Science and tech for human progress: Kerala CM Pinarayi Vijayan on state's AI and startup vision

Kerala has always been an outlier in India’s development story, consistently topping human development indices while maintaining a unique social fabric. Now, under Chief Minister Pinarayi Vijayan's leadership, the state is making bold moves to position itself as India's hub for responsible artificial intelligence development and sustainable entrepreneurship.

The Chief Minister met YourStory on the sidelines of the Invest Kerala Global Summit and elaborated on the state's vision. Kerala recently organised the International GenAI Conclave, attracting global attention to its AI aspirations. But what sets Kerala's approach apart is its emphasis on ethical AI deployment and inclusive growth—a philosophy that extends to its broader startup ecosystem. In 2022-23 alone, the state enabled the creation of over 1.39 lakh MSMEs, generating more than 3 lakh jobs. This was followed by an additional 1.94 lakh MSMEs, adding another 4 lakh jobs to the economy.

What's particularly interesting is Kerala's unique approach to geographic expansion. Rather than concentrating development in major cities, the state is actively promoting a distributed growth model. Companies like Zoho have already embraced this vision, setting up remote workspaces in smaller towns like Kottarakkara. This aligns with Kerala's unique character as “an extended city that stretches all through the State,” as the Chief Minister puts it.

In this exclusive interview with YourStory, conducted through an in-person meeting and written responses, Chief Minister Vijayan details his government's approach to AI development, startup ecosystem building, and leveraging the state's significant overseas human capital. He also outlines the various initiatives and policy interventions that have helped establish Kerala as an investment-friendly destination for technology and innovation.

Here are the questions and answers:

YourStory [YS]: How has the environment for entrepreneurship improved under the current government?

Pinarayi Vijayan [PV]: The Year of Enterprises is a campaign launched to boost entrepreneurship and MSME [Micro, Small and Medium Enterprises] growth. In 2022-23, the first year, over 1.39 lakh MSMEs were established, generating more than 3 lakh jobs. Since then, an additional 1.94 lakh MSMEs have been created, adding more than 4 lakh jobs to Kerala's economy. Recognised as the best initiative by the Government of India, it has also been acknowledged as an innovation in public administration by the American Society for Public Administration.

Key supporting policies include Mission 1000, the MSME Insurance Scheme, 4% interest subvention, and the Kerala Brand initiative to strengthen MSMEs. For bigger investments, Kerala offers a comprehensive suite of 18 investment incentives, including 100% SGST [State Goods and Services Tax] reimbursement, investment subsidies, employment incentives, and R&D funding up to Rs 1 crore. Additionally, large-scale projects receive tailored support through a high-power committee led by the Chief Secretary.

YS: What is the government doing to prepare the state for the incoming artificial intelligence onslaught? How will Kerala's approach to AI be different from others?

PV: Our policy is that science and technology should be used for human progress and societal transformation. Our approach to AI is also in tune with that understanding. It focuses on responsible AI, ethical deployment, and industry-academia collaboration to drive innovation and inclusive growth.

Kerala has a robust IT infrastructure, with major IT parks fostering AI-driven startups and enterprises. Kerala is actively investing in AI training programmes, ensuring a skilled workforce ready to meet the demands of AI-driven industries.

We organised the International GenAI Conclave [in July 2024], positioning Kerala as a hub for AI innovation and discussions. IBM expanded its software development operations in Kerala, reinforcing the state's strength in AI and the IT sector.

YS: Currently a lot of startup activity is happening in the bigger cities of Kerala, are there plans to take them to smaller towns and Tier II cities?

PV: Kerala has been actively promoting startup activity beyond major cities, fostering industrial development in Tier II and Tier III cities. Our 'Work Near Home' initiative has encouraged businesses to establish operations in smaller towns. As you may already know, Kerala is more like an extended city that stretches all through the State. Therefore, unlike other states, Kerala follows an integrated development model without a strict urban-rural divide.

The fact that companies like Zoho have embraced remote workspaces, including in Kottarakkara, underlines that our's is a practical model. Perinthalmanna has also become a hub for emerging startups. Notable Kerala-based startups include Genrobotics, which develops robotic solutions for sanitation, and Open Financial Technologies, India's leading neo-banking platform for SMEs.

YS: A large reason for Kerala's success is also its human capital, which has moved overseas, especially the Gulf. Are there plans to capitalise on this enormously successful group of Malayalis?

PV: We have constituted the Loka Kerala Sabha, which has been instrumental in strengthening our ties with the global Malayali diaspora. The Pravasi community has significantly contributed to Kerala's industrial and infrastructural development. Reverse migration is increasing due to Kerala's high HDI [Human Development Index], strong service sector, and improved job opportunities. We are focused on creating high-value jobs that match the skills and aspirations of returning NRKs [Non-Resident Keralites].

YS: What would you say is the biggest achievement of your governments since taking over power from the opposition, especially when it comes to the economy?

PV: Inclusive development has been a key priority, ensuring growth across all sectors of society. Significant improvements in public health and public education have enhanced the quality of life and human capital. Revitalisation of industries in the secondary sector has driven economic growth and employment. Strategic policy interventions and infrastructure development have strengthened Kerala's position as an investment-friendly state. These would be our biggest achievements, in a nutshell.