Tough Go­ing

Ban­ga­lore is known as the Silicon Valley of In­dia but is it re­ally up to speed?

Southasia - - Technology - By Haseeb Ah­san Haseeb Ah­san con­trib­utes to var­i­ous pub­li­ca­tions on en­trepreneur­ship and skill de­vel­op­ment.

Ban­ga­lore, home to six mil­lion peo­ple, is cur­rently the third most pop­u­lous city in In­dia, and it con­tin­ues to grow. Ban­ga­lore cur­rently hosts more than 10,000 in­dus­trial units, of which a ma­jor­ity con­sti­tutes the In­for­ma­tion and Tech­nol­ogy (IT) sec­tor. With much to boast of, the grow­ing me­trop­o­lis has earned a rep­u­ta­tion as the Silicon Valley of In­dia.

This new hub of tech­nol­ogy how­ever, did not erupt overnight. Its foun­da­tions were laid in the mid-70s when the Karnataka State Elec­tron­ics De­vel­op­ment Cor­po­ra­tion en­vi­sioned Ban­ga­lore as the na­tion’s elec­tronic city. Later in the early 90s, with an IT boom, mostly in the ser­vices sec­tor, Ban­ga­lore be­came the most fea­si­ble vicin­ity to do busi­ness. Play­ing host to a plethora of multi­na­tion­als and har­bor­ing a vi­brant de­mo­graphic com­po­si­tion, the city has trans­formed into a cul­tural and eco­nomic hub in In­dia.

Al­though, the in­dus­try has not yet pro­duced ground­break­ing plat­forms such as Face­book, Twit­ter or Google, it does pro­vide the best and most pro­duc­tive IT ser­vices like call cen­ters, cus­tomer sup­port and off­shore soft­ware de­vel­op­ment to ma­jor com­pa­nies world­wide. A pi­o­neer in out­sourc­ing, Ban­ga­lore’s IT in­dus­try guarantees bil­lions of dol­lars in rev­enue ev­ery year. This is the leading rea­son why many In­di­ans, as many as 85% ac­cord­ing to some statis­tics, work­ing in the U.S are re­turn­ing home to find jobs or start their own ven­tures.

Iron­i­cally, dur­ing the global re­ces­sion, the In­dian IT in­dus­try ben­e­fit­ted im­mensely. Third world coun­tries are fa­mous for pro­vid­ing good re­sources at low rates. As a re­sult, nu­mer­ous de­vel­oped coun­tries per­formed cost­cut­ting tech­niques and out­sourced their op­er­a­tions to a num­ber of third world coun­tries. With In­dia serv­ing as a ma­jor share­holder in the re­gion, it of course reaped the most prof­its.

The magic be­hind the phe­nom­e­nal growth of the In­dian IT mar­ket is their Re­search & De­vel­op­ment (R&D). Al­though the gov­ern­ment hardly of­fers any sub­stan­tial sup­port, multi­na­tional com­pa­nies like Mi­crosoft, Ya­hoo and IBM have in­vested ex­or­bi­tant amounts in de­vel­op­ing this sec­tor. Mi­crosoft has set up its Re­search Cen­ter in In­dia, which is the only such fa­cil­ity in any de­vel­op­ing coun­try. Sim­i­larly, other IT gi­ants like Google, In­tel and HP have also made huge in­vest­ments. A core rea­son why In­dia is able to at­tract di­verse in­vest­ment from the tech­ni­cal and ser­vice in­dus­try is due to the flex­i­ble busi­ness poli­cies of­fered by its gov­ern­ment. The ap­proach to­wards in­vest­ment has al­ways re­mained pos­i­tive and wel­com­ing. In­vest­ment from the global ser­vices in­dus­try boosts em­ploy­ment at home and the In­dian gov­ern­ment con­tin­ues to push cor­po­ra­tions to form a sys­tem so that their own peo­ple can get more jobs or be­come en­trepreneurs.

Al­though the In­dian Silicon Valley shows rapid growth, crit­ics ar­gue that it can never be­come the Santa Clara Silicon Valley. The cen­tral ar­gu­ment is that all ma­jor com­pa­nies in Silicon Valley were formed on the ba­sis of in­no­va­tion. All suc­cess­ful prod­ucts were unique in their own time, from Win­dows to the Google search en­gine and from Orkut to Face­book. This el­e­ment is un­for­tu­nately miss­ing from the In­dian IT world where mar­kets are trapped in a never-end­ing cy­cle of cater­ing to non-in­no­va­tive and la­bo­ri­ous ser­vices like call cen­ters, cus­tomer sup­port or Busi­ness Process Out­sourc­ing. Crit­ics ar­gue that In­dia will not be able to climb up the lad­der in in­no­va­tion and cre­ative de­vel­op­ment and even­tu­ally the in­dus­try will stag­nate un­til an­other coun­try, per­haps China, is able to of­fer ser­vices at an even lower cost.

De­spite crit­i­cism, In­dia’s IT in­dus­try ben­e­fits from a com­pet­i­tive edge by of­fer­ing re­sources at lower rates than any­where in the world. This edge is so strong that it has com­pelled the world’s top IT gi­ants to in­vest in In­dia, which has re­sulted in more job cre­ation and more sup­port to en­trepreneurs.

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