Chennai enjoys a leading position in the services industry today primarily by virtue of its services mindset. The city's vibrant entrepreneurial culture has been brilliantly complemented by an unrelenting focus on consistent quality, superior customer experience and sustainable operating models.
Chennai is an epitome of Tamil Nadu’s transformation from a primary-producing economy to a services behemoth, powered by software, entertainment, news and media, trucking, food services, banking, accounting, architecture, construction, industrial design, education, health care and organised retailing.
The other key strength of Chennai that has facilitated the growth of the services industry is the city’s evolved education infrastructure.
Apart from high-quality education, it has a good number of engineering, arts and science colleges, and polytechnics, and a high enrolment ratio in higher education.
The services sector here, much like the manufacturing sector, is not just attracting the best talent from around the country, but also drawing MNCs and investors on account of its large pool of educated and disciplined workforce.
Chennai also provides an expedient growth ecosystem. Like any other industry, the services industry too is not an island unto itself.
Blessed with the alignment of industries such as IT, automotive, healthcare, textile, financial services, leather, hardware, semiconductor and telecom, Chennai is well-poised to harness the heterogeneity that lends this growth ecosystem its value, and capitalise upon the power of synergy resulting in new ideas and innovative approaches.
A recent Nasscom-A T Kearney study on location road map for IT-BPO growth named Chennai a ‘Leader Location’. Interestingly, according to the same study, Tamil Nadu is the only state in the country that can boast of the maximum number of potential locations—Coimbatore, Trichy and Madurai named ‘Challenger’ locations and Salem a ‘Follower’ location.
Indeed, growth comes with its attendant challenges. Chennai needs proactive measures to manage growth effectively. One key risk posed by growth is that of an overstressed system. It is important for infrastructure growth to keep pace with the growth of the industry. Sustained investment in augmenting infrastructure such as roads, water, power and realty will help the industry to expand.
The city also needs to work more aggressively towards improving the quality of life, and increasing inclusivity to accommodate the demographic diversity that growth will accompany. People-dependent growth raises the risk of diluting service levels, culture and the appetite for taking risks.
Heady growth can force a compromise on long-term value creation for short-term gains. Growth needs to become a means to a larger end. It cannot afford to become an end in itself.
(The author is vice-chairman of Nasdaq-listed IT services company Cognizant Technology Solutions)
