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  • Category: SmartCity

    Please Clue me in

    Hi smart folks,
    I have been trying to make some sense out of these smart city talks. So far I have failed miserably. Can somebody please tell me whats going on.

    As far as I gather, smart city is a real estate development and nothing else. It does not create jobs other than the direct jobs for construction, project management, maintenance etc.. Jobs are created by the actual IT companies that might use the smart city for their development centers. for example if Microsoft starts here in smart city, microsoft will create a number of jobs. How is DIC responsible for job creation? If I have a bus which transports people to an office, say 200 people every day, am i creating 200 jobs in that office? Will the government pay me for creating those 200 jobs? If they pay DIC to build teh buildings, shouldn't they pay me, the bus guy? What about the contractor who built the road in which I drive my bus. Shouldn't he also get paid for creating these jobs?

    I cannot fathom why 3 crores of people think microsoft or intel didnot start development centers in Kochi or Kakkanad because we did not have tall buildings? Could there be different reasons? I have seen the projections which says they create a lot of jobs, that too high paying IT jobs. I wish I was gullible enough to believe it. i also wish we made it mandatory for us to learn basic economics in the school. Not just keep it in the book, but actually learn economics basics.

    bye for now.

    A mallu shaking his head in disbelief
  • #1406
    The same old question, but at least you sound honest.

    Business needs infrastructure. And who creates infrastructure?

    The Government has done its bit by building Technopark and Infopark. If you need more capacity, you'll have to get the private players in. Besides, the Government has only been partially successful, they've got full occupancy in their parks, but not too many companies (read those who can provide mass-employment)

    But the private players won't invest unless they see good business prospects, which as of now, really does not extst much. So , it becomes a slow game. For a private player, Bangalore/Chennai/Hyd are more attractive to build business parks as we've seen.

    Enter smart city. They will invest 1500 crores to build a tech. park with no prospective customers in sight (OK, may be they see it, but the rest of Kerala does not see it yet). Once they build the facilities, it is their job to rope in the companies and let out space.

    And thats the key difference. Because they commited such huge sums, DIC will be forced to go out and get as many good companies as possible. Real *marketing* which we've only been moderately successful.

    And DIC seems to be capable of attracting the industry big names, so lets give them a chace.

    Let s also not forget that, in a state that has nothing, we should be grateful if someone at least considers investment. What is the point in shooing away, be it smart cities or whatever.

    Your analogy of bus operator does not hold good. DIC is probably like the company that builds buses, not the ones driving it around.

    Drawing analogies one step further, people bribe to get Government jobs. Sometimes you bribe the babus/netas directly, sometimes you pay through middlemen. No point in insisting that I will only pay to the minister directly, because you do not have direct access to *the neta*, so you lose the job. I am not saying that Smartcity is all bribe, but Mallus may understand this exmaple better. If you cannot reach out to the companies directly, you reach them through infrastructure providers. Whats wrong with it?

  • #1407
    Aji, my two cents worth...

    >>As far as I gather, smart city is a real estate development and nothing else.
    -------------

    DIC is an IT Infrastructure provider (IT infrastructure is also classified as real estate). Do you understand the difference between an IT company and an IT Infrastructure provider? If you are familiar with ITPL in Bangalore, ITPL is an IT infrastucture provider. IT companies operate in the office space provided by ITPL. The relationship between Smart City and IT companies is something similar, though they plan for an integrated township as well. Eventhough IT infrastructure can also be classified under real estate, it is not the traditional real estate business that sells 30*40 sites. Your allegation is as ridiculous as alleging that ITPL is into real estate business and they'll sell the land allotted to them as 30*40 sites.

