With Indian companies looking to build a global footprint, it has become imperative to strategically choose investment locations abroad. The impending recession in the US has forced Indian companies to look for better avenues in the European and Asian markets.

Providing facilities similar to Indian SEZs, European countries have successfully built industry clusters and technology hubs to boost inward investments. One such industry cluster is the British Midlands in the UK which has turned out to be one of the largest IT, automotive, and aerospace hubs in Europe.

The British Midlands region offers a unique mix of ingredientsa progressive environment with a well educated, skilled and flexible workforcefor businesses to grow.

The region has a rich talent pool and professional labor around the areas of engineering, biotech, and IT. It also has a very closely integrated university and industry network. So, the opportunities to actually connect into networks around the IT world are great in the East and West Midlands. As it is a very close knit community, the companies that come in are able to easily slot themselves into the existing networks within their particular fields. Hence, they feel very integrated in terms of knowledge transfer as well as training the local community to generate talent, says Michael Carr, executive director, Business Services, East Midlands Development Agency.

Some premier Indian companies that have invested in the British Midlands include TCS, Brunton Shaw, Jaivel, ME Engineering, State Bank of India, ICICI Bank, Bank of Baroda, Kathiawad, Four Soft, Geodesic Information Systems, Trinity India, and Middlesex Broadcasting. In addition, there are numerous national and regional bodies that provide business help to Indian communities.

Michael Carr, executive director, Business Services, EMDA

Emerging IT Sector
Though IT is a priority sector in the UK, there have not been many large Indian IT companies investing in the region. The reason for this, Carr explains, is that the British Midlands has always been supportive of companies that want to set up their base in the region, but it does not tend to support outsourcing activities.

Most Indian IT companies have been entering the region with a focus on some key aspects. They are looking at either acquiring a company to get access to markets and distribution channels in the region. In doing so, they try to gain access to the back office software development which can be done cheaply in India but can still be sold to established markets.

Many companies are acquiring in the pure software domain as well as in applied software areas such as transport and logistics.

Companies such as Wipro and TCS have been doing significant work in software services and outsourced services domain. Tapping the niche industry segments, companies such as FourSoft and Geodesic have made major acquisitions and investments in the region. FourSoft recently acquired a company in the UK, called the DCS group that is into transport and logistics. The region has been actively encouraging software companies, engineering companies, and biotechnology companies. In terms of specific IT opportunities in the UK and especially in the Midlands, the spoke software for technology control and development, process systems and system integration is very important to companies, specializing in sectors such as rail, logistics, systems, manufacturing, to collaborate with larger global industries, says Carr.

Investment Support
Last year saw a 110% rise in the number of investment projects to the UK from India. Currently, over 500 Indian companies have a base in the UK. Companies in India have been enjoying the benefits of SEZs and STPI tax holiday that expired recently. When asked whether there are similar schemes in the UK, Carr said, We formally dont have any SEZs in the UK. But the European and UK governments have agreed that certain areas within the British Midlands will have the advantage of grant aid being made available to the companies.

Priya Kekre
priyak@cybermedia.co.in

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