North Carolina Wins Second Infosys Innovation Hub…Who is Next?
August 28, 2017
In May 2017, India-based IT consulting firm Infosys announced plans to hire 10,000 workers across four new innovation and technology hubs in the U.S. The first hub was announced for Indianapolis in May and, in July, it was announced that the second hub would go to Wake County, North Carolina. To get the full story behind Infosys’ decision to bring 2,000 jobs to North Carolina’s Research Triangle region, we talked to Ravi Kumar, President and Deputy Chief Operating Officer at Infosys, North Carolina Senator Jay Chaudhuri and Chris Chung, CEO of the Economic Development Partnership of North Carolina (EDPNC).
Andy Levine (DCI): In May 2017, the India-based IT consulting firm Infosys announced plans to hire 10,000 workers across four new innovation and technology hubs in the United States. The first hub was announced in Indianapolis in late May, and the second hub was announced in July.
Patience Fairbrother (DCI): Texas, Ohio, Connecticut, Maryland, Utah, Georgia, and Virginia were all in the running for the second facility, but the 2,000 jobs ultimately went to Wake County, North Carolina.
Andy: So welcome to episode 26 of The Project: Inside Corporate Location Decisions. I’m Andy Levine of Development Counsellors International.
Patience: And I’m Patience Fairbrother also with DCI and Andy’s co-host of The Project.
Andy: Today we bring you the story of Infosys, an Indian company valued at $34 billion and with nearly 200,000 employees.
Patience: To get the company’s perspective, we talked to Ravi Kumar, who is President and Deputy Chief Operations Officer at Infosys. Ravi has quite a diverse background, including his roles as a nuclear scientist.
Andy: I feel fairly certain this is the first and last time we’re gonna interview a nuclear scientist.
Patience: I would agree with that. So he’s been with Infosys for 15 years but has also worked with PricewaterhouseCoopers, Oracle and Cambridge Technology Partners. So he’s not exactly an underachiever, Andy.
Ravi Kumar (Infosys): Infosys is a global leader in technology services and consulting, and we drive transformation of client landscapes by leveraging and powered by technology. So that’s our job. So we work with large companies, large corporations who’re going through this journey of transformation, and we deliver value to them by partnering with them.
Andy: Infosys is in the process of a 10,000-job expansion across four sites in the U.S., which will serve as innovation and technology hubs for the company. The first site for this expansion was announced in Indiana in May, followed by North Carolina in July. There are two other sites that have yet to be announced.
Patience: Because these centers involve the creation of thousands of high-skilled jobs, talent was obviously a major consideration for Infosys. That was their number one consideration. Here’s Ravi on the company’s three-pronged strategy for talent acquisition.
Ravi: So our endeavor is to create net new talent in the market for these new skills. And we have three feeders for it. The three feeders are hiring experienced talent, hiring talent from adjacent capabilities, adjacent capabilities which potentially could be refactored and repurposed, and finally hiring from schools in the U.S., schools, and colleges in the U.S.
Patience: So Infosys was looking not only for experienced talent, but also for talent with similar capabilities that they could train easily, and a network of schools to hire from.
Ravi: So one of our criteria of setting up a center was to look for talent pools in and around the centers we establish. So the academic ecosystem, which is our third feeder, it was a very important concentration set for establishing the centers.
Andy: The Research Triangle Region is known as one of the smartest areas of the country, and this was palpable when Ravi first set foot in the area for a site visit.
Ravi: North Carolina Research Triangle Park and Wake County, you know, they’re all synonymous to innovation. The first time when I actually went there, I was overwhelmed by the academic ecosystem in and around the place, very good universities, a great community college ecosystem. In fact, a percentage of what we hire will also be from community colleges. We are very excited about how this could be an inclusive and a diverse strategy for talent acquisition.
Patience: Number two on the list of top considerations for Infosys was the presence of existing and potential clients.
Ravi: And the second important criteria was, of course, client clusters. Client clusters would create the foundational capacity needed in the centers. The centers would evolve into specialization areas, and hopefully, they could actually scale to a national level for specific capabilities and specific competencies.
Andy: This may be the first time we’ve heard a company list client clusters in their top three location considerations.
Patience: And North Carolina fit the bill. Between financial services, pharmaceuticals, industrial manufacturing and life sciences, Infosys has a fairly big cluster of existing clients in Wake County. On top of that, there are more than 500 startups operating in the region, which Ravi mentioned as a major bonus for the kind of ecosystem they’re looking to create.
