A country that remained very poor and isolated from the international economy until the 1990s, suddenly became a global center for leading edge, information technology industries.
On a memorable day in 1985, my Ambassador car got stuck behind a heavily laden bullock-cart outside the office on Miller Road. The cart was negotiating a steep incline at the gate leading to the office complex, Sona Towers. Around me traffic piled up, car horns blared. The commotion prompted security staff to come to the aid of the cart-driver. That done, traffic eased, and life returned to normal.
But it was no normal day. While passers-by saw a cart incongruously parked beside high-end cars outside a posh hi-rise, people from adjoining offices were fixated on the “kilari” bullock and cargo being unloaded.
Among the spectators was the genial long grey-haired, distinguished Satyanarayan Gangaram ‘Sam’ Pitroda. At that time, he was technology advisor to Prime Minister Rajeev Gandhi, overseeing a plan to take affordable telephony to the deepest corners of India. He was often been seen at C-DOT (Center for Development of Telematics), located one floor above my office.
In time, when everyone around became aware of the contents of the wooden boxes, shaking his head, smiling, he said, “This can happen only in India.”
The consignment addressed to Texas Instruments’ Bangalore office, was to enable the Dallas head-quartered semi-conductor giant’s two-way satellite link between India and the US for data transmission and software development.
Some 12 years earlier, I’d often see a young Vinay Deshpande, presently chairman and CEO of Ncore Technology, an independent electronics design and development house, well-known for embedded system design, embedded software, and digital signal processing software, working long hours in the basement of the Classic Building on Richmond Road, where Processors Systems India was located. One evening when I went down to see him, he held a soldering iron in hand, and was hovering over a “circuit board.” Smiling, and looking up, he explained that he was putting together hi-tech firmware, bound for the US.
Deshpande was typical of the 1970s techies — engineers, silently, independently working or in tandem with Council of Scientific and Industrial Research, Defence Research & Development Organisation and the Indian Institute of Science on various aspects of computing if not putting together computing machines.
“Bangalore was a tech city well before the arrival of the MNCs (multi national corporations) or the ITES (Information Technology Enabled Services) outsourcing shops. I think of Bangalore as the original Beantown — a comparison with Boston, which is known as Beantown to the New Englanders,” recalls Dr Vijay Chandru, founder and chairman, Strand Life Sciences, and a former professor of computer science at the Indian Institute of Science.
In those early days of IT, the environment for business was far from conducive. India’s economy was largely state controlled. At the behest of the country’s first prime minister, Jawaharlal Nehru, socialism was firmly implanted, even into the early 1980s. The license raj system was a damper to investments in the private sector. Foreign direct investments were particularly suspect. The Indian Telegraph Act of 1885 regulated all activity relating to telegraphy, phones, radio, telex and fax. The double whammy made life difficult for the fledgling IT industry.
The impact of these policies, even after the first non-Congress government at the center in the 1970s, forced the Indian operations of IBM to a halt as the company refused to dilute its equity. It was years before a new government and a more liberalized economic policy made it possible for Big Blue to return.
Around the same period, another big name in the Indian IT field today, Accenture, was an arm of the accounting giant Arthur Andersen. That left local start-ups, such as Wipro and Infosys in Bangalore to struggle with frosty antiquated government policies for their innovative IT business.
All that dramatically changed after Rajeev Gandhi became prime minister and launched a slew of industry friendly policies. IT companies benefited immensely from these measures. Incentives, such as free computers, free bandwidth and contracts for hi-tech projects, got the new kids on the block off to a flying start.
Against this background, Texas Instrument’s 64 kbps dish antenna was like a whale surfacing. It got everyone’s attention.
“It turbocharged the IT revolution,” says C. S. Murali of the Indian Institute of Science, “and TI became the first major IT multinational in Bangalore.”
However, decades before TI opened up outsourcing, Bangalore was already well-known and respected in the electronic, computing world.
Ironically, it was the same ardent advocate of “democratic socialism, mixed economy,” Nehru, who said, “The future belongs to science and those who make friends with science.” Thanks to that vision, Bangalore was endowed with several prestigious centers of excellence in science, and technology.
“The city was destined to be a major hub for sophisticated electronic research and development — avionics, defence, telecommunication, weather forecasting, and such high end activities mostly in the public sector,” says Vijay Chandru. “Right from the 1960s, a host of engineers were engaged in creating hardware and software solutions.”
Following the example of Texas Instruments, a series of multinationals, Indian companies, and techies from near and far, made a bee-line to Bangalore.
