Brochure Emerging Cities

© UK India Business Council, 2009. All Rights Reserved.

OPPORTUNITIES FOR UK PLC IN EMERGING CITIES OF INDIA

Opportunities for UK Plc in Emerging Cities of India © UK India Business Council, 2009. All Rights Reserved.

Contents

04 Acknowledgements

05 executive summAry

07 introduction

10 selection of emerging cities in indiA

14 city ecosystems: understAnding the microdynAmics

18 Business opportunities in emerging cities

22 BenchmArk city: pune

9 emerging cities of india

Kochi

goa

Pune

nagpur

indoreVadodara

ahmedabad

Jaipur

chandigarh

Pune

JaiPur KocHi nagPur

goa indoreaHmedaBad cHandigarH

Vadodara

02 03


FoReWoRDOn behalf of the UK India Business Council, I am delighted to present this report and to support your interest in India’s emerging cities and city-regions. I would like to acknowledge and to thank Mirabilis Advisory and the UKTI teams, both in the UK and throughout India, who so generously provided us with their knowledge and insight, thus ensuring the research would be of the utmost value to British business.This report very much represents the first stage of our work and strategically focuses on key cities where we believe UK businesses have the sector expertise to convert customer needs, (both public and private sector), into contracts.

This focus does not mean that we will not be working with other emerging cities in India, it is simply the start of the journey. Indeed our colleagues in the UKTI India team will be working on your behalf, across a wide range of emerging cities,throughout the next year, and we will work closely with them to ensure that wherever there are opportunities, there will be support to access them.

For the UK India Business Council, the most important aspect of this report is how we convert it into real business. Over the coming months, working closely with our colleagues at UKTI, we will continue to develop market intelligence, build key networks, lead business delegations to these cities, facilitate introductions and support individual cases of business activity. We have a team of experienced professionals both in the UK and India dedicated to capitalising on the great India opportunity. In India we offer a range of practical services to support market entry for UK businesses. Our services include ‘Launchpad’ - a low risk, cost effective way of enabling you to have a full time representative on the ground in India focusing on your local business development without having to establish a direct presence and ‘Hot Desk’ -the provision of world class office infrastructure and admin support ideal for the start of any new project or local initiative as a stepping stone to a more fixed presence. With offices in Mumbai and Delhi and a support network nationwide through UKTI, the UK India Business Council is extremely well placed and resourced to provide service and support when and where it most counts.

The significance of the 2009 election result heralds a new era in India’s development - a development that we believe will offer unparalleled business opportunities. There has never been a better time or a more comprehensive support infrastructure to capitalise on that opportunity.”

eXeCUtIVe sUMMARYBAckground‘Opportunities for UK Plc in Emerging Cities of India’ identifies ‘where’ and ‘how’ UK Plc can take advantage of the opportunities created by the rapid growth of India’s emerging cities and city-regions. Conventionally, business interest from the UK has been generally focused on large established cities. This research aims to position emerging cities and city-regions of India as an equally impressive alternative for investment, business expansion, and development.

The research process involved an in-depth study of the business environments and key priority sectors in select Emerging Cities. One of the key outcomes of this research has been the identification of potential business opportunities within selected cities and city-regions in India based on UK priority sectors, capabilities of UK Plc (with a specific reference to SMEs), trends in UK outward investment and export patterns.

This report aims to highlight the potential drivers, challenges and critical success factors for British businesses as they begin to explore investment opportunities in the emerging cities and city-regions of India. By leveraging the insights in this research we hope you will be able to develop relevant and robust strategies for business expansion, market development, and market entry.

city selectionCity selection followed an iterative process combining both quantitative and qualitative research techniques. The selection entailed the study of a sample of one hundred and seventy nine cities. This included an analysis of the available social, physical and cultural infrastructure, economic and political activity, economic growth, and sophistication of the business environment.

The emerging cities and city-regions that were finally studied in-depth as part of the primary research programme are Ahmedabad, Chandiagarh, Goa, Indore, Jaipur, Kochi, Nagpur and Vadodara. Pune is the benchmark city in the research.

key sectors And opportunity AnAlysisThis research focuses on nine priority sectors of the UK, as identified in a review of regional development agencies and UK Trade and Investment (UKTI) primary areas of work. These include Advanced Engineering, Built Environment, Creative and Media, Energy, Environmental Services, ICT, Financial Services, Food and Drink, and Life Sciences.

For more information on these sectors, please see Appendix 3.

04 05

Sharon Bamford,

Chief Executive Officer,

UK India Business Council


Emerging India may be a complex and challenging market, but it is one that cannot be ignored by UK companies that are seeking to internationalise.Sir Andrew Cahn KCMG, Chief Executive, UK Trade & Investment

We face the greatest challenge to the world economy in modern times...Leaders Statement: The Global Plan for Recovery and Reform, G20 Summit, London, April 2009

eMeRGInG IssUesComparative research across cities suggests certain common emerging issues.

IntRoDUCtIon1

the chAnging gloBAl context2009 has begun on a sobering note. We are amidst a historic economic downturn – possibly the worst ever we will see in our lifetimes. In the next few years, the world economy will likely undergo several painful re-alignments. The survival, growth and success of companies will depend heavily on the strategic choices they make. Small and mid-sized businesses will be especially challenged. Those that had previously been less internationally oriented would do well by looking outward. Those already in the hunt will fare better by following more creative approaches.

As governments and institutions the world over engage to find a way out of the deepening crisis, a greater thrust on emerging markets, including India, is being adopted by global businesses and entrepreneurs in search of new markets for their products and services. The India story is well known across the world. Nearly twenty years of reform have positioned India as a favoured emerging market and investment destination in the world. It has also integrated India to the world economy making it more vulnerable to global shocks and crises than before. As such, economic destinies across geographies are much more closely linked. Interestingly, these circumstances have also led to greater access to opportunities that new India offers.

Discussions on market opportunities in India tend to focus either on urban or rural India. This generalisation belies the hitherto untapped market potential that is represented by urbanising India. The market dynamics of this India are complex and often difficult to comprehend, but there is no question about the unlimited possibilities it offers for economic growth and business development.

uk And indiAIn 2007, India was the UK’s 14th largest destination for the export of goods, and 19th largest source of imported goods – up from 18th and 23rd positions respectively in 2006. In terms of services, India is the 20th most important export destination for UK goods, and the 12th most important source of imports into the UK. Despite these gains, there remains vast untapped potential.

India accounts for just 1.3 per cent of both UK exports and imports. Foreign Direct Investment (FDI) in both directions remains small in relative terms, although volumes have increased significantly over the last five years. The substantial increase in investment flows between India and the UK in recent years has been driven mainly by major acquisitions – both of and by Indian companies. Cross-border acquisitions help Indian companies enter markets, acquire well-known brands, take advantage of a highly skilled work force and apply modern management techniques. There are many opportunities for enhancing trade flows between the two countries and India has announced

Changes in economic geography have precipitated the emergence of city-regions that have enormous potential for UK businesses. Studying cities in isolation, without recognising the existence of the city-region phenomenon, would have resulted in the exclusion of many important and potentially viable business opportunities and growth areas, e.g. Alwar-Neemrana-Bhiwadi (located between Jaipur and New Delhi, it is currently being aggressively developed by the Central and State Governments while being promoted by the City Government); several large businesses have also established their factories / units in this region. Our research lays special emphasis on the economic-geographic development of India’s emerging cities. Leveraging this analysis will help guide and target strategy.

We believe that, when approaching India’s emerging cities, it is essential to focus on the needs of businesses in general rather than be limited by the scope of the priority sectors, as horizontal opportunities are available across sectors. Research reveals some areas in India’s emerging markets that do not fall within the priority sectors framework but have substantial impact on them, e.g. opportunities in Education and Skills Training have emerged as a crosscutting requirement across different priority sectors.

Every city (and the wider region it belongs to) has certain endemic factors that could potentially constitute unique drivers for business or policy leverage. These endemic factors arise out of the existing socio-cultural environment, deep-rooted business traditions, and a traditional community focus on specific sectors, e.g. a factor in the emergence of animation and gaming as a sunrise sector in Pune is the city’s unique ability to draw the best human capital from across the country on a sustained basis helping create a diverse talent pool. The presence of these unique drivers can also help explain why one Emerging City in North India has emerged as the source of a majority of the country’s Chartered Accountants, or why a concentration of nearly 40,000 medical practitioners, largely trained in the UK, are engaged in private practice in another Emerging City in the west of India. Unique drivers for leverage provide useful insight and can guide strategy for tapping the business opportunities available in the emerging cities of India.