Andy: So onto the third and final consideration for Infosys. This was the support of the government and local economic development organizations.
Ravi: Third and most important was the government. And our interactions with the government was outstanding. They were on the ball on all the information we needed. They very religiously followed up with everything we asked for. They were very prompt to step it up the local economic development partnership. And the North Carolina Chamber of Commerce substantiated our visit with meetings with local corporate captains, who gave us a feel about why North Carolina is such an important place.
Patience: We also heard from Ravi that Governor Cooper and Secretary of Commerce Tony Copeland were personally involved throughout the selection process.
Andy: This brings us to our next guest. The Infosys project first came on North Carolina’s radar in January 2017 through an unusual source, a freshman state senator named Jay Chaudhuri. He was appointed last April as the senator of North Carolina 16th District and helped the state win the Infosys project through a personal relationship with the Vice President of Government Affairs at Infosys, Anurag Varma. Here’s Senator Chaudhuri.
Senator Chaudhuri (North Carolina 16th District): It really started with a relationship that I had with their newly-appointed Vice President of Global Government Affairs, who was a friend of mine. Someone who I also knew had been active. Kind of his prior background was working on deepening ties between the United States and India. And from that conversation, he made me aware of the fact that the company was looking to establish innovation centers around the country.
Patience: Senator Chaudhuri was introduced to Anurag Varma almost 20 years ago by a mutual friend.
Senator Chaudhuri: Anurag is someone who is an attorney, so obviously I am an attorney also, we share that in common. He has a great interest in U.S.-India relations, which I do as well. And he’s also been very civically and politically engaged. I was introduced to him by a mutual friend almost 20 years ago, so really just he had started off and, you know, continues to be a personal relationship that I had with him. And it was just by coincidence that he had started working at the company about, I think he was four months in this new job when we had the conversation.
Andy: So Anurag reached out to Jay, giving North Carolina a leg up for the project. After a few conversations, the Senator passed it onto Chris Chung, CEO of the Economic Development Partnership of North Carolina, our third and final guest. Chris connected directly with the company via phone to hone in on what exactly they were looking for.
Chris Chung (Economic Development Partnership of North Carolina): It became very quickly apparent that from Infosys’s perspective, they are so much about the talent. Where is the available talent? That’s where we were focusing most of our pitch in those conversations. So understanding what Infosys was looking for, understanding what markets would make sense for them here in North Carolina.
Patience: The conversation then turned to the possibility of a site visit by Infosys decision-makers for some high-level discussions. Ravi and the VP of Government Relations were set for the visit in late March, and Governor Cooper had plans to meet with them, but it took three tries to get all the right people in the room for the meeting. This is the first major roadblock in this project.
Chris: They were scheduled to come in, I think on March 31st. It was the last day of March or something like that, and unfortunately, Ravi had something come up very last minute the night before, so he had to cancel his plans to make the trip into the Raleigh-Durham market. And so it was just the VP of Government Relations. But that’s okay, we still had everybody set up to have their conversations.
Patience: Despite this bump in the road, the very first visit went well enough to warrant a second trip at the beginning of May, this time with Ravi in attendance.
Chris: So consider the March visit more of a dress rehearsal, where we got to spend some time with the Government Relations VP, and then when Ravi came back five or six weeks after that, we were that much more crisp with the value proposition that we were putting in front of him as the key decision-maker. And, of course, at that time, we were also able to leverage the involvement of the Governor and the Secretary of Commerce to explain how they would do everything they could to support the successful launch of this project here in North Carolina.
Andy: The feedback after visit number two was very positive. Chris and his team felt that they had hit all the right points and done what they needed to do to convince Infosys that the Raleigh-Durham area was the right place for their expansion.
Patience: But this is where we hit roadblock number two. The Infosys project was fiercely competitive. At this point, Chris and his team became aware that other states had strong relationships with Infosys. One state, in particular, was making a very aggressive plan.
Chris: It turns out, though, that elsewhere within the company, there were some relationships that some of Ravi’s peers and even some of the C-suite people within the company had with other state officials in other parts of the country. And one of those states made a very…continued to make a very aggressive push in part by leaning on these personal relationships between their governor and some of Ravi’s peers within Infosys. And that allowed this other state to really, I won’t say get in through the back door, but certainly make a very strong parallel push to get this second IT hub in their state versus here in North Carolina.
Andy: And that led to a third visit with both Ravi Kumar as well as the executive who was being heavily lobbied by North Carolina’s top competitor.
