Let the IT Magic spread

India’s seven dominant IT cities, where 90% of the 2-million talent pool reside and crack code, may see their share in the pie slipping to 60-75% if future job creation spreads to tier II and tier-III cities. Moving to these non-IT centres would translate into over 30% cost advantage for companies. But, for growth to shift, these centres have to come to steam on parameters that drive location decision such as talent pool, infrastructure, social and living environment, business climate, government support and operating costs.According to the Nasscom-AT Kearney assessment of 50 leading cities, over the next decade even a conservative 15% growth rate for employment will lead to about 8 million professionals by 2018.With most of the cities already bursting at their seams, absorption of this kind of growth by existing cities will be a social and physical infrastructure challenge, it says.What holds the key for IT to spread its wings to other cities is availability of talent pool and social and physical infrastructure. There is a need to increase the quantity and quality of talent pool by setting up finishing schools, technical institutes and increasing the size of the graduate pool. Nasscom vice-chairman Pramod Bhasin has proposed a Jamshedpurlike self-contained IT region to enable growth in tier II and tier IIIcities. Many low-cost tier II locations have not been able to attract senior managers owing to the lack of social infrastructure. Some regions have thrown up concerns like lack of employment opportunities for spouse or fewer entertainment options.The study has split the 50 cities into four categories: Leaders, Challengers, Followers and Aspirants. The seven cities in the leader category are Bangalore, Chennai, NCR, Pune, Hyderabad, Kolkata and Mumbai. Taking Karnataka as an example, the study points out that while Bangalore has a location attractiveness of 7.1 against the challenger destination in the state, Mangalore at 5. However, Bangalore is able to deliver a cost arbitrage of 14% compared to 37% by Mangalore.