The farmers’ children in dusty Darbaripur no longer want to work the land. For them, software engineering is the new occupation of choice.
It’s not surprising. Their paddy fields have given rise to India’s latest technology hub – tall glass buildings dot the skyline, the hundreds of offices inside brightly light up Gurgaon. It’s 7am in the morning. Buffaloes graze nearby, and farmers settle down to their traditional clay hookahs. There’s very little left of their ancestral village.
Karan Singh is a 47-year-old farmer whose life – like the other farmers in his village – used to depend on erratic monsoons. Then property prices soared. He sold his farmland and became an overnight millionaire.
“There are no farms left here for us to remain farmers,” he says. “Our hope is that our future generation will also be employed as software engineers in the offices that have sprung up here. Given good education and the right facilities, our children are also capable of achieving anything.”
The dream is not as far-fetched as it seems. Located just outside India’s national capital, Delhi, the high-rise homes and offices in India’s so-called “Millenium City” are the product of two decades of the country’s rapid economic growth. Hundreds of software companies and call centres have set up shop here. The private sector is championing the India dream – it accounts for 87% of the total investments worth $72 billion USD (4.5 lakh crore rupees) that were attracted by the state (as of June 2012), according to the Associated Chambers of Commerce and Industry of India.
Gurgaon is becoming one of India's most important cities. Its proximity to Delhi means that companies have access to political decision makers. The diversity of companies here – ranging from every major telecom player to automobile manufacturer to banking company means that the talent pool is diverse and with valuable experience. Many experts in India feel that Silicon Valley succeeded because of the kind of crossroads it provided for technical, creative minds with the right financial and marketing input. Gurgaon seems to be at a similar cusp now.
Unlike Bangalore or Mumbai, real estate is not a problem here; the city was started by developers so there is an abundance of high-quality office and residential spaces. So, in the 1990s, when multinational companies looked for office space to house thousands of employees in call centres in India, Gurgaon became an obvious choice. Other suburbs such as Faridabad were also well-placed, but a single decision changed Gurgaon’s fortunes overnight.
Indian real estate company DLF persuaded Jack Welch – then the chief executive of General Electric (GE) – to set up a facility here, and in 1997 it became the first US company to outsource software work to India. That prompted others to come to Gurgaon, says Pankaj Kulshreshtha who leads the analytics and research practice at Genpact.
Genpact’s story best illustrates Gurgaon’s success. The company began as a call centre within General Electric, but it was hived off in 2005 as a separate entity, and began to service other clients outside of GE. Today it employs nearly 60,000 people, and has centres across the world.
Gurgaon too has grown; it’s now the biggest hub of outsourcing companies in the world. Thanks to the success of its industry, half-a-million new jobs have been created in the area. India now has over 50% market share in the world’s IT outsourcing industry, and most of that work happens from Gurgaon. The total global and domestic outsourcing market opportunity for India is expected to grow three-fold from $500bn in 2008 to $1.5tn by 2020, according to India Brand Equity, a foundation set up by the government.
The vibrant industry here has created a pool of skilled engineers, mid-level and senior managers who are pushing the outsourcing industry in new ways. Genpact has diversified, adding specialist verticals in the healthcare and financial sectors, research and development and a pharmaceutical division. In 2011, the company acquired Headstrong, an IT services firm, to add to its range of services. Headstrong had valued clients such as Goldman Sachs and Morgan Stanley, and expertise in consulting for sectors such as asset management, derivatives, wealth management and mortgages.
Increasingly the lines are blurring between outsourcing and IT services for most companies. While existing outsourcing business is doing well, the company’s focus now is on “big data analytics,” says Genpact’s Kulshreshtha. “Large amounts of customer data need to be mined so that companies can make sense of it all. The answer lies in not just analysing data but actually using the derived insights to deliver a process that can bring in profits.”
From cars to Mars
Gurgaon seems especially well-placed to lead big data analytics in the country. Kulshreshtha says there’s a global lack of talent trained in both quantitative disciplines like economics, mathematics, and statistics but who are also sufficiently trained in software and computing.
“Here, we have universities that supply us with millions of such candidates, and we have people with management talent to add to it,” he says.
His company has positioned itself as a firm that wants to solve client problems using a process lab. Technology alone can’t solve problems, but if you use technology in combination with talent who can analyse it, you can offer more complete solutions and rework processes to profit from it,” Kulshreshtha says.
It’s a good model to replicate, says Sangeeta Gupta, senior vice-president of industry body the National Association of Software and Services Companies (Nasscom). “Companies are able to profit more. You are able to hire domain experts and offer clients much more than customer services.”
These companies include Siemens Industry Software. With design centres around India, they make software used for everything from designing car parts to building vehicles sent into space.
In a Gurgaon business park, a room of engineers train on computer-aided design, fashioning a tool to be used in an automobile. Behind them are huge posters of the Curiosity Rover on Mars. Nasa’s Jet Propulsion Laboratory used a portfolio of design software made by Siemens to digitally design, simulate and assemble the vehicle before any physical prototypes were built.
There’s a little bit of India in every single one of those products, says Suman Bose, Managing Director of Siemens Industry Software. While the company has extensive R&D labs across the country, the decision-making happens in Gurgaon.
From being a hub of low-end call centres, the city is now emerging as headquarters to most Indian and international companies in the world. Some of the major international companies located here include Coca-Cola, Pepsi, IBM, American Express, Agilent, Microsoft, and Bank of America.
“You can attract better management talent in Gurgaon,” says Bose. “You can give them a desirable kind of living atmosphere, at not-so exorbitant prices. With the overall lifestyle Gurgaon is becoming one of the most attractive destinations for middle-to-senior management talent in the country.”
But Gurgaon is not without its problems. Look outside the world-class offices and luxury homes, and little works – not the sanitation, the power supply, or even the public transport. Every company is like a self-contained island. They have backups for everything – water, electricity and food. With no reliable public transport available, Genpact provides cabs to take over 10,000 employees back home.
It’s a fully-fledged operation, with control rooms to monitor traffic, GPS tracking and security guards to ensure safety. The company says it has to take on the responsibilities of the government.
A lot of investment is needed as a result. “I would say that all this would add on 10 to 15% to the cost,” says Vidya Srinivasan, who heads infrastructure and logistics at Genpact. “For example in China, we don’t need to be worried about power backup or transport – it’s just taken care of. Or even in Philippines, which is closer to India, I don’t provide transport.”
About three million professionals are directly employed by companies to serve these needs. India's information technology and business process outsourcing sector contributes 8% to the national output.
“Despite the lack of municipal facilities, companies are still pouring into Gurgaon because you don’t have too many cities in the world that offers talent in an entire gamut of services in a single place,” says Nasscom’s Gupta. “The industry is getting together because they recognise that if they want to grow, they have to find answers to collaborate and improve the city.”
Companies here also actively address themes like commuting, women’s safety, best practices of hiring talent and managing attrition. Pramod Bhasin, the former head of Genpact, says that companies have begun to give something back to society and that it’s working. The city is unplanned, he says, but the government hasn’t stood in the way either. “They let us succeed. The energy in Gurgaon is palpable,” Bhasin says. “As in Silicon Valley, these things tend to work on themselves and regenerate. Gurgaon is the future of India.”
If you would like to comment on this story, or anything else on Future, head over to our Facebook page or message us on Twitter.