Sectoral definitions across India and UK follow varied and differentiated classifications, and may be interpreted differently across markets, e.g. handicrafts in India may map back to the creative industries in the UK. While an overall sectoral framework is helpful in guiding economic strategy, it will be more useful to plot economic activities between the two countries directly. This research adopts the approach of identifying business opportunities within the broad framework of UK priority sectors, and attempts to map the opportunity back to strengths and capacities of industry in UK. Over time, tools of economic engagement between the two countries must include common language and vocabulary.

Globalisation has facilitated unprecedented innovation in the way international businesses deploy and organise resources. The off-shoring phenomenon, pioneered by American companies in India in the early 1990s, has spawned an entire industry resulting in talent pipelines and entrepreneurial supply chains that span Silicon Valley in California to the Golden Triangle of Cambridge-Oxford-London to Bangalore in India. This ’triangulation’ has extended to new service industries like animation, and holds great potential for building and aggregating value. The new urban centres profiled in this research are being explored as emerging innovation regions by global businesses. UK Plc will benefit by expanding its horizons to these cities and regions.

1numerical data for this section has been sourced from gHK (2008), unless otherwise specified

1

2

3

4

5

06 07


ambitious goals for its international trade, aiming to reach 5 per cent of world trade by 2020.

There are currently 580 Indian companies operating in the UK with a cumulative Indian investment of GBP 795 million in 2006-07. Some of the most important Indian companies in the UK include the Tata Group, Anil Dhirubhai Ambani Group, Reliance Industries Ltd., Infosys Technologies, Wipro, HCL Technologies, ICICI Bank, MindTree Consulting, VIP Industries, Thermax India, United Phosphorus, Rolta India, Sundaram Fasteners, and Wockhardt.

These trends indicate that UK companies are gradually but steadily revising their perceptions about India as a trading partner. India is no longer seen primarily as a source of low-cost labour. It is increasingly being seen as a source of value-added goods and services and an important business partner, with particular strengths in services, high-end technology industries (including manufacturing), IT, and contract research and development. Despite the global slowdown, the continued expansion of the Indian economy is well recognised and many UK companies are keenly aware of the need for an increasingly entrepreneurial approach to doing business in India.

An entrepreneuriAl ApproAchEntrepreneurship has long been considered a source of India’s competitive advantage, and a key contrasting characteristic when compared to its neighbour China, the other Asian giant. When we talk of entrepreneurship in India, we refer to the emergence of new businesses pursuing creative ideas to fill market voids, as much as to ’being entrepreneurial’ in a market where development of soft and hard infrastructure has lagged behind the rapid consumer sophistication.

Traditionally, India-facing marketing and business strategies are biased towards the larger and better known cities of New Delhi, Mumbai, Bangalore, Hyderabad, Chennai, and Kolkata. These mega-cities, which are now engaged in a race to establish themselves as India’s premier business destinations, present an interesting paradox. To many they exemplify new India; the fact is that they continue to be bogged down by perpetuating infrastructure challenges.2

While India’s urban giants may dominate the business agenda in the short-term due to the sheer size of their human capital clusters, as well as other historical reasons, we believe it is the country’s less well known and smaller towns and cities that are more likely to produce the economic miracles. Emerging cities across India are prime centres for strong domestic demand, with a rapidly growing middle class (disposable income between GBP 3,528.3 and GBP 17,641.7). India’s middle class today numbers 50 million, but is expected to reach 583 million by 2025 – accounting for 41 per cent of the population and 75 per cent of the urban population. Key areas of consumption are expected to include healthcare, education, transport communications,

food and entertainment, consumer durables and travel.

Our research focuses on these emerging centres of growth in the new India. As the next phase of reforms places greater emphasis on India’s urban development agenda, as well as on governance issues, it is the emerging cities of India that are better positioned to make a generational leap forward and are ideal candidates for doing business with India.

Conventional wisdom suggests that three key factors will affect the long term economic success of emerging cities – infrastructure, human capital and governance. Arguably, the cities led by proactive visionary governments which invest in infrastructure and education will be best positioned to succeed.3 We believe that global business must take an imaginative investment approach. While considering India, it is those businesses that are prepared to engage governments at the state and city levels in India, to further the infrastructure, human capital and governance agendas that are most likely to succeed. By providing easy access to much-needed delivery capacity, companies must embed economic and social development objectives within business goals. Such an entrepreneurial approach is more likely to succeed in the long term.

2a wide range of strategies and projects are being implemented across the public and private sectors in india’s mega cities to reduce the stress on their infrastructure and to enhance their liveability. an example of one such initiative is the Jawaharlal nehru national urban renewal mission (Jnnurm). the impact of these initiatives has not been sufficient in addressing the challenges faced by india’s metropolises, however the lessons learned may help develop interventions that might be useful for the urban development of india’s emerging cities.

3Jones Lang Lasalle (2008)

As the global economy slows down competition intensifies and costs increase, cities outside the established centres offer some of the best business environments for UK companies to consider.Rt Hon Lord Mandelson, PC, Secretary of State for Business, Enterprise and Regulatory Reform

Britain and India today have a relationship that is stronger than ever before…the potential is absolutely enormous for UK and India trade, business and investment.Lord Bilimoria CBE, DL, Chairman, UK India Business Council

08 09


introductionThe selection of India’s emerging cities identifies the rising stars from a cross-section of Emerging Cities experiencing rapid economic growth.

The top four Emerging Cities are: Pune, Ahmedabad, Chandigarh and Jaipur. The remaining Emerging Cities ranked comparably, hence, the selection of the next five cities hinged on current scenarios in the cities, recent government initiatives and the socio-economic environment; Vadodara, Goa, Indore, Kochi and Nagpur complete the set of nine emerging cities that were studied in detail.5

QuAlitAtive methodologyQualitative research was carried out through a process of in-depth interviews, reviews and perception surveys across various professional and social networks. Close to 200 survey responses were analysed, and over 150 key informant interviews were conducted to ensure an extensive and representative coverage. The major primary research included Youth Perception Survey, Business Leaders’ Perception Survey and Analyses of Industry Clusters.

QuAntitAtive methodologyQuantitative research looked at a variety of indicators to measure the potential of Emerging Cities as places to live and work in. For reasons of simplicity, the indicators were grouped according to their effect on different facets of the city. The rationale for selection, as well as interpretation of quantitative data is described below:

SOCIAL INDICATORS include factors like population contained within the city9, its absolute size and rate of growth and the level of literacy10. These factors govern the selection of an urban area as a ’Town’ or a ’City’ or indeed a ’Village’.

5the selection of the five cities after the top four is based on subjective perceptions and does not indicate the superiority of these cities over any others in the nineteen-city set.6uKiBc (2009)

7Jones Lang Lasalle (2008) 8census of india (2001)9see figure 310see figure 4

[Emerging Cities] are the next-generation cities where [UK Plc] can build long-term relationships into the next century rather than the next financial year.Sharon Bamford, Chief Executive, UK India Business Council

figure 3: LiteracY (Per cent)7 figure 4: PoPuLation (000s)8

figure 1 rising stars: a seLection of 9 emerging cities of india6

PUNE AHMEDABAD

INDORE KOCHI NAGPUR VADODARA

CHANDIGARH JAIPUR GOA

VadodaraPune

nagpurKochi

Jaipurindore

goachandigarh

Pune

Kochi

goa

Vadodara

nagpur

Jaipurindore

chandigarhahmedabad ahmedabad

0 1,000 2,000 3,000 4,000 5,000 6,0000% 20% 40% 60% 80% 100%

All cities in the database were assigned weights depending on the basis of how they rated according to the quantitative criteria.

Variable weights were assigned to these indicators - social and cultural infrastructure were assigned higher weights (40 per cent), whilst indicators that measure physical infrastructure and economic characteristics were given equal or slightly lower weights (25 per cent). Social indicators were assigned the remainder of the weights (10 per cent).

This weighting system reflects the importance of various indicators to assess the growth potential of cities. The final ranking of cities as per this methodology was used as the basis for further investigations within the city selection profiled in this research.

The methodology used the frequency of a selected city’s appearance in any particular criterion, followed by allocation of weights, to determine its final ranking in the analysis.

seLeCtIon oF eMeRGInG CItIes In InDIA

10 11


PHYSICAL INFRASTRUCTURE of a city refers to the skeletal structure of the city that supports the activities of its citizens. While availability of a certain quantum of infrastructure may qualify a city as an emerging destination, it is the quality of the infrastructure and related delivery services that underscore its longer-term growth potential. Physical infrastructure would include facilities like transport, roads, and power. Within this spectrum, Jaipur, Vadodara, Kochi, Pune and Ahmedabad rank high.

