The other face of India's Silicon Valley
Weekly Pulse
June 2-8, 2006
Bangalore may have become Silicon Valley for the world media, but for ordinary citizens of this South Indian mega city, such a description means nothing. For the benefits of info-tech growth are shared by those few who own the companies and the thousands who work there. The growth is taking place amid a mass of poverty, and its greatest consequence seems to be rapidly growing social disparity.

Bangalore is home to nearly 1,200 info-tech firms which account for some 35 per cent of India’s software exports. These exports accounted for over $16 billion earnings last year. More than 200,000 people are employed directly by the info-tech firms: call centre executives, software developers, and research and development geeks.

However, for over 6 million local inhabitants, life remains much the same as it was some ten years ago, when the info-tech boom began in Bangalore, which is the capital of Karnataka. Most of those who work in these info-tech companies hail from other Indian cities and state—a fact not liked by the local residents.

Moreover, the city’s infrastructure, including the international air port and the road system, is so bad that it is hard to accept that a place like this could even deserve to be called a Silicon Valley.

Koramangala —a suburb of Bangalore which has the highest density of telecom software companies per square mile in the world—is the hub of the so-called Silicon Valley. Infosys and Wipro, two of the world’s biggest software companies owned by Indian tycoons, are based there.

Beyond Koramangala, however, you see nothing but a mass of humanity, commuting on potholed and dug-up roads and suffering acute water and power shortages. Roads are gridlocked with traffic when not drowning under water during rains, and air and noise pollution is on the rise. There are as many dogs in the city as there are people, but that may be due to Hinduism’s sanctity for the animal world.

The info-tech growth is part of India’s capitalist march, but the formerly socialist country seems to be still socialist in terms of the manner Bangalore bureaucracy functions or insofar as the provision of private services is concerned. There is hardly any car rental in the city—and no private taxi available.

The info-tech industry blames the politicians, primarily the state government for failing to provide the basic civic amenities. Narayana Murthy, the chairman of info-tech giant Infosys and Bangalore’s best known global citizen, has talked openly of shifting his businesses to other Indian cities, primarily Hyderabad, due to the pitiable state of city infrastructure.

Likewise, Wipro chief Azim Premji, one of the world’s richest men, has threatened to pull his company out of the city unless there was a drastic improvement in infrastructure over the next few years.

Bangalore Forum for IT (BFIT)—a grouping of the city’s info-tech companies which comprises 18 major multinational IT firms including Texas Instruments, Philips, Novell, Synopsis, Hewlett-Packard and Motorola—has raised similar concerns.

For their part, the politicians blame the info-tech bosses. Last week, Chief Minister Kumaraswamy warned about the dangers posed by the digital divide. “There are too many instances of hi-tech facilities being enjoyed by a small percentage of people while a vast majority living a few kilometers away is denied even the basic amenities,” he said.

Former Prime Minister Deve Gowda, who hails from Karnataka, had also recently sounded a similar note of protest by saying, “All we are saying is that info-tech should benefit the common man, the farmers and the poor. We have done so much for them, including giving them tax breaks.”

Leaving aside the great mismatch between the actual city ridden with poverty and its posh but secluded info-tech sector, the real question is whether Bangalore really qualifies as a Silicon Valley.

California’s Silicon Valley consists of around 2,000 electronics and information technology companies, along with numerous services and supplier firms. These companies are leaders in fields like computers, semiconductors, lasers, fiber optics, robotics, medical instrumentation, and consumer electronics.

On the other hand, Bangalore’s Silicon Valley is only a service industry. It’s not innovative. There are no patents involved. It is not generating new computer hardware. The hundreds of companies involved in the info-tech businesses are merely busy out-sourcing for big American or European info-tech houses.

The Indian companies do not develop any technologies or products. They provide development services. They have engineers who specialize in programming languages rather than in technologies. It’s cheap labour.

Wipro, Infosys, Tata Consultancy Services, DSQ Software, Kshema Technologies, Ivega Technologies, MindTree Consulting, and hundreds of other medium and small size IT companies only provide one service: end-to-end solutions.

Companies like Infosys, however, have started to further diversify their workforce, even recruiting non-Indian software engineers for its US offices, besides deciding to move to other Indian cities like Hyderabad. Moreover, the Western businesses such as Merrill Lynch and Deutsche Bank have started to hire the graduates of Indian Institute of technology, along with those from Princeton, MIT and Harvard on hefty salaries.

But, then again, compared to over 1 billion Indian population, only a handful of Indians are reaping the benefits of the growth of info-tech sector in India, which is also the world’s largest.

This growth and the benefits accruing from it are “embedded in the computer” or the narrow world around it. This is how Bhavani, whose husband works for the Philips, looks at while explaining as to why the reality of Bangalore does not match with the perceived growth of India’s info-tech sector.

In a country with the Gandhian legacy of patience and perseverance—where even the richest of all generally tends to live a very simple life—growing social disparity as a result of the mushrooming growth of the cheep IT service providers looks tragic.