Alert and Smartness

Friends,
Smart City is projected as one of the best outcome of Global Investors Meet, whose rhetoric theme had been "you need a wall to paint a picture". However the project raises a few questions, other than those which are in wide circulation in media, in Kerala. The mainstream opposition and a few critics within the government have accused the Government of indulging in real-estate business. Some of the issues that have missed the debate are placed here.

1. Information technology (or to be more precise, its productive market) can be compared to a picture that needs a wall to be painted. The wall in most cases represents the traditional industry, where IT co-exists, adding value to the existing services offered by such industry. IT industry also consumes itself, though its total share is negligibly small. Hence for IT to survive and excel, the traditional industries should be in a position to consume the value-added services. This traditional industry, if situated in a foreign land, brings in foreign exchange. Hence if Government is really concerned about promoting information technology that is involved in IT production, it should revive the local traditional industries (or liaise with foreign governments to revive their traditional industries, and insist them to buy solutions from us).

2. The wall can also assume the form of Government, where it consumes information technology aided services. Presently our Government is leasing services from monopoly developers like Microsoft Inc, where it is shying away from owning such services. This is a long-term liability for the Government. The Government can rejuvenate this intake, thereby creating a demand for such services, provided it redefines its position and declares on *how* such services are to be provided. By insisting on solutions that are totally indigenous, devoid of elements that allow control from outside, and independant of monopolistic conditions and proprietary standards/formats (insisting that every component of software be traded under the GNU General Public Licence, for instance) the Government can ensure progress of domestic IT industry. Here the solutions are not monopolistic in outlook (i.e., one doesn't have to fall back on the same supplier for any clarifications on the solution, the buyer becomes independant of the seller). The solutions are completely *freed* from all conditionalities of the supplier and have open standards and formats.

3. The Business Process Outsourcing segment of the "conventional" Information Technology Enabled Services (ITES) that includes transcription services and call-centres is another area that consumes services from information technology. To promote such an environment, and create new opportunities, the Government has to necessarily influence the foreign states or foreign industries who consume these services. This is usually a difficult task for any Government. If this is not adhered to, the jobs actually are those which are displaced from one location to another - and not new opportunities. As a caution, one should always recall that transcription service will decrease as and when appropriate speech recognition or pattern recognition software are developed. That these services do not need any "engineering skills" are well known.

4.a) Most of the "big" software services companies in India (who keep their average age of employees in 20s) are those who mainly help commission solutions with other industries in the service or productive sectors, in India or abroad. The phenomenal profits, some of these companies earn are heavily dependant on the favourable monopolistic conditions under which they lease their services. New international intellectual property rules are increasingly in favour of these restrictive trade practices of such companies, which prevent smaller such companies from emerging. Hence the main services that these companies are providing to the domestic market, is the help which it extends to train the IT professional for short duration (reflected through their average age figures, and attrition rates). This could be best viewed as a kind of apprenticeship, an on-the-job-training. Employment opportunities of these companies that appear regularly are often to compensate for the retrenchment (attrition) from the same company (such publicity driven activities could also be necessary for maintaining their speculative market indices).

4.b) There are studies that indicate that by energising foreign industry, empowering them with information technology at subsidised rates, the local counterpart is pushed to a disadvantageous position. This shift in balance determines the true position when the corresponding service sector is "liberalised", activating GATS or similar such provisions. This is a new development, hitherto not experienced. Hence the government *strategy* of earning foreign income by exporting *human resources*, or *cutting edge software services* may have a reverse and adverse long-term effect on local economy. This becomes all the more significant as *trade in services* are still dominated by the developed economies of the world (UNCTAD reports).

5. The remaining sector visible in the information technology field is the one which is co-located at its site-of-need. Industries operating in the sectors of finance, telecommunication, distribution, transportation, health, tourism, consultancy, construction etc. for instance, are examples. The information technology segment cannot be detached from these sectors so easily, and relocated outside its area of operation. Hence any suggestion for exclusive geographical area for such operation of this industry sector incorporating information technology would appear meaningless. By far, this is the largest sector that houses information technologists and sees them through the rest of their life, or keep them as long as they wish.

6. The claims by the Government of Kerala that Smart City would generate tens of thousands of skilled IT opportunities are hence baseless, unsupportive of ground realities. The speculation that millions of ITES (call centres, transcription jobs) would arrive is too wild, given the fact that there are instances of resistance generated within the nations by the poor people who actually commit to such (menial) jobs. These people have been given assurances by their respective governments that such displacements would not be promoted and suitable restrictions would be imposed on companies indulging in such practices. The project of Smart City, thus, cannot be treated like an *Entertainment Industry* that can generate income on its own without depending on the conditions of other industries.

All these points are suggestive of the wrong steps that the incumbent Government in Kerala is indulging at present, and it appears as if the Government is too keen to place the cart before the horse.

CK Raju,
Thrissur