"ICT alone can offer 1 lakh jobs in Kashmir by 2020"

KashIT:

KashIT is a special series initiated by CyberMedia to unleash the growing digital economy of Kashmir valley. These are a series of articles, interactions and company profiles highlighting the lesser known IT and ITeS ecosystem present in the valley and how it has harnessed over the period of time even in the most challenging and difficult times.

The objective of KashIT is to introduce the brewing IT sector in the valley and its latent potential that could be leveraged by the industry across the country and elsewhere to explore business opportunities enabling further growth.

CMR already in engagement with ICTA (Information and Communications Technology Association of J&K) is attempting to promote the ICT sector of the state through a series of activities with the aim of collaborations and engagement among the ICT and ESDM ecosystem of the country with that of the J&K for business opportunities.

As several players within the ICT and ESDM look for Tier II and III locations for being competitive through collaboration, J&K can play a vital role as an assured backend partner.

In the first part of the KashIT series, we bring you a candid conversation with Jahangir Raina, the founder Chairman of ICTA, who spoke on various dimensions of the ICT industry in the valley. Jahangir is also the founder of niche analyst firm iLocus, which has been serving clients globally, especially in the domain of VoIP. As a diversified business, iLocus has also been implementing various eGov projects in the state.

Excerpt:

Kashmir is known for tourist places, apples and shawls. You talk of IT. What is the size of this sector right now?

IT and ITeS sector employs around 13 thousand youth in the state. And that is all due to the efforts of local entrepreneurs. We are yet to secure recognition and patronage of the state government. However, things have started to change. In the recent budget of the state, Finance Minister Haseeb Drabu announced some incentives  specifically for the IT sector for the first time and the industry welcomed it.

Realistically speaking what kind of potential is there for IT industry in Kashmir?

At present rate of growth, we expect to grow up to an employee strength of 50,ooo by 2020. With the help of the state government, we can cross the 1 lakh mark by 2020. The traction has been driven mainly by the BPO work which has seen appreciable growth since 2011. We anticipate substantial business opportunities in the BPO sector to come our way over the next few years. We need to be receptive and be prepared to make the most of those opportunities.

What is required in order to be receptive and prepared?

We lack affordable real estate in urban areas, wherein the infrastructure in rural areas is not adequate to support BPO operations. In terms of industrial estates and IT parks also, there has been no movement from the state government. We have been promised IT park at Ompora (Budgam district) and also at erstwhile HMT factory campus (Srinagar district) but nothing has materialized yet. A sustained set of promotional activities are also required from the state government.

What kind of promotional activities should the state government undertake apart from creating IT parks and affordable real estate for this sector?

We would ideally want to see a liaison office in Delhi or Bangalore for liaising with the corporate IT players- because that is where the business is coming from. There should be a dedicated business development team. There should also be people producing market intelligence as per the requirements of the local J&K IT industry as well as publishing regular newsletters for promotional purposes. Then there are events and buyer-seller meets that need to be organized on a regular basis.

Basically the state government needs to establish a promotional cell that is mandated with all these works. After all, there are dedicated government departments for sectors like Tourism, Handicrafts, and Horticulture with thousands of employees in those departments. The state government can surely afford a small promotional cell for IT and ITeS.

Is Kashmir receptive only to the BPO type work or is there any innovation coming out of the valley?

It would be unrealistic to expect IT industry in J&K to be characterized by technological innovation at this stage. You see innovation driven primarily by startups in places like Bangalore which has been dominated by IT sector for over three and a half decades now. Innovation does not fall out of sky. It emerges on the back of wider, richer, and shared experience. And then there is the issue of being able to monetize that innovation. The dotcom bubble happened in the silicon valley fifteen years ago, because the industry was not able to monetize the innovation that was brought about by the startups. The consumers just were not ready to adopt the technological innovation.

But can you give us a feel of what else is possible in the valley apart from BPO?

I will share my own experience. For nearly a decade I did research reports on nextgen telecom segment with global coverage on areas like VoIP and mobile broadband. Frankly speaking we had no competitors in the country. Apart from that we developed telecom network signaling software, which we were not able to commercialize. I also ventured into PC-to-Phone VoIP service about 12 years ago and ran it successfully till international rates came down substantially. Then there has been a bunch of web experiments including a Data Mining based web service and something I used to call ‘Youtube of Charts’ – all developed locally. For the last three years I have settled down with relatively less challenging e-governance projects. And then there are examples of other entrepreneurs in the valley.

We do have bright spots of innovation. But we don’t yet have the ecosystem to support innovation just yet. We need to develop equity financing options and other bells and whistles that come with the new startup ecosystem that can sustain and commercialize innovation. We need to arrest the brain drain also. We are, for example, very short on quality programmers who do not find suitable and well-paying jobs here and as a result move to greener pastures.

Would it be fair to say that your pitch for BPO work is plan B and largely due to the results of brain drain in the IT industry?

An entrepreneur should not bark up the wrong tree. Never do a business where you will not find the requisite manpower. Suppose you focus on innovative web services, it has low entry barriers for sure. However there are not enough quality programmers available in the state and you will not be able to scale up such sector. And it is not just the programmers, you require smart digital marketing professionals. We are very short on that front too. In contrast, there is almost 2 lakh BPO-ready workforce available in the state.

Somewhere, ensuring business continuity is a matter of concern for potential collaborations. Can the industry deliver from the valley despite all odds?

First, from infrastructure point of view things have improved a lot. Some five years ago, we couldn’t think of having backup bandwidth provider as there was none expect STPI and BSNL to some extent. Now, you have so many options for that. We can now even have VSATs and 4G as backups.

The other ‘doubt’ could be arising out of the unevenness of the things in valley. I think the best assurance could be some of the successful ventures in the ICT domain that are not only supporting local clients but also serving global critical operations like that of BQE and iQuasar. So we have the success stories where 24×7 operations are run out of the valley despite all odds.

We discussed what the state government of J&K should do in order to promote the IT/ITES industry in the state. But what about the central government? What should they be doing to promote this industry in J&K?

They need to ensure that the states also cash in on the promotional schemes they launch. And if there is any need for advocacy at the centre that would be the mandate of Nasscom. I also think that Nasscom should push for an aggressive J&K specific program with DEITY.

What is the need for ICTA when there is industry association like Nasscom mandated with advocacy of IT industry?

Nasscom is working at the national level. There is a need to take up advocacy at state level as well. All progressive states in the country have their respective IT polices and interventions in place for promoting local IT and ITeS sectors. No official IT policy is in place in the state of J&K. It has remained in draft mode since 2012.

If you analyze the IT and ITeS landscape in the country, its inertia and development has not trickled down to the states, especially states like J&K which would be an ideal destination for such ventures. There have to be forums who take up those issues. So there is no overlap in agendas of ICTA and Nasscom. Rather, our efforts are complementary.