Says Murali, “The attraction of Bangalore as an investment destination was due to several factors — deregulated and liberalized global economy, friendly state government policies, abundant availability of technologically skilled work force conversant with English, such as those from the IISc, local engineering colleges and industries. Then there were the public sector giants — Bharat Electronics, C-DOT (Centre for Development of Telematics), ISRO (Indian Space Research Orgabnisation), C-DAC (Centre for Development of Advanced Computing), and defense research centers that were at cutting edge electronics, technology. They played a catalytic role for the start-ups. Above all was the city’s inviting salubrious climate and cosmopolitan character.”
In this propitious environment, hardware-software production and other IT-related services grew rapidly, and Bangalore became among the largest IT research and development hub outside the United States.
“A country that remained very poor and isolated from the international economy until the early 1990s had suddenly become a global center for leading edge, information technology industries,” notes AnnaLee Saxenian in her paper, The Bangalore Boom: From Brain Drain to Brain Circulation?
Today Bangalore churns out solutions for a broad spectrum of commercial, academic and government requirements — telecommunications, accounting and banking software, engineering and design data management, avionics, database, automotive, networking and network consulting to call centers, semiconductors, mobile handsets and software, internet applications, Business Process Outsourcing, customer interaction, and remote education.
“The IT industry in Bangalore has matured and moved up the value chain. Today there are a large number of companies developing original software products both for the domestic and global markets from their Bangalore centers,” says Ravi Gururaj, NASSCOM Product Council Chairman & Executive Council Member. “This emergence of world class product based companies is very promising and is indicative of the next huge growth wave in India’s IT sector. Bangalore with large pools of talented and sophisticated technologists is well positioned to help lead the country’s expected five fold growth in software product related revenues from the current $2 billion to $10 billion by 2020.”
The IT-BPO sector presently is one of the largest employers in the country. In 2012 it employed nearly 2.8 million professionals and added over 230,000 jobs. Indirect jobs and benefits are several times these figures.
“Interestingly, 25-35 per cent of the total workforce in this section are women,” says Sucharita Eashwar, WEConnect International, an organization that professes to connect women’s enterprises with market opportunity.
“This includes those in non-techie functions such as administration and support, finance, and marketing. Women workers average 25 per cent in high tech companies, while in the BPO industry they average 45 per cent of the total workforce.”
Infosys Executive Chairman, N R Narayana Murthy believes that the IT sector plays a key role in tackling the country’s unemployment problem.
“India’s software exports touched Rs 135,000 crores with the state of Karnataka itself generating more than Rs 55,000 crores,” he said. “The state generates the highest net value addition among all industries in India.” NASSCOM projects that the IT-BPO revenue will grow at 16.3 per cent, thanks to “new business models, organization efficiencies, services around disruptive technologies such as cloud, mobility, analytics, social media, and flexible product portfolios and verticalized solutions.”
The average software professional, apart from those in BPO, earns Rs 50,000 per month ($1,000), more than eight times the state per capita monthly income of Rs 6,000 ($120).
Information and biotechnology fuels Bangalore’s GDP. The city’s per capita income is the highest of any Indian city.
The meteoric rise of Bangalore as a hi-tech city are striking around the city’s outskirts. Green, beautifully landscaped campuses featuring plush structures dominate the areas of Hebbal and Nagawara, ITPL/Whitefield, Bellandur, Challaghatta, Marathahalli, Outer and Inner Ring roads, CV Raman Nagar and Electronic City.
Much of this real estate has come up in what was once arid agricultural land or barren, swampy terrain. Alongside these campuse a plethora of swanky new residential complexes, hospitals, international schools, sports arenas, malls, multiplex cinemas, restaurants, and one-stop centers for family shopping, recreation and entertainment have mushroomed.
In addition, the IT-BT boom has spurred major infra-structure developments, such as the Bangalore International Airport, Namma Metro project, elevated roadways, etc.
The transformation of Bangalore and its environs has radically altered the lives of its residents, old residents in particular.
As Bangalore’s economy booms, the once quiet Pensioner’s Paradise with graceful Victorian bungalows and a garrison town leafy ambience with chirping birds is becoming increasingly transformed into an eclectic mix of the traditional and the chic new. The cityscape, and people’s social and life-styles surprise visitors with its bold, international look, to the chagrin of many old timers.
The city presently has fewer trees, gardens, lakes and open spaces. Many farmers in the outlying areas have abandoned their time-honored occupations and sold their holdings. The land has been converted into residential and office space, roads and other urban development projects. The population of 10 million, as well as a floating population of high and low-wage workers, has resulted in unprecedented pressures on housing, water, power, waste-disposal, roads and other infra-structure. Incidents of crime are on the rise. With more people, there are shortages and escalating costs of housing, transportation, food and general living. Bangalore is today the third most expensive city in India.