Chris: I think he insisted on getting more involved in this decision-making process because he’d been lobbied by this personal relationship, who happens to be a governor of another state. And so he wanted to now get into the process and make sure that all this great feedback he was hearing from Ravi and his team was in fact true. In other words, he wanted to come do the sniff test himself to make sure that this was a good market. Otherwise, I think he might have been somewhat predisposed to going in this other direction by virtue of the strength of that relationship. And so that ended up being the third visit by the company.
Patience: Ultimately, this third visit in June 2017 sealed the deal for North Carolina. That and North Carolina State Senator Jay Chaudhuri, who was working behind the scenes to make the project happen.
Chris: Going back to how this first got brought to our attention, you had this state senator, who was a member…who’s an Indian-American, very plugged into the Indian business community here in the Triangle. He, of course, had some good relationships within Infosys as well, and he was doing everything he could behind the scenes to get key pieces of intel from his sources to keep pushing for North Carolina. Again, if anything, this project, like so many, illustrates that to be successful recruiting this kind of great opportunity, it’s a team effort that involves a lot of different actors each contributing his or her own value to the process. Our organization is just one of that cast of characters who’s trying to get this towards the outcome that we want.
Andy: Before we wrap up this story, we wanted to hear from Senator Chaudhuri again about his unique role in the project. We asked him what advice he would give other elected officials about encouraging economic development in their communities.
Senator Chaudhuri: One thing that has been absolutely fascinating to me is to be able to leverage, you know, relationship that I had with someone to focus on economic development, which I think, you know, a lot of folks don’t really view that as being the role of a legislator. And so, you know, my advice I think is two-fold to other elected officials, particularly those that serve in the legislature. I mean, I think number one is truly understand the assets that you have in your region and be prepared to talk about the assets that you have in the region.
My second advice to other legislators and public elected officials is to really look at the relationships, personal relationships you have. If this project really illustrates anything, I think we all have relationships with the business, small businesses, big businesses, and those can ultimately result in economic development projects and jobs back in the district.
Patience: Infosys will receive up to $22.4 million for a job development grant over 12 years. This incentive is tied to the creation of 1,600 new jobs in North Carolina. The company expects to hire the first 500 North Carolina workers within two years as part of an overall strategy leading to the eventual creation of 10,000 U.S. jobs across four sites.
Andy: So Patience, we are up to the takeaways portion of this episode, I’ll let you start out here, what stood out to you in our conversations with Chris, Jay, and Ravi?
Patience: What was interesting to me is the role that relationships played in this decision and the fact that so many different key players were involved, kind of making this project happen behind the scenes. We heard from Ravi that Governor Cooper, you know, the Commerce Secretary, Tony Copeland, as well as Jay Chaudhuri, who we spoke with, were all involved in the decision throughout the process. And the fact that, you know, Senator Chaudhuri’s personal relationship that allowed North Carolina to hear about the project in the first place is kind of interesting just knowing that that gave them a leg up from the beginning, and perhaps helped them close the deal in the end.
Andy: Yeah, I know. I thought we really enjoyed our conversation with Senator Chaudhuri, but what was interesting is he made the introduction, but then he stayed involved almost sort of like a back channel to hear what was coming back from the company, what was being said. And I think he really was critical to winning the project overall.
Different little take on this. And this is more from Ravi Kumar’s comments. He used a term which I’d not heard before, which is the term “net new talent.” To me, it was very interesting. Usually, when we talk to a lot of companies they’re basically saying, “I wanna go where the talent already is developed, that I can hire and bring in.” I think they are looking at a point here, they have to hire 10,000 people and they’re doing that in four different places. It’s very hard to walk into any community and find 2,500 people that have an IT background and that they can easily hire. So Ravi and his team, it sounds like they were really focusing on what the educational system look like here. What is the talent that is gonna be coming up that we can train and bring in early on? So it’s just, to me that net new talent was a really interesting perspective.
Patience: So that is a wrap on episode 26 of The Project: Inside Corporate Location Decisions.
Andy: Our very special thanks to Ravi Kumar, Senator Jay Chaudhuri and Chris Chung for taking the time to share their stories with us. We really enjoyed the conversations with each other.
Patience: The Project is sponsored by DCI. We are the leader in marketing places and have served over 450 cities, states, regions and countries. You can learn more about us at aboutdci.com.
Andy: If you know of a location decision that might be a good episode for The Project, please give Patience or I a call or drop us an email. We hope you’ll keep listening. There are many more projects to come.