Remaining growth: TN's push for Global Capability Centres

In the race for global attention, are we remembering to listen to our own streets?

Maybe, maybe not!

Recently, the Tamil Nadu State Planning Commission released a visionary policy document titled 'Reimagining Tamil Nadu'. As citizens, we must welcome this with cautious optimism. The report lays out a bold ambition: to transform Tamil Nadu into a leading hub for Global Capability Centres (GCCs), aiming to establish over 500 such centres across cities like Chennai, Coimbatore, Hosur, and Madurai. This vision aligns the State with the global shift towards knowledge-driven economies. But in a state already grappling with infrastructural inequities, urban saturation, and uneven access to opportunity, it raises an urgent question: Can this model be both scalable and inclusive?

What began as back-end IT support hubs two decades ago in Bengaluru and Hyderabad has now evolved into innovation powerhouses, influencing strategy, product design, and even artificial intelligence deployment at a global scale. Tamil Nadu already houses over 150 GCCs, primarily concentrated in Chennai, and employs more than 1.2 lakh professionals in fields like automotive tech, healthcare analytics, fintech, and enterprise software. The State’s new goal, to grow this number to 500+ GCCs by 2030, signals a tectonic shift in its economic imagination.

At one level, the potential rewards are undeniable. NASSCOM projects India’s GCC sector to reach $60 billion in exports by 2025, contributing significantly to GDP and Forex. Tamil Nadu, with its stable governance, excellent higher education institutions, and industrial legacy, is well-placed to claim a bigger share of this pie.

Moreover, high-value job creation, especially in AI, data science and cloud computing, can prevent the “brain drain” to Bengaluru or foreign shores that has long plagued Tamil Nadu’s talent pool. Already, institutions like IIT-Madras are feeding into this tech talent ecosystem, and strategic tie-ups with GCCs could revamp curricula across engineering and management institutions statewide.

But this optimism must be tempered with realism. Tamil Nadu’s gross enrolment ratio in higher education (52%) may be high, but only a fraction of graduates emerge job-ready for the deep-tech demands of GCCs. Bridging this gap requires more than certification courses. It will need systemic academic reforms, faculty retraining, and real industry-academia integration. Unlike Karnataka, where the government-backed 'Yuva Yuga' initiative focuses on deep-tech upskilling for the digital economy, Tamil Nadu’s approach is still evolving. Will local youth from tier-2 towns like Karur or Thanjavur gain access to these opportunities, or will GCCs become elite islands within cities?

The report’s vision of '15-minute cities' and integrated live-work-play zones is inspiring and necessary. Yet one must ask: Can Chennai or Coimbatore withstand another 200+ high-tech office parks without collapsing under pressure? The urban infrastructure, plagued by poor stormwater drainage, traffic congestion and solid waste mismanagement, needs urgent upgrading. Already, Chennai’s real estate prices in IT corridors like OMR have surged by 12–15% in the last 18 months, affecting housing affordability. Water stress is another concern: the average per capita water availability in Chennai (around 100 lpcd) is below the recommended level for urban centres. Unless urban resilience is built into the GCC roadmap, the growth may prove exclusionary.

The GCC model is land-intensive and energy-hungry. With Tamil Nadu targeting net zero by 2070, this presents both a challenge and an opportunity. While the Vision Document calls for 'Green Capability Zones', it's silent on how energy efficiency, water neutrality or carbon budgeting will be enforced across upcoming SEZs. A cautionary lesson can be drawn from Hyderabad’s HITEC City, where tech expansion outpaced urban planning, leading to unregulated growth, environmental degradation and urban sprawl. We must avoid repeating these patterns by mandating green building codes, incentivising solar adoption, and building digital public infrastructure with sustainability at its core.

Infrastructural growth is tangible, but social inclusion often isn’t. Will marginalised communities displaced for tech parks get resettled with dignity? Will urban informal workers like domestic help, security staff, and street vendors find space in the '15-minute city'? The Vision Document, for all its clarity on FDI and floor space index (FSI) optimisation, says little about social safeguards or participatory planning. Kerala’s model of 'Knowledge Cities' in places like Kochi, where IT parks co-exist with artisan clusters and eco-tourism hubs, offers a more people-centric alternative. Could Tamil Nadu imagine its GCCs as civic ecosystems?

Finally, we must ask a deeper philosophical question: are GCCs genuine sites of innovation or sophisticated compliance centres? Many operate under rigid SOPs set by global HQs, limiting local autonomy. If Tamil Nadu wants to build “capability,” it must invest in start-up incubation, R&D funding, and policy autonomy for GCCs to experiment, fail, and innovate. Establishing links with the state’s knowledge hubs — like the Centre for Artificial Intelligence at Anna University or rural innovation cells at Gandhigram can help embed local relevance into global workflows.

Tamil Nadu’s GCC vision is bold and well-timed. It promises jobs, foreign investment, and urban renewal. But growth without reflection can deepen existing divides. The real challenge is not how many centres we build, but how inclusive, sustainable, and locally meaningful they are. If done right, GCCs could transform Tamil Nadu not into just an outsourcing giant but into a globally respected hub of ethical, inclusive, and future-ready innovation. The road ahead must be paved not only with broadband and broadband towers but also with critical thought, civic responsibility, and environmental conscience.

Thakur is Professor and Dean at Vinayaka Mission’s School of Economics and Public Policy, Chennai