Cover Story: Business/Living, Surging South

Not too long ago, say three years, the phrase "hell freezes over" had a different meaning in Chennai. It was pejorative, as in, "Chennai? I'll move there the day hell freezes over." So there's this living joke in that teeming, steaming metropolis, the place where these days, tradition is being stood on its head, idli meets infotech and sambhar meets cyberspace. For starters, a lot of people move to Chennai these days for a living associated more with Bangalore or Delhi. And when some of them unwind after a hard day's driving on the executive track or the Infobahn -- beg your pardon, the convergence zone -- they go to party at the newest hot spot in town, a discotheque-club which has the dancefloor on fire most nights: Hell Freezes Over.

HAPPENING CHENNAI

Chennai? Check this out. An estimated 600 Internet cafes have sprung up in the city in the past two years. And there's this fun element now that Chennai never had. "Chennai is going through what Bangalore was going through a few years ago," says M.C. Manoj, managing director of Hell Freezes Over, or HFO, easily the city's most happening nightclub packed to the gills every night.
In less than a year, numerous multi-lane bowling alleys have opened and pool parlours, spread from downtown to tradition-minded suburbs, are simply too many to name. Those who want a break on the wilder side cruise down the East Coast Road to the Kart track and if it's a weekend, some head down on for all night jams at EC41.
For long a retailing heaven, even Chennai is stirred up with super stores in less than two years. The biggest is called Lifestyle, and the name can't be mistaken for an accident anymore. Wait till you get to the food. "Till recently, you only got masala dosas," says Tamil writer Timeri Murari. "Today you have Japanese, Korean, Mexican, Italian." Qwiky's Pub, at a corner of Gee Gee Emerald, a swank plaza that also houses Pizza Hut and Swarovski, serves Rolling Stone along with 40 types of coffee. See the crowd in the picture at bottom left? That's Quiky's where, like anywhere in Chennai these days, tradition is 'cool'. As a saying goes, Chennai has the right mix of everything. Neither too fast nor too slow. It's getting faster.

For those of you who don't know it already, here's an object lesson: Chennai doesn't spell c-o-m-a-t-o-s-e anymore. And here's another: if you thought the south was actually heading south, there's a good chance you don't live on this planet. The south, specifically, Karnataka, Tamil Nadu and Andhra Pradesh, pegged by the thrumming state capitals of Bangalore, newly alive Chennai and ready-to-soar Hyderabad, is arguably the single biggest dynamic zone in India for business, leisure -- and the future. Some people already call it the golden triangle. Listen hard, because you will hear more of it.

Because this is the country where billionaires tread, a string of amazing success stories in infotech that spell Infosys, Wipro, Satyam, names that now decide which way fortunes on stock markets head each day: north or south. This is the region which cowboy Americans, staid Koreans, practical Japanese and industrious Indians, non-resident or otherwise, increasingly give as their business address. Delhi and Mumbai were given destinations on Bill Clinton's itinerary, one as the capital and the other as the business capital. But did it strike anybody that three state capitals were lobbying to get the American president to visit India's capital of the future? Hyderabad won, and Andhra Pradesh Chief Minister N. Chandrababu Naidu networked onto a dream platform. The south is getting that aggressive.

What's the Buzz in the south?
The biggest buzz is undeniably the knowledge business. The facts behind India's it mini-revolution make interesting reading. More than two-thirds of India's software companies are located in Karnataka, Tamil Nadu and Andhra Pradesh. The three states account for 60 per cent of India's software exports. The US consulate in Chennai has the largest H1B visa processing facility in the world. In the fiscal year ending September 1999, the consulate had processed 30,000 H1B applications, a third of all such visas issued for it jobs in the US from India.

Karnataka still leads the pack in software exports, with Rs 5,400 crore in 1999-2000. But Tamil Nadu's software exports have almost trebled from Rs 400 crore in the past three years; Andhra's performance is even more spectacular: from Rs 22 crore in 1994-95 to Rs 573 crore in 1998-99.

