Adversitement
Growth of Global Capability Centres (GCCs) in India's Tier-2 Cities Driven by Smaller Multinationals
Published On : 2024-03-04T12:29:07+0530 [ IST ] |
Author : Mayur_Tembhare
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The emergence of Global Capability Centres (GCCs) in India's tier-2 cities is experiencing a notable uptick, largely driven by the establishment of smaller GCCs by emerging multinationals and the expansion endeavors of existing companies. According to data and insights from ANSR, an end-to-end GCC solutions provider, this trend is reshaping the landscape of India's outsourcing industry.
Currently, India boasts approximately 1,600 GCCs, with around 150 of them strategically located in tier-2 cities such as Ahmedabad, Mysuru, Vadodara, Nashik, Tirunelveli, Bhubaneswar, and Coimbatore. These cities have emerged as burgeoning hubs for GCC operations, offering a conducive environment for business growth.
The demand for GCCs in tier-2 cities is projected to witness a significant surge in the near term, with estimates indicating a potential increase of 30-40%. Vikram Ahuja, Co-founder of ANSR and CEO of Talent500, attributes this anticipated growth to several factors driving companies' interest in tier-2 locations.
Ahuja highlights that companies, particularly those setting up operations in India for the first time, are increasingly adopting a tier-2 strategy, drawn by the prospect of establishing a modest-sized presence without the need for expansive setups. Organizations targeting a workforce of approximately 400-500 employees are gravitating towards smaller cities, attracted by factors like talent availability, lower costs, and government incentives.
Government initiatives aimed at incentivizing companies to establish bases in tier-2 cities have played a pivotal role in fostering this growth trajectory. Additionally, the retention of a significant talent pool in smaller cities post-Covid has provided companies with a valuable resource to tap into.
Tier-2 cities offer a host of advantages, including a lower cost of living (10-35% lower than tier-1 locations), reduced setup and talent costs, and substantial cost savings in real estate rentals (up to 50% compared to mature hubs). These factors contribute to the attractiveness of tier-2 cities for GCC operations, enabling companies to optimize resources while maintaining operational efficiency.
Shivananda R Koteshwar, Vice President of Synopsys Inc, emphasizes the significance of tapping into differentiated talent pools in tier-2 cities to drive innovation and excellence. Synopsys Inc recently established a center in Bhubaneswar, leveraging the region's pool of chip design engineers and Electronic Design Automation experts for high-tech roles.
Moreover, the trend of multinationals present in tier-1 cities diversifying their presence by expanding into tier-2 locations further underscores the growing prominence of these cities in India's outsourcing landscape. As companies contemplate their phase two growth strategies, setting up in smaller cities offers opportunities to harness talent at lower costs, signaling a paradigm shift in the GCC ecosystem towards decentralization and inclusive growth.
Source : Government of India
Tags : smaller multinationals , cost benefits , Global Capability Centres , tier-2 cities , GCC , talent pool ,
Summary : The proliferation of Global Capability Centres (GCCs) in India's tier-2 cities is witnessing a surge, fueled by smaller multinationals and existing companies' expansion efforts. With factors like talent availability, lower costs, and government incentives, tier-2 cities are becoming attractive destinations for setting up GCCs, leading to a predicted 30-40% increase in demand. This trend signifies a shift towards leveraging talent and cost benefits outside major urban centers.
Adversitement