SOCIAL AND CULTURAL INFRASTRUCTURE INDICATORS describe those parameters that have an impact on the liveability of cities, and have a direct bearing on the quality of human capital in the city. Access and availability of educational infrastructure, good healthcare infrastructure, access to banks, credit, and the availability of recreational facilities determine the quality of life, and standard of living. Ahmedabad, Vadodara, Nagpur and Pune rank high on this parameter.

ECONOMIC INDICATORS of cities comprise a crucial set of indicators to develop an understanding of the growth potential of Emerging Cities. In this case, indicators include comparisons of per capita income and savings, market size and growth, and ranking of cities based on ’To Earn In’ and ’To Live In’ indices.15 Many of the smaller cities have registered the fastest economic growth over the last five years along with the highest asset and financial penetration, as illustrated by the high rate of per capita savings and income and market growth.16

figure 7: numBer of eLectrictY connections (miLLions)13

figure 6: air Passengers (’000s)12

figure 8: numBer of BanKs, HeaLtH institutions and coLLeges14

figure 9: income/ caPita(in gBP)17

11census of india (2001)12Jones Lang Lasalle (2006)13census of india (2001)

14census of india (2001)15indicus analytics (2006)16see figure 9 and figure 1017indicus analytics (2006)18indicus analytics (2006)

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

1 2 3 4 5 6 7 8 9 millions

figure 5: good QuaLitY roads11

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

500 1,000 1,500 2,000

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

0 500 1,000 1,500 2,000 2,500 3,000

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

0 500 1000 1500 2000

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

0 18001600140012001000800600400200

colleges Health institutions Bank

figure 10: marKet siZe (in gBP miLLion)18

Pune

Kochi

goa

Vadodara

nagpur

Jaipur

indore

chandigarh

ahmedabad

1,000 2,000 3,000 4,000

12 13


19further information for companies new to the indian market is available from uKiBc (also refer to appendix 2) 20a proprietary business development tool developed for uKiBc by maPL (2009); see figure 12 22association of British scholars; the organization consists of Barodians (an informal term used to define Vadodara-dwellers) that have either worked or studied in the uK at some point in their careers.

23resurgent rajasthan24Vibrant gujarat

A grasp of the challenges, drivers and critical success factors is an essential prerequisite for UK companies planning to do business in India19. Eventually, however, understanding India’s cities as business destinations requires a deeper appreciation of their ecosystems. This is because of the existence of diverse microdynamics across state boundaries and community demographics. UKIBC’s unique ’City Ecosystem’20 explores key universal components across social, economic, political and cultural dimensions for each of the cities covered under this research. Our research indicates that connecting ‘the dots’ across these dimensions is likely to help UK Plc craft successful business engagement strategies for India’s Emerging Cities.

sociAl And professionAl networksSocial and professional networks refer to the new and old, formal and informal networks and communities that exist within the city. These networks and communities can range from agency led initiatives by organizations like the YPO (Young Presidents Organization) and TiE (The Indus Entrepreneurs) to more off-beat networking initiatives like the city of Pune’s ‘Open Coffee House’ where young technology-entrepreneurs meet every fortnight to discuss innovations, meet with venture capitalists/investors as well as share thoughts on the future of their respective enterprises. A combination of these two types of interactions is facilitating the development of new and influential multi-disciplinary and diverse educational institutions.

There are also interesting examples of organisations like the Association of British Scholars (ABS), which are vibrant in Emerging Cities like Vadodara.22

stAte And stAte Agencies A common feature across Emerging Cities in our research is the active role of state and state agencies in promoting economic development. Tangible examples include Rajasthan’s Bureau of Investment Promotion (BIP) led Resurgent Rajasthan23 and the Gujarat Industrial Development Corporation (GIDC) led Vibrant Gujarat24 . The former has been directly responsible for garnering commitments of GBP 130 million of inward funding through, a strategic set of events and positioning activities over the period 2006-2007.

State Industrial Development Corporations (SIDCs), like the GIDC, play an active role in developing basic levels of infrastructure in key locations to encourage business activity. Other grass-root focused activities include the steps taken by state governments to allow the privatisation of Industrial Training Institutes (ITIs) to promote employment – an initiative that has met with great success for organisations looking to develop talent pools that can cater to niche industries.

CItY eCosYsteMs: UnDeRstAnDInG tHe MICRoDYnAMICs

City

Local Media

BusinessSupport Orgs.

State & StateAgencies

EnterpreneurialActivity

EconomicGeography

Universities &EducationalInstitutions

UrbanInfrastructure

EcologicalFootprint

Social &Professional

Networks

figure 12 citY ecosYstem modeL

14 15


Business support orgAnisAtionsBusiness Support Organisations like the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI)25, as well as, state and city-specific chambers of commerce and industry have established themselves to varying degrees in a cross section of the Emerging Cities. These entities provide business services ranging from, lobbying and representation, sector and industry specific networking interactions and platforms like medium and large-scale conferences that encourage inward investment from national and international players.

entrepreneuriAl Activity Across India, entrepreneurial activity is visibly high. In 2008, one of India’s largest business group, the house of Tata Sons, lent its brand to support the first-ever national campaign on entrepreneurship organised by the National Entrepreneurship Network (NEN). NEN’s Hottest Start-ups Awards generated countrywide interest, and reflected the emergent interest in young people to venture out on their own.26

Chapters of professional network organisations like the Entrepreneurs’ Organisation (EO) are expanding rapidly to Emerging Cities.27

Cities like Ahmedabad and Jaipur, and indeed most of the Emerging Cities, have a legacy of strong entrepreneurial and family-run businesses. A clear shift in thinking is noticeable amongst second, third and fourth generation family business owners, as they expand horizons to modern sectors.

economic geogrAphy The Emerging Cities of India are witnessing rapid urban development. They no longer exist in self-contained silos. With economic development, satellite towns have emerged, and are a common feature across every city in our research. These include Gandhinagar near Ahmedabad and Vadodara; Alwar-Neemrana-Bhiwadi off Jaipur; and Multimodal International Hub Airport at Nagpur (MIHAN). These regions are typically robust manufacturing and service industry hubs with the prevalence of Special Economic Zones (SEZs) that are under varying stages of development. They are usually within a 30-80 km radius of the main city and are considered to be ideal locations for starting new businesses with respect to connectivity and competitive real estate prices.

However, the synergy of a region’s economic geography is not solely dependent on the presence or absence of SEZs. Examples of pre-existing regional industrial belts include the Indore-Pithampur-Dewas, Chandigarh-Mohali-Panchkula and Pune-Pimpri-Chinchwad. While SEZs have brought a different impetus of investment to these regions, they have also benefited from an existing regional commercial and cultural connectivity.

universities And educAtionAl institutionsThe success of a City Ecosystem relies heavily on the availability and quality of secondary education infrastructure. Cities such as Jaipur, Indore and Chandigarh are seeing booming investments in education and training whilst established education hubs like Ahmedabad and Pune are looking at new ways with which to attract talent. A common shortcoming across educational institutions in these cities is the low technical ability and lack of importance given to R&D functions. However, this is likely to change as forward thinking technocrats and educationalists in Emerging Cities like Kochi, Vadodara, and Ahmedabad are increasingly focused on addressing these shortcomings.

urBAn infrAstructure/ecologicAl footprint The City Ecosystem model focuses on the present and future scenario of basic infrastructure like communication (web and mobile), roads, railways, inter and intra-city transport, and power. The findings from the research vary from city to city. Significant opportunities exist in the development of international airports for logistics and passenger travel. Every city is looking at evolving the level of public transport, e.g. Jaipur is undergoing a Bus Rapid Transport (BRT) overhaul; Pune and Kochi are exploring the possibility of implementing metro rail projects.

Embedded in the urban infrastructure is the ecological footprint. Increasingly, businesses and governments are concerned about how cities view their natural resources and are developing strategies to reduce their carbon footprint. A move towards sustainableurbanisation practices is visible and is likely to have a substantial impact on future city ecosystems.

in–city ecosystem perceptions surveyIn our assessment, a good measure for evaluating the business potential of a city is to understand the perceptions of host businesses and opinion leaders. Ninety business respondents were surveyed across the nine selected cities to assess their city’s performance on key components of the City Ecosystem. The respondents include a cross section of stakeholders – business people, senior government representatives, local media and educational institutions in each city.

