Global Capability Centers: The Shift to Tier 2 Cities for Talent, Cost Savings and Innovation

Global Capability Centers (GCCs) in India are shifting from metropolitan cities to Tier 2 cities due to rising operational costs, talent saturation, and increasing competition for skilled professionals. Tier 2 cities offer cost advantages, lower attrition rates, and a growing talent pool, making them attractive for GCC expansion. To leverage this shift, GCCs must focus on talent availability, skill development, and industry-academia collaboration. However, relocation to Tier 2 cities also poses risks, including skill gaps and infrastructure constraints. GCCs can adopt strategies such as strengthening industry-academia collaboration, upskilling and reskilling programmes, government and private sector partnerships, and focusing on soft skills and global competency to fully leverage the shift and ensure a sustainable workforce.

The landscape of Global Capability Centers (GCCs) in India is undergoing a significant transformation, with a growing trend of shifting from metropolitan cities to Tier 2 cities. This strategic move is driven by several factors, including rising operational costs, talent saturation, and increasing competition for skilled professionals. Tier 2 cities offer cost advantages, lower attrition rates, and a growing talent pool, making them an attractive option for GCC expansion [1].

The partnership between SAP and Gati Shakti Vishwavidyalaya (GSV) exemplifies the importance of industry-academia collaboration in addressing the skill gaps and infrastructure constraints that GCCs face when relocating to Tier 2 cities. This Memorandum of Understanding (MoU) aims to digitally skill professionals and integrate cutting-edge logistics solutions into the education framework. By leveraging SAP’s global expertise and GSV’s specialized focus on transport and logistics, the initiative seeks to transform skill development in the sector [1].

To fully leverage the shift to Tier 2 cities, GCCs must focus on several key areas. First, talent availability is crucial. Companies must ensure that there is a sufficient pool of skilled professionals in the new locations. Second, skill development and reskilling programs are essential to bridge the gap between academic training and employer needs. Third, fostering industry-academia collaboration can enhance research and development in digital logistics and transport, strengthening national logistics efficiency [1].

However, relocation to Tier 2 cities also poses risks. Skill gaps and infrastructure constraints can hinder the effectiveness of GCC operations. To mitigate these risks, GCCs can adopt various strategies. Strengthening industry-academia collaboration, upskilling and reskilling programs, and government and private sector partnerships can help address skill gaps and infrastructure constraints. Additionally, focusing on soft skills and global competency can ensure a sustainable workforce [1].

The success of Actelis Networks in securing a major order from a leading tier 2 telecommunications carrier in the United Kingdom demonstrates the potential for similar success in the Indian market. Actelis' hybrid-fiber technology provides a compelling value proposition by enabling carriers to deliver high-performance connectivity over existing infrastructure without significant capital expenditure and time delays associated with new fiber deployments [2].

In conclusion, the shift of GCCs to Tier 2 cities presents both opportunities and challenges. By focusing on talent availability, skill development, and industry-academia collaboration, GCCs can leverage the advantages of Tier 2 cities while mitigating risks. The example of SAP and GSV’s partnership underscores the importance of strategic collaborations in ensuring a future-ready workforce capable of supporting India’s rapidly evolving logistics ecosystem.

References:
[1] https://currentaffairs.adda247.com/sap-and-gati-shakti-vishwavidyalaya-partner-to-skill-indias-logistics-and-transport-workforce/
[2] https://www.stocktitan.net/news/ASNS/actelis-networks-expands-its-uk-presence-with-a-major-tier-2-carrier-jffnho1f1zdp.html