On the other hand youngsters, who constitute a majority of the population, many of whom are well-paid techies, find Bangalore a fun and exciting place, loaded with fantastic opportunities.
As one nattily clad, confident Thanisandra-based young techie in the Biere Club on Lavelle Road, said to me, “Seriously uncle, the city has arrived!” I raised a mug of chilled lager, and the mind did some quick back-flips. To techies with soldering irons bent over circuit boards. To a bullock cart that ferried hi-tech cargo. And to all the talent and initiatives that continues to drive brand Bangalore all over the world.
Top Ten IT Companies in Bangalore
1 Tata Consultancy Services Ltd
2 Infosys Technologies Ltd
3 Wipro Technologies (Wipro Ltd)
4 HCL Technologies Ltd
5 Tech Mahindra Ltd
6 MphasiS Ltd
7 Patni Computer Systems Ltd
8 Aricent Technologies (Holdings) Ltd
9 CSC India Private Limited
10 L&T Infotech
Source: NASSCOM, Annual survey on the outlook for FY10-11.
The ranking is based on revenues generated in IT services, engineering services, software products and offshore product development. It does not include some companies whose corporate headquarters are located outside India, but have significant India revenues. Had they been included, companies such as Accenture, Cognizant, HP India, Syntel, Oracle Financial Services and IBM would also have appeared in this ranking.
Transformation of Rural Bangalore
• The IT and consequent real-estate boom, has profoundly impacted the lives of long time residents and their life-styles. Luxury cars, palatial houses, gold and jewelry, opulent weddings, club memberships, eating out, ostentatious spending and living mark the new rich.
• New schools and colleges, hospitals, roads and other infrastructure have improved life in many surrounding villages of the IT corridors.
• Young rural people are increasingly adapting the life-style of their urban counterparts. Pavadas or half-sarees, and such traditional attire have given way to trendy salwar-kameez and the ubiquitous jeans. Attendants at petrol bunks or sales personnel in malls, food outlets don smart uniforms. Off-office hours they jump into jeans or tank-tops and tight leggings.
• Young women from traditional families who were engaged in farm work and household chores are looking beyond rural opportunities. They attend schools and colleges. Many work part-time or full-time in malls to supplement family earnings or to support their studies.
Typical of this new generation is an Immadihalli village woman I spoke to at the ice-cream kiosk in Ascandas Park Square Mall in Whitefield. Anusaya earns Rs. 6,000 (about $100) monthly. “I work here in the day, go to evening college. The money I earn meets some of my family expenses and funds college fees.”
Another young woman from Malur, Ramya Gowda, who works at a doughnut counter, said, “I got this job because I learnt English and have finished school. This is a part time job. I’d like to study more, especially computers, and work in a big company like Yahoo!”
Speaking American in a Neutral Accent
“Over the years, multinational firms based in Europe and the United States have developed a homogenized business culture rooted in western practice. Daily interaction between Bangaloreans and people in offices in cities around the world like London, Mumbai, Tokyo and New York is dominated by Anglo-American culture. As a result many Indian employees are expected by their employers to act and talk more like Westerners. Many receive training from their employers who hire consultants from the US, Canada or England to provide courses in English or American accents, culture, the latest sports, cinema or news events. Employees practice American or English (neutral) colloquialisms and are taught to make references to the weather or the latest episodes of English or American television sitcoms or movies.”
— Extract from Globalization Sparks Cultural Change in Bangalore
The Future of IT in Bangalore
• The Karnataka government has recently approved a 10,500 acres Information Technology Investment Region, ITIR, close to the Bangalore International Airport.
• Recently the phase II of the Software Paradigm’s Infotech Pvt Ltd spread over 85,000sq. ft., was launched in Hebbal.
• Of the 10 million people in Bangalore nearly a third work in the information and biotechnology industries. Nearly 0.8 million work directly in these sectors while some 2.5 million are indirectly employed.
• Karnataka’s Minister for IT & BT, S.R. Patil has proposed that IT operations should expand to Tier II cities, such as Mangalore, Hubli, Dharwar, Tumkur and Belgaum, increasing direct employment in these sectors to 2 million.
• Currently exports of software stand at about Rs 130,000 crores ($26 billion). With this proposed expansion, revenues are projected to jump to Rs 400,000 crores ($80 billion) by 2020.