All respondents were asked to rank their own cities from one to ten (ten being the highest). Table 1 reflects the ranking of the cities under the various parameters. The median of all responses under each parameter constitutes the rank for that city. As is indicative from the range of the total score of each city (sixty-five to seventy-six), a majority of the respondents had a natural bias about the potential of their cities. However, the relative difference serves as a reference to make

25cii; ficci26the tata nen Hottest startup awards are a result of the combined efforts of tata, a rapidly growing business group in india with significant international operations, and the national entrepreneurship network (nen), a non-profit organization, and india’s leader in entrepreneurship education. targeting over 500 nominations across various sectors and geographies in india, Hottest startups showcased the largest number of potential startups through its campaign. of the five winners announced in february, 2009, two were from emerging cities.27entrepreneurs’ organisation

16 17


28uKiBc (2008) 29an in-depth sectoral analysis of these sectors is included in appendix 330gHK (2008)31gHK (2008)

taBLe 1 resuLts of in-citY ecosYstem PercePtions surVeY

7

66

6

6

6

7

98 8

8

8

8

5.5

99 6.5

88

8.56 9

7

76 7373.5

77

7 7

78 8.5

8.5

5

8.5

7.5

7 7 8 88

8

8

8

8

8

85

666

6

655

6.57 7

67

7

7.5

7.5

7.5

7

4

4.57 7

7

7

7

7

7

7

7

79

9

88

88

5.5

5.571 71 70 67 65 65

6665

4

6

Cities in order of ranking - Ahmedabad ranks the highest

BUsIness oPPoRtUnItIes In eMeRGInG CItIesBAckgroundThis research focuses on nine UK priority sectors, as identified in a review28 of regional development agencies and UKTI’s primary areas of work:

Advanced Engineering, including aerospace ,automotive, advanced materials and chemicals;

Life Sciences, including pharmaceuticals, biotechnology (green biotechnology, food plants, microbial research), biomedical research, healthcare and medical technologies;

Energy, including biomass, oil and gas, renewable energy, and fuel cells;

Environmental Services, including cleaner technologies and processes, air pollution control, contaminated land remediation, environmental consulting, marine pollution control, energy management, waste management and recycling, waste and wastewater management, technology for sustainable land use and management, environmental monitoring and instrumentation;

Financial Services, including insurance, corporate financial

services, banking, pensions, asset management, equity management, venture capital and risk finance;

Food and Drink, including dairy production, beverages, cereal processing, specialty foods, primary and secondary food processing, convenience foods and health enhancing foods;

Built Environment, including sustainable technologies and building technologies – green building, product design, manufacturing and engineering, transport and logistics, research and testing;

Creative and Media, including architecture, design, leisure, software, publishing, film and television, the performing arts and music;

Information and Communications Technologies (ICT), including software and IT services, telecommunications and electronics.

Of these nine sectors, the study recommended that five – Life Sciences, Financial Services, Creative and Media and Built Environment – are priority sectors for UK companies looking to do business in India. They are among the sectors which the UK considers its priorities for international promotion and at the same time have huge potential in the emerging Indian cities29.

The diversity of the UK economy, together with the scale of the Indian market, mean that there are no obvious sector picks – all nine sectors which emerged from the mapping study are areas of growth and strategic importance for the UK economy, and they all have potential markets in India. Furthermore, there is scope for most of the sectors to reverse a declining trend in competitiveness, in terms of their share of global exports.30

Indeed, the sectoral overlaps which have emerged from this review, e.g. nanotechnology, which we have profiled under Advanced Engineering, has applications in Electronics, Pharmaceuticals, Biotechnology and Energy; computer games, which have been profiled under Creative and Media, generate revenues and jobs for the ICT and specifically the Electronics sector. Together with the unbundling and globalisation of supply and value chains, these industry overlaps indicate that picking cities only according to their sectoral strengths may prove short-sighted.31

an objective evaluation about growth potential. Ahmedabad ranks the highest in this in-city perception survey, followed closely by Chandigarh and Goa.

18 19

Pune KochiGoa Vadodara Nagpur JaipurIndoreChandigarhAhmedabadParameters

opportunities for social and business networking

Presence of vibrant local media

Presence of active business support organization

support from state and various state agencies

Presence of vibrant language and culture

rate of entrepreneurial activity

economic geography of the city-region

Presence of good and adequate universities and other educational institutions

Presence of adequate and accessible physical infrastructure

ecological footprint of the city

total

Opportunities for UK Plc in Emerging Cities of India © UK India Business Council, 2009. All Rights Reserved.Popportunity AnAlysis in emerging citiesIn our view, it is more important that Emerging Cities are selected for the quality of the business environment and infrastructure. One indicator of this is the presence of successful international companies in those cities, which have tested the business and regulatory environment and may have smoothed the path for new businesses to the city. Location quotient, although sector-based, describes the economic base of a location and may highlight cities where the relative size of existing industries (as measured by employment) provides an indication of how supportive the economic base might be for new entrants. For instance, a city with a high location quotient for medical devices suggests an economy supportive of companies with high-technology inputs and outputs. In these cities, there may already be nascent ‘cluster’ effects, delivering a range of non-sector specific benefits and advantages such as reliable infrastructure, an educated and experienced work force, and an open and informed regulatory environment.32

Companies offering goods or services which are not significantly differentiated from those they offer in their home market need to focus – at least in the beginning – on markets that are closer economically and culturally to the home market, lowering market entry barriers related to marketing. This means that preferred locations are the cities in which the middle class is well represented, with relatively high disposable incomes and exposure to international consumer trends as indicated, for instance, by international travel, penetration of internet, broadband or mass marketing media and the prevalence of English.33

All our emerging cities pass the filters34 described above and we believe there are several more emerging cities35 that would qualify as successful candidates for UK Plc. However, one city stood above the rest.

I strongly believe that if India is to grow in the 21st century, growth has to come from its non-metro cities... as far as lateral growth is concerned [metros] are saturated. So, it is cities like Ahmedabad, Pune… and Chandigarh that will really foster the growth of India in coming years.Devang Nanavati, Nanavati and Nanavati Advocates & Finalist of Times of India’s Lead India Campaign 2007-2008

32gHK (2008)33gHK (2008)34it should be noted that the potential business opportunities included in the respective city profiles comprise an indicative list only. 35see appendix 1

20Opportunities for UK Plc in Emerging Cities of India

OPPORTUNITIES FOR UK PLC IN EMERGING CITIES OF INDIA

PUNE


36see Box: ‘Pune: india’s 7th metro’37Pune municipal corporation

38iBef (2007)39Kopardekar (2008)40monocle (2008)

BenCHMARK CItY: PUnePune is a city with a dual image - a flag bearer of traditional Maharashtrian culture and a modern industrial metropolis. Pune, also called the ‘Oxford of the East’, is known for its strong network of multi-disciplinary and diverse base of educational institutions. It boasts a growing industrial hinterland, with several information technology and automotive companies setting up base in and around the city.

Today, Pune figures prominently on the radar of local, national and international real estate investors and developers. Forbes Magazine rated the city as third best in the world’s top new business hubs after Chengdu in China and Toulouse in France. UN Industrial Development Organisation (UNIDO) earmarked Pune as a Dynamic City Region for Auto and IT Industry, while a study by Trammell Crow Meghraj ranks it as the fourth-best Indian IT destination.

city overviewWith all the characteristics of a major metropolis36, Pune has positioned itself as an economic powerhouse resulting in rapid growth across a number of sectors. It is important to note that these sectors are defined by industries with high growth potential of national and international importance (e.g. Advanced Engineering in Automotive). It is this feature, combined with the city’s ever-increasing ‘soft power’, and high location quotient that attracts the best human capital from around the country.

Pune is at a ‘tipping point’; the city’s growth momentum also benefits from the fact that it is the most eligible candidate city for central government assistance under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Leveraging this status, and recognising the city’s unique potential, the State Government of Maharashtra is now developing an innovative new infrastructure concept - the Knowledge Corridor.

The Knowledge Corridor features a six lane, dual carriage expressway (the first of its kind in India) built to link Pune and Mumbai. This expressway features optic fibre cable links between the two cities along its expanse. The Corridor is defined by six major IT parks - three in Mumbai and three in Pune. These provide excellent IT infrastructure and housing, educational facilities, transport and power provisions that meet global standards37.

physicAl infrAstructurePune’s rapid growth is pushing the limits of the city’s existing infrastructure. As a consequence, a metro is being planned, as is a new airport. Pune has direct flights to Dubai and Singapore. There are plenty of recreational and leisure facilities, a strong network of local as well as foreign banks and shopping areas in the current and upcoming developments.

