Gujarat was always a business hub

The entrepreneurial temper of Gujarat has been tapped, trapped, pampered and popularised over the past decade as never before.

As we look back, the most striking aspect of the decade is the popular perception of 'emergence of Gujarat' as a sound state to do business. One cannot dispute the fact that in most urban houses across the country, drawing room and even kitchen conversations are peppered with talk of 'how easy it is to do business in Gujarat!' It must be stressed that this 'popular perception' that has only emerged in the last decade because for those involved in the business of business, know that Gujarat and its prosperous people were always entrepreneurs, but marketing and positioning their achievements wasn't their forte. That mantle was donned at an opportune moment by a resurgent Narendra Modi government in 2003.

High on the landslide victory of 2002, Modi decided to take an unusual plunge in 2003 by hosting a B2B (business to business) conclave in Gujarat, with some modifications. Such meets, though extremely vital for businesses, were invariably hosted by industry federations and at best, supported by the state and central governments.

But in Gujarat, a 'Modi'fied version of this age-old concept was adopted. And thus was born Gujarat government's biennial Vibrant Gujarat Business Summit 2003. The rest is history.

The Vibrant Gujarat Global Investors Summit is easily one of the biggest brands that has emerged from Gujarat in the last decade. What initially started as a platform for companies from different parts of the country to meet in Gujarat, swiftly metamorphosed into a showcase international event, with participation from different countries, resulting in very distinct political benefits to Modi which were reflected in consecutive election results. At the last count, 80 countries are slated to participate in VGGIS 2011.

"To begin with, it was a domestic event but now it is global. We have increased the reach and horizon substantially. Earlier it was only investment centric, now our CM wants Gujarat to become a global destination. This time, knowledge sharing wil be the key," minister of state for industries, Saurabh Patel says.

At the event's core is the signing of Memorandums of Understanding (MoU) between Gujarat government and private companies, which will be promises to invest a certain amount to build a business facility in the state and the state government's pledge to facilitate the venture by providing land and other infrastructure like road, power, water etc. In 2003, it started on a low key, with reluctant participation from India Inc, uncomfortable with the allegations of 2002 communal riots against Modi.

These uncomfortable memories faded away for key business honchos by 2005 as hype started to build up about 'big opportunities' here. By 2007, the who's who of India Inc descended on Gujarat to grab a pie of what the state had to offer. And by 2009, the hype almost choked other states, Karnataka for one, into starting their own version of such a summit.

"VG summits are a very successful 'destination branding' exercise.
This is usually talked about in the context of tourism, but Gujarat has successfully positioned itself in totality," says Prof Abraham Koshy, faculty at the Indian Institute of Management, Ahmedabad, and an eminent branding expert who has co-authored Marketing Management - A South Asian Perspective with global marketing guru Philip Kotler. "Everything about Gujarat is branding. The important thing is these initiatives are not discarded after one attempt, it is sustained. The state is teaching the rest of the country how to utilise the power of branding," he adds.

Statistics of cumulative investments worth Rs 19.66 lakh crore have been released by the state government over the past seven years. Intense debate rages amongst economic analysts and observers over the implementation of these MoUs - with government promising 69% in advanced stages of implementation while independent agencies and sceptics pegging it at 25%.

"VGGIS sends a message to the international community that something dynamic is happening here and there is official recognition of it. It gives coherence to Gujarat; unpleasant footnotes are diminishing. However, Gujaratis have always been doing well in business. Not one can change it," says sociologist Shiv Viswanathan.

As VGGIS gears up for the fifth high-profile edition next month, DNA looks back at the defining points that changed greater perceptions and larger initiatives of the government which facilitated investments in the state.