CHENNAI: Tamil Nadu is hoping to draw from Taiwan's experience in growing key Information Technology areas, particularly the hardware sector, and also learn from Taiwan's successful ventures in bridging the digital divide.

The first step in the relationship is the opening of an Overseas Development Centre of the Institute for Information Industry (III) of Taiwan in Chennai, for which some locations in the IT corridor area and elsewhere have been inspected.

Explaining the decision to open the centre in Chennai, Dr. G.J. Huang, executive vice-president of III told the media on the sidelines of the CII IT conference `Connect 2005' on Thursday that Taiwan, which was experiencing a shortage of good human resources to become an "e-society," wanted to tap the skills available in this region in the area of software, including embedded systems. The III (referred to as Triple I) provides inputs on science and technology, market intelligence and international opportunities to the information industry in Taiwan.

Low costs

Tamil Nadu IT Secretary Dr. C. Chandramouli said the State Government was optimistic that the presence of III in the metro would serve as the foundation to develop a hardware manufacturing base. Industries had found that the cost of manufacturing in Chennai was 12 per cent less than anywhere else, including China, even prior to the revaluation of the yuan.

Tamil Nadu was also addressing the question of the digital divide and it would look at Taiwan's example, where the III was coming up with solutions to help those without access to appropriate levels of Information and Communication Technologies.

Responding to a delegate's suggestion that Taiwan could lose its advantage in hardware if new players such as India took up manufacturing, Dr. Huang said that of the current $70 billion worth of products, only $12 billion came from domestic manufacture — "Made by Taiwan" rather than "Made in Taiwan" was the prevailing philosophy.

Several speakers stressed the importance of developing physical infrastructure to match the goal of achieving significant capacities in hardware manufacture. Tamil Nadu should note that clustering of smaller suppliers around a handful of major manufacturers was the planning model of choice when setting up hardware facilities.

Acknowledging the strain imposed by vigorous growth of the IT sector on physical infrastructure in cities, S. Mahalingam, Chief Financial Officer, Tata Consultancy Services cited the example of Bangalore, which "grew and grew" to reach a point where it could not grow any longer in the same way. It had demonstrated the effects of unplanned growth where the right infrastructure was not available. Chennai had some advantages that could help it take over the "iconic status" of Bangalore.

Cities were indeed getting choked as a result of IT-led growth, said B. Ramaraju, Managing Director, Satyam Computers Services. Industry was able to perceive the intent among Governments to set things right, but the speed of action had to be looked into.

India could become an exporter of hardware rather than continue as a net importer through careful nurturing of the industry, said Gopal Srinivasan, Director, TVS Electronics. He likened the present lower cost advantages enjoyed by the country to Malaysia's position in the past vis-à-vis Singapore. Tamil Nadu should keep in step with national taxation policies to promote IT.

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