Pune Airport is situated in the Lohagaon area, about 12 km from the city. Indian Airlines and Jet Airways provide regular flights to Pune from Delhi, four flights a week to Chennai and Bangalore, two to three flights daily from Mumbai and to Ahmedabad, Hyderabad and Goa. Pune has excellent railway services connecting all major cities. Pune is also one of the destinations enroute the famed ’Deccan Odyssey’. India’s first access controlled expressway, the Mumbai-Pune Expressway is a six-lane expressway which extends between the two cities, over a distance of 92 km and is the first of its kind in India of its size with concrete pavements.

industryState Government policies are geared towards sustainable growth for Pune and its geographical neighbours. This includes nurturing industrial clusters, facilitating smooth exit options for sick industries and reviving sick units if viable, streamlining procedures, and strengthening institutional support. Broadly, industrial policy is aimed at:

Pune attracts 20 per cent of the total industrial investment in the country and accounts for GBP 1,411.3 million in IT exports, the highest for a single city.

Magarpatta City, a self-sufficient township has attracted interest from IT companies due to the IT Park being developed within the township. The State-promoted Rajiv Gandhi InfoTech Park at Hinjewadi has attracted several infotech majors from around the world. Top Indian IT players like TCS, Infosys and Wipro have also established a major presence here.

investment climAtePune’s GDP of GBP 16,230.3 million39 and GDP growth rate of over 15 per cent (until 2007)40 relies heavily on both domestic and overseas investment. According to a Forbes survey in 2006, Pune was featured as one of the top ranking emerging cities in the world. Demographics also make Pune an enviable investment destination with over 50 per cent of the population being under the age of thirty.

2nd largest city in the state of Maharashtra (5.1 million population)

8th largest city in India

100+ educational institutes and 9 universities

76.90 per cent literacy rate

Pune: IndIa’s 7th Metro?

According to a recent study conducted by ASSOCHAM Eco Pulse (AEP), Pune is set to join the league of India’s six metropolitan cities with the pace of development catching up fast in providing infrastructure facilities, business friendly environment, diverse avenues for higher education & training, and employment opportunities.

The study on the “The 7th Emerging Metro City in India” analysed 4 Emerging Cities: Pune, Ahmedabad, Lucknow and Chandigarh, ranking them on 8 parameters necessary for a metro city. These include social infrastructure, infrastructure availability, real estate cost and availability, transportation facility (connectivity), presence of quality educational institutes, employment opportunities, facility of financial services and business environment.

Pune ranked first across 5 of the 8 parameters in the league tables

There are a number of reasons why [UK Plc] should look at Pune favourably. The quality and ready availability of top-class manpower, the level of SMEs already existing in the city…and the focus on infrastructure by the state government make this city an ideal region to do business [with].Anant Sardeshmukh, Director General, MCCIA

PuNE IN NuMBErS

Strengthening the micro, small and medium manufacturing enterprises

Providing special incentives for units in low Human Development Index Districts

Promoting mega projects (defined by an investment of over GBP 72.7 million or generating employment for over ever 1000 persons)

Promoting development of new industrial townships38

PUNE PUNE22 23


soCIAL InFRAstRUCtUReheAlthcAreRuby Hall Clinic and Jehangir Hospital are prominent hospitals with well equipped staff consultants, panel doctors and paramedical staff. Ruby Hall Clinic has state of the art facilities in cardiology, cardiac surgery, neurology (includes a nuclear science centre), diagnostic centre, intensive care units, a blood bank and cancer unit.

universities And educAtionAl institutionsPune has more schools, colleges and universities than any other city in the world. Famous institutes like Pune University, Film and Television Institute of India, National Defence Academy, Armed Force Medical College and College of Military Engineering are situated here. Interestingly, Pune is the largest centre for Japanese learning in India.

The Deccan College and Fergusson College are amongst the most reputed colleges of the country. Symbiosis International University, which operates thirty three different colleges and institutions in the city, is one of India’s largest private universities. Its institutions, namely The Symbiosis Institute of Management Studies, Symbiosis Institute of Business Management and Symbiosis Centre for Management and Human Resource Development are amongst the top management institutes in the country.

ILS Law College, established by the Indian Law Society is one of the top ten law schools in India. Established medical schools such as the Armed Forces Medical College (AFMC) and Byramjee Jeejeebhoy Medical College train students from all over Maharashtra and India, and are considered to be premier medical colleges in India. Military Nursing College (affiliated to the AFMC) is ranked as a top nursing college in the world.

In addition to the University of Pune, Pune is home to several research institutions of national importance. Located adjacent to the university is the National Chemical Laboratory (NCL), one of the Indian Institutes of

Science Education and Research (IISER) and the Centre for Materials for Electronics Technology (C-MET). The University campus houses the Centre for Development of Advanced Computing (C-DAC), Inter-University Centre for Astronomy and Astrophysics, the National Centre for Radio Astrophysics (NCRA) and the National Centre for Cell Science (NCCS).

The City is also home to India’s premier antibiotics research institute, Hindustan Antibiotics Ltd. (HAL), established in the year 1954.

[For graduates] Pune is now being looked as at a city to ‘migrate to’ rather than ‘migrate from’ post [their] education. Sector-wise, the city is widespread and not dominated by one or two areas. In the last 5 years, services as a whole has done well – BPO, KPO, Hospitality, Healthcare, Retail etc. This has complemented the already well established manufacturing and production base of automotive and ancillary industries.Pratik Ghosh, Manager, Commercial Initiatives, Forbes Marshall

PUNE PUNE24 25


CItY eCosYsteMsociAl And professionAl networksThe cosmopolitan nature of the city combined with an entrepreneurial spirit amongst technocrats has facilitated the creation of diverse networking-oriented groups apart from conventional organisations that now mark the landscape in most cities. Bar Camp and Open Coffee Club are two such examples of entrepreneurship support groups that provide a formal interface with venture capitalists, private equity investors, and mentors for young businesses.

locAl mediAEnglish dailies such as The Times of India, The Indian Express, Pune Mirror and Sakaal Times (formerly Maharashtra Herald) have editions based in Pune. Marathi newspapers such as Sakaal, Loksatta, Lokmat, Kesari, The Maharashtra Times and Pudhari are also popular.

lAnguAge And cultureAs a city with a predominantly Marathi-speaking population, Pune is closely associated with Marathi art, literature, drama, and religious beliefs. Many Marathi writers, poets, actors, singers, and other celebrities live in Pune. In recent years, multiplexes, malls, and clubs have also opened up as the younger, westernised college students, and young professionals make their presence felt.

Pune is said to be the cultural capital of Maharashtra. “It epitomizes the Marathi culture which lays emphasis on education, arts and crafts, music and theatre”. Every year, it plays host to Savai-Gandharva, “a three night long cultural programme of classical music”. Pune culture reflects a blend of traditions with modernity.

Case studY P1: CoMMonWeaLth Youth GaMes, 2008

India’s cities are leveraging opportunities presented by mega-events for urban development and skills generation. The Investment Commission of India, in its 2005 report, recommends that cities should host mega-events to catalyse rapid economic development and improve regional competitiveness. Pune hosted the third Commonwealth Youth Games in 2008, the first in Asia. The Pune games, which served as a pre-cursor to the Delhi 2010 Commonwealth Games, played host to young athletes from seventy-one commonwealth countries. The event, conducted between the 12th and 18th of October, 2008 – included a Youth Baton relay that toured the country and culminated in Pune along with grand opening and closing ceremonies. Capitalizing on the ‘youthful’ image of the city, the Commonwealth Youth Games were instrumental in identifying and building on the inherent strengths of Pune.41

Business supportWith the presence of almost every major industry within the economic geography of Pune, there is a need for business support functions that enable maximum utilisation of resources and networks. The Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) plays a vital role in developing task forces for key industries, creating networks and spurring innovation in untapped sectors. Apart from the MCCIA, there are organisations like the British Business Group (BBG) and UKTI offices that enable connections and provide services to organisations with British roots or British interests.

stAte And stAte Agencies The Pune Development Authority (also known as the Ministry of Urban Development of Pune) is responsible for Public Works, the Pune Municipal Corporation (PMC), Pune Cantonment Board, Dehu Road Cantonment Board, Khadki Cantonment Board and the Pimpri-Chinchwad Municipal Corporation. Are all engaged in the development and maintenance tasks of the city.

