Bangalore: India's IT hub readies for the digital future

By Shilpa Kannan
BBC News, Bangalore

Media caption,
In the world of technology, India is still regarded as a global leader as Indian firms are among the top IT service businesses. Shilpa Kannan reports.

The poster child of India's globalisation, Bangalore is where the country's IT industry began its dramatic success story.

Once known for its lush farmlands, it's now home to some of the best international and domestic technology companies which are creating millions of jobs for young Indian engineers from all across the country.

Like 24-year-old Zubair Aslam from Uttar Pradesh in northern India. He moved to Bangalore for a job as a software engineer. He says he is living his dream.

Image caption,
Zubair Aslam moved to Bangalore for his dream job

"I'm earning as much as my father - he has worked for 31 years as a government servant," he says.

"Whatever he is earning now - that was my starting salary. I started at that level. So it feels good."

It all began in the 70s when the state government had demarcated a large piece of land outside Bangalore for an electronic city.

But this was pre-liberalisation days; taxes were very high and everything was controlled through licensing.

Imports were restricted and there were significant limits on currency conversions.

A domestic technology start-up, Infosys was established in 1981 - the same year IBM introduced the personal computer.

One advantage it had was that Indian educational institutions were offering good courses in computer engineering and the country was creating computer professionals on a par with the rest of the world.

By 1983, both Infosys and another future tech giant, Wipro, moved to Bangalore and the country's fledgling IT industry started to grow around the two firms.

Cheap workforce

But the city's global foray only really began when Texas Instruments opened its facility in the city in 1984.

After the economic liberalisation in the 90s, India's software export industry has grown rapidly.

Companies here have a huge cost advantage - an English-speaking, highly-educated workforce that's available at less than a quarter of the wages paid in the US or Europe.

Bulk hiring became common practice and each of the companies employed millions of workers.

Image caption,
Kris Gopalakrishnan of Infosys says Indian companies are now producing world-class engineers.

Infosys has been at the forefront of that growth.

"Today if you take the top 10 IT services companies in the world, you'll find four or five Indian companies," says Kris Gopalakrishnan, co-founder of Infosys.

"That's what has given confidence to not just young people, but other industries also, to say that from India you can be a world class company, from India you complete with the best in the world and from India you can actually go out and conquer the world."

World famous

The industry now adds more than 200,000 jobs a year providing employment to nearly 10 million people.

The sector accounts for almost $85bn (£55bn; 65bn euro) worth of exports every year. Today nearly 40% of the country's IT industry is concentrated in Bangalore.

Image caption,
Bangalore is home to the country's IT hub with some of he best international and domestic technology companies.

With more than 500 companies offering back-office and outsourcing services, the industry here generates more than $17bn revenue a year.

But it no longer wants to be known as just an outsourcing hub, companies here are moving up the value chain to become global powerhouses.

Plenty of big ideas, talent, and technology infrastructure meant that global research and development too has moved here.

The German business software firm SAP set its their centre in Bangalore in the south of India in 1998 when it decided to extend its "labs" beyond Europe and the US.

Now the company says there is a bit of Bangalore in every SAP product all over the world. It's not alone; global multinationals such as Microsoft, IBM, Cisco, Oracle, Adobe and Intel all have centres here.

The talent spill-over from the city's IT industry is now making Bangalore a hub for entrepreneurial growth with many networking groups who regularly meet at coffee shops offering peer support and ideas.

They are turning from job seekers to job creators.

Like Amit Sharma who founded, a company that makes funky T-shirts. He came back from the US to start his company in Bangalore.

"The biggest advantage is that labour is so cheap," he says.

"As a start-up you can still hire somebody to do the running around and don't have to deal with the administrative complexity yourself.

"So the same amount of time and money can allow you to take a much larger risk in India compared to the Silicon Valley."

Image caption,
Many networking meetings happen in cafes where entrepreneurs can exchange ideas and offer peer support.

Jyoti Ramnath says when you start a company, it's important to have a network that can provide the support for setting up an office, legal advice or just finding the right staff.

Her company, specialises in personalised gifting.

"The concept of co-working in Bangalore has really taken off and I share my office with another start-up in a key location," she explains.

"That brings down my entire running costs."

So despite outsourcing bringing in the city's success in the global economy, for the next phase, innovation and entrepreneurship seems to hold the key for Bangalore's digital future.

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