Will the Chip again be the Catalyst for Growth?
The setting is perfect. A highly skilled and technically literate younger generation combined with a receptive government has made Kerala an extremely fertile land for the electronics industry. The potency of this combination was proved once before in the early 1970s with the establishment of Keltron.
The Past: Kerala was ranked extremely low on Indian’s electronics map until Keltron was set up. The picture soon changed dramatically. By 1980-81, the state was ranked sixth in the country and manufactured six percent of India’s electronics output. Keltron’s activities also saw the setting up of an electronics base in the state with several new ventures coming up. Though some of them have gone on to become nationally well known companies, the state as a whole never recovered from an unfortunate slump in the 1980s.
Today, the government looks set to turn the page back and move the industry forward once again. The $100 million electronics sector in Kerala which has big names like Tyco Electronics, FCI OEN, OEN, NeST is set for exciting times with the government’s proposal to set up an Electronic Hardware Park at Kochi. The Park is expected to kick start the electronics boom in Kerala once again.
The Electronic Hardware Park: The Electronic Hardware Park will be developed at Kochi by Kerala State Industrial Development Corporation (KSIDC). Sprawling over 330 acres, the Park will provide state-of-the-art manufacturing and R&D facilities. Infrastructure will also be set up for contract manufacturing and fabrication units. The Park is expected to attract small, medium and large companies in the semi-conductor and electronic components sector.
The move to set up the Electronic Hardware Park is a reflection of the fact that the surge in demand for smart phones and laptops are creating an insatiable demand for electronics hardware. Reports indicate that given this rise in demand, India could be importing electronics hardware worth $400 billion in the coming decades. Setting up an electronics base now would help Kerala to plug the demand lacunae and capture significant market share in the future.
Kerala’s Electronics Edge: There are several factors that give Kerala an edge over the competitors. These include:
(i) Skills & Talent: Kerala has an extremely skilled workforce. In addition, the state is home to a large number of engineering colleges and polytechnics and this labour pool of skilled and semi-skilled workers expands substantially every year.
(ii) Access to International Markets: Kerala has excellent air connectivity with three international airports. Access to the West Asian regions including Dubai is quick and easy. This strategic location gives Kerala a distinct advantage.
(iii) Great IT and Electronics Base: Kerala had taken the lead in setting up technology parks in the country. The presence of Technopark in Trivandrum, Infopark in Kochi and Cyberpark in Kozhikode is a definite advantage. Major IT players like Infosys, Suntech, Wipro and TCS have significant visibility. Home grown electronic companies like OEN and NeST as well as the presence of global majors give the state a vibrant electronics culture.
(iv) Infrastructure Development: Kerala’s infrastructure has developed by leaps and bounds. The proposed LNG terminal, SMART City, and the Vizhinjam seaport are just a few of the ambitious infrastructure projects undertaken here. This provides additional scope for the growth of the State’s electronics industry.