42saraph (2008) 43BBg

Case studY P2: IndIa’s FIrst ChIeF InForMatIon oFFICer – In Pune

India’s cities are characterised by unplanned urban infrastructure development. Often, the lack of coordinated and effective central planning is a result of information asymmetry. In January 2008, to address this challenge, the first-ever Office of Chief Information Officer was created by the Software Exporters Association of Pune (consisting of over one hundred and fifty IT companies). Developed as a public-private partnership, the initiative aims to create a range of shared information services for the city. The partnership is open to any government organisation that wishes to improve public service delivery through the effective use of information. The CIO’s core function is to make connections and collaborations between various elements of a city.42 With a mission to create products like a common access ‘Pune Card’ (an all encompassing data storage device for every citizen’s transactions, whether financial or information based) the CIO’s office believes that Pune can get more organised. Pune’s eminent citizens, too, believe the environment is sufficiently forward thinking for the CIO’s office to make a positive impact on the city.43 Plans include an initiative to make Pune India’s first wireless city. The Intel Corporation, Pune Municipal Corporation (PMC) and Microsense have joined hands to commercially roll out the first phase of a Wi-Fi and WiMax network in the city. The first phase of the Unwire Pune project deployment aims to provide wireless connectivity in a 25 sq. km. expanse of the city.

41commonwealth Youth games (2008)

PUNE PUNE26 27


economic geogrAphyAs a manufacturing and IT hub, there is only as much infrastructural development that can take place within the conventionally understood boundaries of ‘Pune’. Quite like Delhi, which expanded into satellite towns of Gurgaon, Noida and Ghaziabad to create the ‘National Capital Region’, the economic geography of Pune now stretches across several areas.

entrepreneuriAl ActivityPune attracts talent because of the high density of higher education institutes present in the city. Forums like Bootstrap-Pune, The Pune Freelance Meetup Group, and Entrepreneurs’ International are spawning a generation of entreprneurs.

TATA-NEN’s ‘Hottest Start-ups’ awards for 2008 showcased forty-one new companies based in Pune.46 The IT sector has often been the mainstay of entrepreneurial activity. As an automotive hub, the ancillary industry catering to major players has also created room for innovations and product design.

Case studY P4: destInatIon Pune – a storY oF tWo entrePreneurs

Anthony Hsiao and Nick Adams, graduates of London-based Imperial College, decided to look eastward after completing their respective courses. India was a natural market choice for them to start a business in travel and internet solutions. The more difficult question then became, where in India?

A blog post titled “Can Pune become the next Silicon Valley of India?” offered some clues. Pune had all the characteristics for a thriving entrepreneurial ecosystem, offering low real estate prices, room for development, and an emerging and respectable niche as a location for global business.

“As budding entrepreneurs interested in providing a broad-based service, we felt that we’d drown in a city like Mumbai, Delhi or Bangalore. Pune was clearly a more interesting option for us considering the fact that it’s an IT city with a creative undercurrent and very young”, says Nick Adams.

So in September of 2007, Nick and Anthony headed to the ‘Oxford of the East’. Without any real support systems in place, the two threw themselves into the hustle and bustle of setting up a business in a foreign city and have since, not only learned to stay afloat, but swim confidently. Their website, www.entrip.com, is an online integrated travel utility that helps people plan their trips, capture experiences and share them in a meaningful way.

Nick and Anthony have since appeared in a Bollywood movie, made new friends and set themselves up as role models in an active business community thriving with budding entrepreneurs. They are regular invitees at the city’s various networking events organised by the ‘Open Coffee Club’ and ‘Bar Camp’. They believe the business camaraderie in these communities helps establish the required level of comfort necessary for expat entrepreneurs like themselves.

44mcci 45Pune municipal corporation 46tata nen Hottest startup awards 2008

Case studY P3: PIMPrI ChInChWad

The twin cities of Pimpri-Chinchwad have managed to maintain their separate identity despite being in the shadow of the cultural capital of Maharashtra - Pune. The industrial belt of Pimpri-Chinchwad includes a wide range of industries like automobiles, pharmaceutical and biotechnology with various National and Multinational companies like Forbes-Marshall, ThyssenKrupp, Alfa Laval, Sandvik, Finolex and SKF. The auto cluster in Pune is almost entirely based in the 65 sq km Pimpri Chinchwad area. The city currently has 8,000 engineering units of various sizes including those of the major auto manufacturers. Puneites often refer to the region as the ‘Detroit of India’. Major automobile companies like Bajaj Auto, Tata Motors (formerly Telco), Kinetic Engineering, Force Motors (formerly Bajaj Tempo) and DaimlerChrysler dot the landscape of this area.45

Thanks to its dreamers and planners, Pune is shattering the back office paradigm. After a boom decade in IT and car manufacturing, the city has embraced design, animation and gaming – sectors formerly considered the preserve of the developed world, and consequently, found another economic gear.David Lepeska, Monocle

PUNE PUNE28 29

44


MAJoR PLAYeRs ACRoss KeY PRIoRItY seCtoRs

SECTOR MAJOR PLAYERS MAJOR ACTIVITIES

advanced engineering

SECTOR MAJOR PLAYERS MAJOR ACTIVITIES

Built environment

Creative and Media

environmental sciences

Indian Players: Bajaj Auto; Tata Motors; Force Motors; Kinetic Motors; L&T; Apollo Tyres; Accurate Engineering; Deepak Fertilisers; Bharat Forge Ltd.; National Chemical Laboratory (NCL)

uK MnCs: JCB Manufacturing; Caepro Technologies Pvt. Ltd.; Helical Technology; CP Engineering; Buro Happold Consulting; Kingspan India; Romax Solutions; Arco Safety Clothing & Equipment India Pvt. Ltd.

other MnCs: Daimler Chrysler India; Piaggio Vehicles; John Deere; Toyota Kirloskar; Carraro; Seco Tools; ZF Steering

Financial services

Foodand drink

ICt

Life sciences

Indian Players: Panchshil; B.G shirke; design Concepts; tata technologies; tata autoComp systems; neilsoft

uK MnCs: Benoy

other MnCs: Cummins research and technology India Ltd.; dana Inc.; LG

Indian Players: thermax; Praj Industries

other MnCs: suzlon

Indian Players: national Film archives; FtII; sakaal Group; taj Blue diamond; anibrain; selve

uK MnCs: Britons Carpet; Get through Guides

other MnCs: nvidia India

Indian Players: state agriculture department; Maharashtra association for the Cultivation of science (MaCs); national Chemical Laboratory (nCL); thermax

other MnCs: Forbes Marshal; dow

‘Detroit of the East’; Manufactures most auto components for world markets; Accounts for more than 50 per cent of automobile production in India; 70 per cent of SMEs based in Pune are dependent on the Auto sector; 50 per cent of new investment in the region between 2001-05 was in the auto sector

Indian Players: Bajaj allianz; Bank of Maharashtra

uK MnCs: hsBC, standard Chartered and PWC

other MnCs: KPMG; e&Y

Indian Players: Gits Food Products; Pravin Masale; Venkateshwara hatcheries Group; Venkys; Chordia Group; Weikfield Products

other MnCs: Frito-Lay; Cargill Foods; tetra Pak; Coca Cola

Indian Players: Infosys; tech Mahindra; Wipro; Zensar technologies; dishnet; tata Consultancy services (tCs)

uK MnCs: delcam software India; hsBC software; Cerillion technologies India

other MnCs: IBM; Cognizant; amdocs; eaton technologies; Convergys; MPhasis; Wns; eXL

Indian Players: shreya Biotech; hindustan antibiotics; national aIds research Institute; national Chemical Laboratory; national Institute of Virology; Jehangir hospital; ruby hall hospital; serum Institute; Bilcore

uK MnCs: GlaxosmithKlein

other MnCs: emcure Pharmaceuticals

Almost 20,000 people are involved in the Design sector; Bharat Forge, Honeywell Automation India, and Atlas Copco are developing design divisions in Pune

Development of the world’s largest wind-park in Dhule (Maharashtra) is underway. It’s intended capacity is well over 1,000 MW; Matrix– a new research and development centre by Praj industries-was launched in April 2008, focusing on process development for high-energy ethanol blends; The Industries of automobiles (and auto-components), Biotechnology and Agro Processing have encouraged the development of the Energy Sector

Creation of the ‘Animation and Gaming’ Committee at the MCCIA with goal of attracting global players in the field and making the city a ‘hub’ for such activities; Well equipped infrastructure (auditoriums, theatres) for artists along with a wide cultural mix due to its young population; Entrepreneurs are increasingly shifting to the creative arts in order to cater to the city’s neighbour (Mumbai) and a growing middle class within the city itself

Exhibited Interest in best-case practices and technologies from global players in this space

Major players in banking and financial services have or are in the process of setting up back-office operations in Pune; Increased entrepreneurship activity has put the city on the radar of PE firms and VCs

Almost two thousand primary, secondary and tertiary units are engaged in food processing;

A 200-km floriculture park, 40 km from Pune, is to promote the Dairy and Floriculture sector;

A Key marketing centre for agricultural products

Chordia Food Park is the first private food park in the country

Knowledge corridor between Mumbai and Pune

Rajiv Gandhi InfoTech Park; Over hundred new IT companies have been registering every year since 2003; Export turnover in 2005-06 was GBP 1,324.8 million; The IT industry registered a growth of 48 per cent; Eighty-three new IT parks are coming up in the city

the country’s first penicillin factory was setup by hindustan antibiotics in 1954 in Pune; 136-acre Biotech park has been established; India’s first Biotech zone is in Pune; 50 per cent children in the world are immunised using vaccine produced at the serum Institute

energy

PUNE PUNE30 31


cater to the UK and India market.

