‘Small cities fail to attract huge investments in IT sector’

July 3rd, 2008 - 8:52 pm ICT by IANS  

Chennai, July 3 (IANS) Poor infrastructure facilities limit the potential of the small cities in Tamil Nadu in attracting major investments in IT sector, though they offer huge cost advantage compared to big cities, according to a report. The study, carried out jointly by the National Association of Software and Services Companies (Nasscom) and AT Kearney on location roadmap for IT and business process outsourcing (BPO) units, said Chennai was far ahead of tier II cities like Madurai, Salem, Coimbatore and Trichy in terms of business environment, skill set assessment for IT and BPO outfits, infrastructure and social living environment.

The study, which was released Thursday, said graduates from Trichy and Salem prefer to migrate to bigger cities like Chennai, Coimbatore and Madurai rather than working in their home towns.

Trichy and Salem suffer from infrastructure, connectivity and social life inadequacies, it added.

According to the report, companies that intend to set up operations in Coimbatore and Madurai have to contend with the absence of good quality hotels, good commercial space, limited public transport in peripheral areas and steep increase in real estate and labour costs.

The report recommended Coimbatore, Trichy, Salem and Madurai as ideal places for non-voice domestic BPO operations.

Coimbatore could be pitched as an alternative site for Chennai and Bangalore for IT, non-voice BPO units and Tamil language call centres while Trichy can attract small to medium-scale IT and non-voice international and domestic BPO operations, it added.

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