IT parks and other IT establishments. With the initiation of Special Economic Zones, IT industries have an advantage of setting up their establishments at lower rates. According to the survey, these were given the highest importance.
  • Low operating costs: Tier II cities have the lowest operating costs compared to the metropolitans because if developing facilities and incentives provided by the government to promote the region. Operating costs are one of the key expenses of any IT company and if they can be minimized then the location can be successful as an IT destination.
  • Connectivity- road, rail, air: With the advent of globalization every IT/ITES company needs connectivity to its other establishments in the country and abroad. If a city can provide state of the art facilities of road rail and air then an IT company will definitely be attracted to establish their business in a city.
  • Attractive land acquisition policies: One of the very important factors for establishing IT parks in a city is attractive and safe land acquisition policies. Relocation of the regional dwellers and providing them job opportunities is a concern for the infrastructure companies setting up their IT parks.
  • Internet/broadband connectivity: International and national clients communicate through e-mails, video conferencing and other features of the internet. A 24 X 7 facility if an internet and communication network is necessary for successful running of their operations. They are important factors which need to be focussed upon.
  • International airport: One of the very important factors for establishing IT business for immigrating/emigrating skilled employees and for exporting products and services.
  • Power supply: Although many IT parks provide a 24 X 7 facility of power by setting up power generators, but the costs can definitely be reduced if power supply is easily available.
  • Favourable tax rules: Government has realized the importance of IT and ITES industry in the socio-economic development of the city. The tax rules have been slackened off in many cities to lure the IT companies.
  • Availability of training personnel and aids: This is a factor which can be done away with because of good connectivity and communication networks. Training personnel and aids if available can definitely reduce costs but are not the primary concerns for setting up the industry.
  • Availability of system vendors: Similar to the previous point, availability of local system vendors can reduce the costs and time, but are not the most important factors to be considered.

Advantage Malabar

The table below shows some positive points which Malabar region has to offer and what others feel is required in a region to make it the next big IT destination (that is the key success factors and their rankings).

Key Success Factor What Malabar areas have to fulfill Average Rank on a scale of 1-8
Real Estate availability at lower rates Consummate real estate solutions – Rentals lower by more than 60%, 5.5
Low operating costs A cost of just $8 p.h. compared to the global average of $15 p.h.
Salaries – 1’5th of the international average
The data transmission cost from Kochi is low.
5.5
Connectivity- road, rail, air Excellent air rail and road connectivity in Calicut, Kochi 6
Attractive land acquisition policies Availability of SEZ to establish IT Parks 4
Internet?broadband connectivity Malappuram – First wifi district in the country, a part of Malabar-North Kerala
100% digital exchanges in Kerala and Malabar region.
15 GBps bandwidth support all over Kerala
7
International airport International airport in Calicut 4
Power supply Power and water tariff among the lowest in the country 7.5
Favorable tax rules and Government policies An investor friendly Govt. “plans to raise the share of the state in IT-ITES export from 0.75% to 3%. 3
Availability of training personnel and aids Database of readily employable graduates enabling ITES companies to access the talent
Human Development Index at par with the West
Lowest employee attrition rate in the country < 10%
3.5
Availability of system vendors Easy availability of system vendors which can reduce the costs involved and the overall transaction time thus improving the efficiency of the company. 2.5