This opportunity demonstrates a market entry point to tap the growing knowledge industry market in India.

The opportunity could help create potential linkages with UK industry capacity in the ICT, and Creative and Media sectors.

Within these, the sub-sectors it maps back to is IT, Software, Graphics, and Gaming.

The opportunity owner is seeking tie-ups for knowledge development; Looking to partner with firms for development of content.

The opportunity could help create potential linkages with UK industry capacity in the Financial Services, ICT, and Creative and Media sectors.

Within these, the sub-sectors it maps back to are Investment Management, Corporate Finance Services, Banking, risk Finance, Publishing, and BPO.

The opportunity owner is looking for strategic partnerships / collaborations to build capacity in its area of expertise. It is also seeking a possible merger opportunity in the knowledge services industry exists to develop niche knowledge-based products.

The opportunity owner also seeks to co-develop research materials like business intelligence journals, research products and sector specific insights that

PotentIAL BUsIness oPPoRtUnItIes

P1 is an enterprising start-up, led by a young team, which develops easy-to-use software in areas of Event Management and Product Engineering. They were nominated for the Tata NEN Hottest Start-up Award 2008. Established in March 2007, its annual turnover is approximately GBP 14,500.

The company has three active and successful service offerings (internet-based tools) currently in the market. Their products are designed with the explicit intention of helping firms grow using simple and cost-effective technology solutions to everyday problems. One of their flagship products has been ranked as one of the top nine event management websites by EventsAuthority.com

It has also developed a cell-phone based intelligence tool for the Pune police. It has also provided technology-based product-engineering services for three firms, one of which is the UK-based Insight Productions. Their other product contracts have come from firms based in India and South Africa.

The firm has a partnership with Insight Productions in the UK for the development and maintenance of their online business-social web application. All the firm’s servers, networking bandwidth and related systems are hosted and leased out from vendors in the United States.

Its three-to-five year vision is to become a major player in the event management software and applications space.

foreign companies in place (whose nature it has not disclosed), it does not have any financial participation from a foreign partner

While some of its research work is driven by client-briefs, most research reports are developed as off-the-shelf products. Current verticals include research services (custom and off-the-shelf), outsourcing practice, and an online knowledge portal. The portal hosts an aggregation of proprietary and third party content and a unique community of investors and advisors.

Along with the publishing traditional research products, its research fills the niche voids of market knowledge that exist today, e.g. legal services, publishing, analytics research outsourcing, and educational/e-learning outsourcing. To take this further, it is currently developing interest groups or communities around these subjects with the intention of bringing buyers and providers of these services together. Towards this, they are planning to hold a conference in the UK and the US, in the first quarter of 2010.

It caters to firms in the Financial Services, Pharmaceuticals, IT, Creative and Media, Manufacturing, BPO and Healthcare sectors. Current clientele includes MNCs, international consulting firms, investors, asset management companies, BPOs, KPOs, IT firms, brokers, retail investors and advertising agencies, 75% of their clients are based outside India (Most of EU, Australia, US, Singapore).

Over the next few years, its growth strategy revolves around positioning itself as a top-of-the-line research brand that provides thought leadership within its area of expertise.

The opportunity could help create potential linkages with UK industry capacity in the ICT, and Creative and Media sectors.

Within these, the sub-sectors it maps back to are IT, Software and Graphics.

The opportunity owner is looking for collaboration with UK based experts in domains of Events, Tourism, Film, TV and Media on existing and forthcoming products.

PUNE PUNE32 33

P3 is a young firm that deals in graphic design, game development and animation. Established in January 2008, it currently employs 9 people. It provide digital arts solutions like animation, graphic design, game development and production on User Interface (UI) to clients. Past clients include Microsoft, Wipro, MTV, Syntel and Big Animation. They also develop games for a US-based game studio. The firm has tied up with Kurukshetra University (Haryana) to provide animation and gaming training, and has also signed agreements with engineering colleges in Jodhpur, Bhopal and Karnal to develop animation courses.

P2 is an end-to-end research and information provider. Established in 2000 as a website, the firm re-oriented itself towards providing more ‘traditional’ research products after the crash of the dotcom bubble. The firm now has over 70 employees and is led by a dynamic and experienced team.

It has been ranked as one of ‘the top 10 independent research and data providers on outsourcing, by the Black Book of Outsourcing, for two years (2008 and 2009) consecutively now. Its research has been quoted by eminent sources like the Financial Times, Times Magazine, The New York Times, Washington Post amongst others. The company is targeting 50-60 per cent growth per annum, for the next 3 years and aims to be one of the top research brands in the country.

Although it has several business partnerships with

BUSINESS OPPORTUNITY OWNER LINKAGE WITH UK INDUSTRY CAPACITY



BUSINESS OPPORTUNITY OWNER LINKAGE WITH UK INDUSTRY CAPACITY BUSINESS OPPORTUNITY OWNER LINKAGE WITH UK INDUSTRY CAPACITY

The opportunity could help create potential linkages with UK industry capacity in Creative and Media and Financial Services in the sectors.

Within these, the sub-sectors it maps back to are Publishing, Banking, and risk Finance.

The opportunity owner is looking for content partnerships across the broad range of Financial Services. It is also looking to expand market reach across India and internationally.

P4 is a niche publishing company focused on banking, financial services and insurance. Established in 2006, they currently employ fifteen to twenty people. The firm publishes a renowned journal, which is a continuous source of information for the banking industry on the areas of risk management and compliance. It also publishes the Indian Banks’ Association’s flagship magazine.

The firm also conducts and publishes market/survey reports and hosts industry conferences along with providing a wide range of consulting services within its area of expertise to banks, suppliers and investors. They have organized four editions of their annual summit on risk and compliance. They also organised a payments summit in 2008, the first in an annual series. Their summits have seen sponsorships from Oracle, Datacraft, Nokia, Tata Consultancy Services, HCL, SAS, Cisco, Infotech, Websense, Dow Jones and Experian.

While the company does not have any overseas clients or experience, it is led by a management team that posses vast international publishing and banking experience. They were also featured as a Hot Start-up by Tata NEN’s Hottest Start-ups Award in 2008.

The opportunity could help create potential linkages with UK industry capacity in the Built Environment sector.

Within this, the sub-sectors it maps back to are Green Buildings and Sustainable Building Technologies.

The opportunity owner offers the routes for collaborations:

1. Endowment to cover cost of construction

2. Technology demonstration in the exhibition centre

3. Development of Library and related infrastructure

4. Membership of the Centre, which includes access to information and discounts on the Centre’s publications and programmes

5. Contribution in content development, by sharing technical knowledge base

In return, the opportunity owner offers opportunities for co-branding, membership benefits, a networking and marketing platform, opportunities to engage in advocacy of green building technology, and participation in the Centre’s outreach programmes.

P6 is a Public-Private Partnership between the Pimpri Chinchwad Municipal Corporation (PCMC), International Institute for Energy Conservation-India (IIEC-India), Science and Technology Park (STP), and United States Agency for International Development (USAID).

The Centre is the result of the evolution of a programme that was initiated by IIEC India and USAID in 2004. The programme aimed to promote sustainable building technologies, though policy changes, stakeholder engagement, performance assessment tools, and fiscal incentives. The programme also developed a voluntary assessment rating and certification mechanism that judged constructions according to the Eco-housing assessment criteria. The first version of these criteria was developed for the Pune Municipal Corporation (PMC), and was later adopted by the Pimpri Chinchwad Municipal Corporation (PCMC) and the Municipal Corporation of Greater Mumbai (MCGM).

