Kerala, which once witnessed large trade union protests against computerization and digitization, may now have to thank the technology and startup sectors, at a time when nearly all other economic activities are failing amid the coronavirus outbreak.
They’ve become a true life support for an economy in dire straits said G Vijayaraghavan, former chief executive of Technopark, Kerala’s first technology park, and currently president of a consultancy firm Venture Management Associates.
Going by Vijayaraghavan’s recollection, a small interaction between a Mexican woman and state’s then chief minister, began a chain of events that are now helping Kerala.
In 1990, on a visit to North America, former Kerala chief minister EK Nayanar, of the Communist Party, got a chance to meet a woman while touring Apple Inc.’s Silicon Valley factory. In true communist fashion, Nayanar asked the woman about her pay. Twelve dollars, she said. About ₹240 then. The CM doubted if it was too low. Vijayaraghavan, who accompanied Nayanar, told him it was not her monthly salary, but her hourly pay. Excited, Nayanar calculated her monthly salary and was aghast. “Oh, this is more than our chief secretary’s salary!” was his immediate reply, recalled Vijayaraghavan.
Soon after his return, Nayanar founded Technopark, a landmark IT-hub that showed in a stream of tech jobs to Kerala. After 30 years, Technopark, along with other similar hubs, are estimated to provide 1.5 lakh direct IT jobs, and many indirect ones, in the state. It is the IT sector that displayed recovery during the coronavirus outbreak, while other economic activities buckled under the pressure of the pandemic.
Kerala’s usual economic pillars— from enterprises to remittances to tourism— have been falling in distress amid the pandemic outbreak. Many traditional shopping complexes have become ghostlands over prolonged lockdowns. Tens of thousands of hotels and other tourism hubs, otherwise buzzing with foreign tourists enjoying the state’s spectacular monsoon rains now, remain in a vicious cycle of job loss and debts, as air travels are shut.
However, for a clutch of IT companies and startups in Kerala, there is strong excitement in the air, owing to a boost in business. Like elsewhere, there is an increased demand for technology solutions rendered by the pandemic.
For instance, Jiffy.ai, a Kerala and Silicon Valley-based startup, raised ₹136.83 crores two months ago and was selected by Malaysian carrier Air Asia to implement their new, entirely contact-less, check-in process last week. In July, Alappuzha-based Techgentsia Software Technologies Pvt. Ltd. was shortlisted as one of the five startups by the central government in its bid to build a secure, homegrown video-conferencing app to rival global giants like Zoom.
In July, Keralite Ran Menon founded OrthoFX raised also raised ₹100 crores to invest to expand in Kochi. Kochi-based language learning startup Entri also raised around ₹127 crores for expansion in July. In March, Thiruvananthapuram-based Sascan, a diagnostics startup, also raised an undisclosed sum from Unicorn India Ventures’ equity fund at ₹92 crores.
“Startups and IT companies are not as badly as affected as traditional sectors but are not as bright as the picture is sometimes shown. At least 15-20000 out of 1.5 lakh may have lost jobs over the pandemic. But then, unlike other sectors, they did not lose completely. They received severance packages and other benefits. Some of them have taken this a positive note and started their ventures.IT will never replace traditional economic resources, like, say, remittances. It may grow a few hundred thousand more, say 3 lakh. But even then, it will be employing only 1% of Kerala’s total population (the contribution of overseas jobs is 10%),” said Vijayaraghavan.