By bringing in jobs, rising incomes and talent from all across India, wealth machines like Infosys, Satyam, Wipro -- and 500-odd other it companies -- have changed the beat, tone and tenor of the region. Karnataka eats more pasta than any other Indian state. Bangalore is the country's biggest retail market for music. Chennai has the largest number of supermarkets and Hyderabad is emerging as a retailer's paradise.

The growing prosperity of the south is now well recorded. According to the Chennai-based Business Intelligence Unit, 30 per cent of all families with annual incomes above Rs 1 lakh live in Tamil Nadu, Andhra and Karnataka.
The prosperity is not confined to metros but envelopes cities like Coimbatore in Tamil Nadu and Mysore in Karnataka. Tirupur near Coimbatore is today the biggest hosiery town in India with exports of over $1 billion a year. Coimbatore accounts for 25 per cent of yarn exports from India.

A new social life is waltzing in especially in Chennai (see box) on the lines of what Bangalore kicked off in the early '90s. Even the celebrated "pub city" of Bangalore has a new take on guzzling. For example, there's the Beer Drinkers Association of Information Technology where engineers and executives from the city's knowledge industry meet after work. If Microsoft, Cisco and Infosys rule in Bangalore, then Satyam Infoway, Hyundai and Ford Motors hold court in Chennai. And Hyderabad wants all these and more.

There must be something to it, for the Tamil Nadu chief minister to stand and claim last week that Tamil Nadu had just won out over Maharashtra as the state with the largest share of investment. It hadn't, but the hair's breadth separating the two -- Maharashtra with 11.3 per cent of investment compared to Tamil Nadu's 10.6 per cent -- shows how far the south has travelled.

What's Behind the Buzz?
Without a doubt, better governance and focus is the south's biggest draw. Political masters in all the three states -- Kerala (see box) is the lone contrarian except tourism -- have wooed business much more aggressively and methodically than any other states. As Tamil Nadu's Infotech Secretary D. Prakash explains: "The infotech revolution didn't happen in a jungle, it happened due to a government committed to good governance." In the lead is Naidu whose efforts have pulled Andhra Pradesh out of the industrial wilderness and onto one of the most preferred business destinations. In the business today bi-annual survey of best states for business, Andhra's rank rose from 22 in 1995 to No. 3 in 1999. Naidu, the epitome of gung-ho, wants Hyderabad to be known as "the hi-tech capital of India's most happening state", and has a detailed roadmap to get there by 2020. Naidu is so marketing savvy that he has appointed advertising guru Alyque Padamsee for image management.

Naidu's initiatives have galvanised others into action. Karnataka Chief Minister S.M. Krishna is a frequent flyer to major state and world capitals, scouring any forum for business. "I want to be known as a go-getting chief minister," he says. He recently roped in management consultant Arthur Andersen to manage a major global investors conference at Bangalore in June 2000. His task should be easier since Bangalore had has a long-standing brand value among foreign and Indian firms and has twice been voted as business executives' most preferred city.

Tamil Nadu -- the most industrialised state in the region -- too has hitched onto the it bandwagon with the unveiling of an it Policy. The state got a shot in the arm recently when NASSCOM, the software industry's association in India, rated Chennai as the best place for software development in the country. It only added gloss to a Harvard University study that identified Tamil Nadu as a possible "regional gateway to Asia".
In a way, the it boom had to happen in the south, riding on an already solid engineering and manufacturing tradition. The region has the largest pool of scientific and technical manpower -- the most critical ingredient for the knowledge industry. Tamil Nadu alone churns out 22,000 engineers every year. "The most important factors in our location decision were the availability of a supplier base, skilled labour and infrastructure," says Philip Spender, Ford India's managing director.

Karnataka has 96 engineering colleges, 186 polytechnics and 3,000 industrial training centres, in addition to over 100 premier research institutes; Manipal is a thriving university town unlike any in India. In Andhra Pradesh, the number of engineering colleges have more than tripled in the past five years -- from 32 to 102. A year ago, the Indian School of Business being sponsored by top Indian business houses in association with Ivy League business schools, relocated from Mumbai to Hyderabad. It's called the draw of the favoured.
Continued in the next page

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	May 29, 2000