    >>I cannot fathom why 3 crores of people think microsoft or intel didnot start development centers in Kochi or Kakkanad because we did not have tall buildings?
    ----------
    Consider DIC's clients: Microsoft, Oracle, HP, IBM, Dell, Siemens, Canon, Logica, EDS, Sony Ericsson, SAP, Cisco etc. Most of these companies like to lease the space from infrasturcture providers rather than build their own campuses. Even the companies that have built up campuses in Bangalore & Hydrabad like Oracle, HP, IBM, Dell, Siemens etc started off by leasing space from infrastructure companies. They do this to minimize the risk & commitment and also to focus more on their competencies. Right now, all these companies have huge expansion plans in India. Bangalore is more or less saturated because of the poor infrastructure & non-availability of land. That's the reason why there is every possibility that they'll set up their operation in DIC.

    Consider an anology: Assume that you came to know from someone that pappadam business is very profitable in Uzbekistan and you want to start a pappadam unit there. Will you start the unit right away by buying 100 acres of land, constructing all the buildings required and buying all the machinary? Rather will you lease the infrastructure required from someone, start the unit and depending on the success of it you'll build your own infrastructure? The situation is very much similar here.

    When the MNCs came to Bangalore & Hydrabad, they leased infrastructed and operated. It was much later that some of them built their own infrastructure.

  • #1408
    Aji, there would be some extra statements that are not relevant to your questions in my response like "Your allegation is as ridiculous as alleging that ITPL is into real estate business and they'll sell the land allotted to them as 30*40 sites." Please ignore them. Actually I copied & pasted my response from another thread where I answered a similar question.

  • #1409
    Aji,

    DIC and Smart City are not an IT Copmany. it is an IT Infrastructure Development Company. I hope, you can understand this. It is not just an average Real Estate company like Puravankara Builders of Hiranandani Constructions.

    IT Infrastructure companies are essential, coz they have capacity to build an dprovide world class infrastructure for IT giants.

    Do you think MicroSoft or Intel will setup their cmapus in a CPI (M)-party office like structure?

    ITPL in Bangalore, STPI (Software Technology parks of India) or simply Technopark in Kerala, Tidel Towers in Chennai, Kinfra Parks in Kerala, InfoPark, Magarpatta in Pune, Technopolis in Mumbai, Cyberabad in Hyderabad, etc are IT Infrastructure Development companies, not IT Companies. Infatc these companies are also providing thousands of employment.


    Regrads,

    Rivaji

  • #1411
    >>i also wish we made it mandatory for us to learn basic economics in the school.
    ----

    As for the economics of it, gone are the days when the same company used to buy land, construct buildings, do the internal accounting, support services etc. Modern management has found it to be much more efficient and cost effective to concentrate on your core competencies and outsource the rest.

    ie It is much better if a software development company concentrates only on core software development and outsouce the infrastructure provision/maintenance, IT support, helpdesk, security, transportation, accounting etc to third-party companies. That way, the management can be more focused on its core-competencies in the most cost-effective manner.

    ******
    The greatest improvement in the productive powers of labor, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labor.

    Wealth of Nations - Adam Smith
    ******

  • #1415
    Aji,

    The reason why big companies like Microsoft will not build the infrastructure and start their company in Cochin or any other place is that infrastructure development is NOT their core competency and they would not want to spend their energy on infrastructure development. They would not want to build road, generate electricity, construct office space, buy buses for their employees etc. They would just want to buy or lease a place with all the facilities available and focus on their core competency - i.e.software development. They would even be willing to pay a high premium for these facilities.

    Either government or private companies with infrastructure development as their core competency will have to invest and create the basic infrastructure and then invite these companies to start their offices here. I do not believe government agencies are efficient enough to do that (even if they have money) in such a large scale.

    I think we have wasted so many years criticizing and sabotaging every major initiative and the time has come to let go our hypocratic attitude and welcome such a big initiative. At the very least, this project bring hopes to our unemployed/under employed youth.

    Nobody in his senses would want to kill his baby since there is a remote possibility that this baby if not given good education and if not given proper guidance might become a terrorist if thrown to .......


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