The Centre was envisaged to give the project an institutional basis for further development. Its scope of activity has been limited to technology demonstration, undertaking training programmes, certification of new buildings, research and technology incubation. Its focus areas are; energy efficiency, eco-friendly construction material, water management, sustainable land use techniques, health-enhancing techniques, transport and logistics, and pollution.

The Centre is in its initial phases of development, with IIEC India filling in as the principal implementing agency. Land for construction of the Centre’s facilities has been allotted by the PCMC, and design for the facilities has been finalised by IIEC India.

PUNE PUNE34 35

The opportunity could help create potential linkages with UK industry capacity in the ICT and Financial Services sector.

Within these, the sub-sectors it maps back to are Corporate Financial Services, Banking, Asset, Investment and Equity Management, and IT.

The opportunity owner is interest in mergers/acquisition for collaborative business development with UK firms in the relevant verticals.

Given the growth envisaged by the opportunity owner, the company would also need to engage with specialists in the relevant domains to develop and design products.

P5 is a firm established in April 2003 as a 100 per cent export company (EOU) with the intention to provide skilled services to customers in US and Canada primarily. Its current turnover is GBP 250,000, and it employs twenty people.

The firm started with a focus on custom web application and development using open source technologies with small to medium businesses (SMBs) as clients. Consequently, the firm developed several e-commerce websites allowing businesses to have a complete web presence and online payment integrations.

While the company does not posses any international experience, it has a reputation of retaining 90 per cent of its client base.

BY 2012, the company hopes to achieve the Capability Maturity Model (CMM) Level 3, along with becoming a million-dollar company. It is in the process of targeting Fortune Companies in the Financial, Hospitality and e-learning verticals.

The opportunity could help create potential linkages with UK industry capacity in the Life Sciences sector.

Within this, the sub-sectors it maps back to are Pharmaceuticals, Biotechnology, Food Plants, Microbial research, Biomedical research, and, Diagnosis.

The opportunity owner is looking to collaborate with UK companies to co-develop and manufacture low-cost molecular diagnostic kits to cater to the Indian market.

P7 is a biopharmaceutical and biotechnology company that was setup in 2005. The company was incubated at the Science and Technology Park (STP), Pune, and currently employs forty people. Its turnover for 2008-09 was GBP 436,700; its target for next year is GBP 1.164 million. It is lead by a team of three vastly experienced managers, two of whom are doctors. The company’s management publishes regular research papers in many eminent international trade journals.

The company deals in four main verticals; contact research, veterinary genomics, molecular diagnosis and agrobiotics.

The company undertakes contract research in the fields of molecular biology, gene expressions, protein expressions, allelic discrimination, molecular cloning, DNA sequencing, and pure genomics. Its clients include Government agencies, Ministries, and Pharmaceutical


companies amongst others.

It is the only company in South Asia that caters to the veterinary sector as a separate commercial vertical. Its present focus in limited to cattle and it soon plans to branch out, and cater to the livestock sector as a whole. It offers genetic selection services, artificial insemination services, and special selection of cattle. They have already screened over 2000 animals in the past two years. Their clients include the country’s major milk cooperatives. They are also in talks with the Government of Maharashtra to collaborate in this sector.

Molecular diagnosis is the largest vertical of the company. It has a network of over 600 practices all over India, which offer diagnostic services. Its in-house R&D cell develops diagnostic products for this vertical. They will soon be launching seven research products and three molecular diagnostic products.

Agrobiotics is the most recent vertical that the company has entered. It is launching agrobiotic diagnostic kits this year.

Over the next few years, the company plans to enter the predictive genomics sector.

The opportunity could help create potential linkages with UK industry capacity in the Advanced Engineering sector.

Within this, the sub-sector it maps back to is Automotive.

The opportunity owner is looking for knowledge partners for technology transfer from the UK in the auto sector. Its long-term vision includes the development of a comprehensive research programme.

The opportunity owner is also open to providing local incubation and infrastructure facilities for UK auto companies looking to enter the Indian market.

facilities. Currently, over 400 companies are using the Institute’s facilities. Memberships are also available for regular or long-term users. This has generated revenues of GBP 233,000 in 2007-08 and target for 2008-09 has been set at GBP 582,000.

The Central Manufacturing Technology Institute (CMTI) currently provides technical consultancy, support for establishing technology centre, implementation of ICT solutions, and training to the Institute. The Institute’s facilities have been used by Tata Motors to test the Nano and the new Indica, and by Volkswagen to train and identify potential employees.

The Institute is now planning a new design and style studio, requiring an additional investment of GBP 728,000. The studio will function on the lines of the other centres by providing pay-as-you-go services. The studio will provide facilities in modelling, analysis, simulation, computer aided performance development, digital prototyping, specific applications and product development.

The Institute is also set to host UNIDO’s auto cluster development programme in Pune. From its end, the Institute is leveraging its excellent infrastructure facilities to facilitate UNIDO’s training and cluster development programme.

The Institute’s long-term vision envisages the development of a vast research and training programme.

All the above are live business opportunities in Pune-based organisations. If you are interested in finding out more about any of these opportunities, please contact UKIBC who will be able to facilitate an introduction.

Case studY P5: GaMInG and anIMatIon In Pune

Often the existence of one sector and industry spurs the development of another. In some cases, the core expertise and culture built in one industry lays the groundwork for exploitation of newer areas. With the mission to make Pune a global animation and gaming hub and a goal to attract top global players into the city, the MCCIA set up a separate committee focusing purely on the animation and gaming industry.48

Pune has forged partnerships across USA, UK, Canada, Korea, Japan and China (established A&G hubs worldwide); established educational institutions in the area and most importantly – brought stakeholders, producers and investors onto a common platform.49 Major players in the space include Krayon Pictures, Phoebus Creations Media, Toolbox Animation Studio, Ubisoft and Jump Games.

48mccia 49Kulkarni (2008)

PUNE PUNE36 37

P8 is a SPV established in 2006 under the Industrial Infrastructure Upgradation Scheme (IIUS) 2003 of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry to provide common development facilities to the auto sector. The Pimpri Chinchwad Municipal Corporation (PCMC), Government of India (GOI), All India Rubber Industries Association, Association of Promotion of Plastics, and Mahratta Chamber of Commerce, Industries & Agriculture (MCCIA) support the Institute.

The Institute received an initial grant of GBP 9.7 million from the Central Government to meet its infrastructure expenses, and setup three Centres of excellence specialising in auto electronics, computer-aided manufacturing, and rubber, polymer and plastics. These Centres provide technical support to members and contract-consultancy services. Built-up area of the Institute is close to 100,000 sq. feet.

The focus area of development was auto-components and ancillaries. Facilities offered include, environmental testing, rubber and polymer laboratory, CAT/CAM centre, design and style studio, rapid prototype development, incubation, and training.

The Institute generates revenues by charging users for



KeY oBseRVAtIons

Pune has broken away from the conventional ‘back-office’ perception that other cities like Hyderabad and Bangalore have. This has been largely due to the entrepreneurial nature of the city with a penchant for design.

The IT industry has evolved to cater to creative spaces such as animation and art.47

There is a large SME capacity that caters to automotive and manufacturing based organisations.

47see case study P5: “gaming and animation in Pune”

Rapid infrastructure development is underway with plans for a new airport and a metro service to support the growing population and demands on the city’s current facilities. In order to break the clutter, the new international airport of Pune (targeting a 2013 completion) will be 40 km from the city centre. Hence, integrated transport projects are needed.

PUNE38

Opportunities for UK Plc in Emerging Cities of India

uKIBC new delhi Fourth FloorStatesman HouseBarakhamba Road, Connaught placeNew Delhi 110001T: +91 99 582 99 247

uKIBC MumbaiLevel 9, Platina, G- Block, Plot C - 59,Bandra Kurla Complex (near Citibank building)Bandra (East), Mumbai – 400 051.T: +91 (0) 22 3953 0504

uKIBC London 12th Floor Millbank Tower,21-24 Millbank, LondonSW1P 4QPT: +44 (0) 207 592 3046

Whereas every effort has been made to ensure that the

information given in this document is accurate, neither

UK Trade & Investment nor its parent Departments (the

department for Business, Enterprise & Regulatory Reform and

the Foreign & Commonwealth Office), accept liability for any

errors, omissions or misleading statements, and no warranty

is given or responsibility accepted as to the standing of any

individual, firm, company or other organization mentioned.

Brochure Emerging Cities

Documents

Transcript of Brochure Emerging Cities