It was a tradition more or less unbroken until the early 90s. That the aggressive north and west would set the tone for India's economic destiny, and the south-in its quiet, unobtrusive way-would plod behind steadily. Then, it and biotech happened. South's strong pool of knowledge workers quickly made it the favoured destination for hi-tech companies. Today, Bangalore, Chennai and Hyderabad alone account for around half of India's Rs 36,500-crore software exports in 2001-02, and most of the biotech start-ups are located in either Bangalore or Hyderabad. It now appears that south's newfound lead may actually widen.

The reasons for that are rather obvious. Western India, to whose enterprising spirit the country owes much of its modern industry, is fast acquiring a reputation for being socially unstable. The region's sturdy entrepreneurship per se may not have been affected by the recent events in Gujarat. Nevertheless the unprecedented carnage (partition is probably the only other time when India witnessed such sustained killings) is forcing investors to look outside their own region for safer bets. After all, nobody wants to be stuck in a state that is in constant turmoil, or shows signs of slipping into one.

What could damage sentiment in western India even more is the perception that what happened in Gujarat could easily spread to Maharashtra. The propensity for unrest was proved once when bloody riots in the wake of Babri Masjid demolition in December, 1992, paralysed the city of Mumbai and created deep communal fault lines. At a time when running businesses profitably is a big challenge even where there are no social disruptions, the incentive for corporates to migrate to south's relatively safe climes is higher.

A question that businesses are likely to ask in their process of evaluation is this: What is it that west offers and south doesn't? The answer: Very little. Cities like Chennai and Hyderabad have been investing a lot on their roads; real estate is cheap in southern metros compared to Mumbai; telecommunications may actually be better in south; international access (in terms of ports and airports) is as good as anywhere else in the country; and there are plenty of engineering colleges in south for an employer to choose from.

Sure, Harvard business guru Michael Porter would have us believe that clusters are vital to building competitiveness. Therefore, if you are a financial services company, or are into textiles or pharmaceuticals, west may yet be a better destination. Agreed. But the point is how much money is going into manufacturing anyway? As far as anybody can see, it is information technology-based businesses that are driving, and will continue to drive, the new economy. it-enabled services such as call centres, BPO (business process outsourcing), bioinformatics, research and development, and services-related businesses will all be the new areas of focus.

Given south's abundant supply of English-speaking, cheap but skilled manpower, it is not surprising that more and more of ''knowledge-based'' industries should come up there. Already companies like General Electric and Cisco have set up R&D centres in Bangalore to do some cutting-edge work. Ford Motor not only has an automotive plant near Chennai, but also an information technology centre that serves as its hub for the whole of Asia-Pacific.

Part of south's charm is due to the fact that its politics, except in Tamil Nadu, does not demand of industry more attention than it deserves. While Andhra Pradesh's Chandra Babu Naidu has established his reputation as a ''CEO'', Karnataka's S.M. Krishna has gone the whole hog on pushing it and biotechnology in his state. Except for an occasional Digvijay Singh (of Madhya Pradesh), when was the last time you heard a chief minister north of Vindhyas actually woo investors or spell out his vision for the state? In these hard times, that's a question more and more investors are asking before pulling out their cheque books.