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Sunday, August 20, 2006

Shenzhen & Sriperumpudur : China & India

Businessworld writes about the evolution of India’s first high tech ecosystem – in a way aping the fabled chinese city of Shenzhen. Interestingly for quite some time , shenzhen is trying to acquire a software city status like Bangalore. Sriperumpudur (almost chennai), from India’s Dallas where a former prime minister was assassinated, is now slowly emerging to be the Indian equivalent of Shenzhen. Nokia, Flextronics, Motorola, Foxconn all have invested here to manufacture telecom equipments here. There are three types of operators that have come to invest here – The OEMs like Nokia, Motorola, The EMS’s like Flextronics & Foxconn & the component manufacturers who work with the OEM & EMS players. In less than an year, the expectation is that 50% of shenzhen’s volume of mobile related components would begin to get rolled out of Chennai. (Shenzhen’s capacity is 50 million handsets an year)
Shenzhen,less than an hour by air/train from Hongkong makes laser printers, mobile phones, set top boxes etc. Shenzhen, so close to Hongkong, was China’s first SEZ, gets some 30 billion in FDI, contributes 9% to china’s GDP. Shenzhen is home to some of China's most successful high-tech companies, such as Huawei and ZTE and most of Apple Ipod devices get manufactured/assembled here.

For India, a country which is about to clock record number of mobile phone subscriber additions in the world, having domestic manufacturing facility was the first step – and there Nokia made the first step and the rest followed. Already in Chennai, global telecom majors – the likes of Ericcson, Cisco,Telecordia etc are doing some research/software work – there is a fair expectation that related software work that can be done locally will see a huge swell, and to bring manufacturing costs lot of the suppliers may move in as well, creating in the process, a complete ecosystem. This may become the first high tech manufacturing cluster in India as well as it tries to emulate Shenzhen. After all Chennai is the nearest commercial mega port closer to the SEAsian tigers(and there is a nearby state of the art Ennore Port) and being almost the gateway to south India – provides lot of locational advantage and sriperumpudur is less than 200 miles from Bangalore as well. Thousands and thousands of engineering graduates come out of colleges in the province as well. But infrastructure support (water included) and further government support in not impeding things would be the key to build on this momentum. After all Shenzhen is what it today, owing to the push that started all the way from the top. It had the benefit of billions of dollars in investments by the chinese government and it is way ahead now, making comparison an uneven one. It will be very interesting to watch the development of Sriperumpudur in the next 3/5 years.

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