Tier 1 Indian cites to lose IT jobs to tier 2 cities

More jobs will move to cities with lower operating cost and better quality of life, says Siddhartha Bhattacharya, CEO of Infopark, a state-owned IT hub.
Written by ZDNET Editors, Contributor

In five years, 1.7 million jobs in Information Technology (IT) sector in India will move out of tier 1 cities like Delhi, Mumbai, Pune, Bangalore and Hyderabad, to tier 2 cities, Siddhartha Bhattacharya, Infopark's chief executive officer, said in Kochi.

Bhattacharya was speaking last week at a discussion organized by The Indus Entrepreneurs (TiE), a global not-for-profit organization promoting entrepreneurship. Infopark at Kochi is a state government-owned IT Park.

It is the better quality of life and lower operating cost that are attracting the IT companies to these cities, he said quoting research reports.

He said among the upcoming IT destinations, Kochi has many inherent advantages.

"The data transmission cost from Kochi is low. Seventy-five percent of the country's data traffic goes out from Kochi. VSNL has a 15 gigabyte gateway here. The electricity and water tariffs are one of the lowest among all the states. Compared to Bangalore, house rent is low in Kochi. The attrition rates in IT companies are below 10 percent."

At present around 40 companies in the Infopark employ around 7,000 people. "In next four years we expect the number of companies to go up seven to eight times," said Bhattacharya.

He noted that Kerala has the highest density of IT and science professionals. "The state's infrastructure is pretty strong, especially in telecommunication sector," he added.

According to Bhattacharya, Infopark is in the process of coming out with a dedicated incubator to help start up companies. "This is an early life support system for start ups. We will help them with issues like government clearance, finance and also help them expand," he said.

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