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Volume 48, Number 6November/December 1997

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India's Silicon City

Written by Yasmin Mahmood
Photographed by David H. Wells

Paul Senna, representative of a US construction company, was scouting for contracts and logged onto the Internet to "talk" with Shahab Ahmed, CEO of Cal-Info, a multimedia production firm in Bangalore, India. Ravi Kolipara, a builder of prefabricated homes in Canada, was looking for an Indian business partner, and also reached Ahmed on the Internet. So did Jairaj Eacharath, an IBM employee in Japan who is considering investing in real estate in India.

The same day, Ahmed e-mailed the names of some "possibles" to Senna and a few others to Kolipara. To Eacharath he sent descriptions of apartments offered by a Bangalore real estate developer whose website, as it happened, Ahmed had designed. Later Ahmed received a note from a software entrepreneur in Australia, and by day's end he had bought and downloaded the software for an Internet-based catalog sales system that met the specifications of a US-based client.

"See what the Net can do!" Ahmed said enthusiastically. "This is how business can be truly international." After 12 years as a project leader with Unisys in the United States, he returned to Bangalore in 1995 to set up his own software firm.

Ahmed is one of tens of thousands of high-tech entrepreneurs, engineers and employees who have flocked to Bangalore, capital of the southern Indian state of Karnataka and, now, the country's cyber-capital as well. Historically, Bangalore has been called "The Garden City" because of its expansive parks and serene lakes, laid out by the 18th-century Mysore ruler Hyder Ali. The British knew it fondly as "Pensioners Paradise," thanks in no small part to its green amenities, and retired there in droves.

But in the last decade, Bangalore has grown into the nerve center of India's burgeoning high-tech sector, which sold $840 million worth of software in the 1994-95 fiscal year and exported 60 percent of that, becoming one of the largest software exporters in the world. It is also, according to Time magazine, the fastest-growing city in Asia: Its present population of five million is 10 times what it was in the 1970's.

An Indian software trade association estimates that sales will reach $5 billion by the year 2000. With more than 330 software houses in the city, employing more than 10,000 professionals, Bangalore leads the nation's industry, and has earned a global economic niche large enough to make its name as synonymous with high-tech as Seattle or Silicon Valley. In the press and on the street, Bangalore is called "The Silicon Valley of India," or just "Silicon City."

Bangalore's gardens were a gift of the city's location. It sits high, cool and dry on a plateau, well above the heat of the subcontinent's lowlands. This comfortable climate was well-suited not only to recreation, but also to administration and the pursuit of higher education. It is also, it turns out, no less suited to industries that often require temperature controls and dust-free environments.

According to S. S. Peeran, a real-estate developer and administrative recruiter for the state of Karnataka, "it was the establishment of premier research institutes that set a scientific temper" for Bangalore, and laid the foundations for its leadership in India's electronic economy.

Jawaharlal Nehru, independent India's first prime minister, determined to make Bangalore the intellectual capital of the country, a city-sized think-tank where the ideas and programs that would fuel India's development would be conceived. The Indian Institute of Science, or IIS, still one of the leading research centers in the country, was founded in Bangalore by industrialist J.N. Tata to promote excellence in scientific research. It was soon followed by the Raman Research Institute, (RRI), named after physicist C.V. Raman, who won the Nobel Prize in 1930.

The IIS and RRI paved the way for the Indian Institute of Astrophysics, the Indian Space Research Organization, the National Aeronautical Laboratory, the National Dairy Research Institute and the Indian Institute of Management. The national government invested heavily in scientific and technological infrastructure for more than 40 years, and today the state of Karnataka boasts 30 research and development institutes, 50 engineering colleges, 188 industrial training institutes, 19 medical schools and five computer training centers, many of which are in Bangalore. For industry, the result is easy access to a constant supply of top-grade, high-tech talent.

Government-run heavy industries, called public sector undertakings or psu's, were established during those same decades. They were the first to benefit from Bangalore's research resources. Now, Hindustan Aeronautics, Hindustan Machine Tools, India Telephone Industry and others are all headquartered in the city. The academic institutions, the research and development institutes and the psu's share a symbiotic relationship.

Before the 1992 economic reforms that opened India's economy to international investment and partnerships, only Texas Instruments and a few other multinational firms ran high-tech operations in Bangalore. But in a mere five years, the new national emphasis on export-led growth and full multinational participation has converged with the high-tech boom to make Bangalore a full-fledged "technopolis." Today, any transnational company with interests in India must consider building its headquarters in Bangalore, and many have: Intel Asia, 3M, Compaq, IBM, Microsoft, Philips, Verifone, Motorola, Digital and SmithKline Beecham Pharmaceuticals are all among Bangalore's growing list of major multinational players.

Those companies' Bangalore operations are not limited to the assembly of electronic components or repetitive data entry: In most cases they include creative software design, sometimes in daily video conference collaboration with colleagues in the United States. The fact that the software designers in Bangalore are well off by Indian standards but earn about a fifth of what their American counterparts do is one of the reasons that, in 1995, Time magazine chose Bangalore as one of five world cities that US business leaders need to watch to understand the forces reshaping the global economy and redefining business relations between the United States and the rest of the world.

Bangalore's symbiosis of industry, research and training has created a snowball effect, says Riaz Tareen, director of Karnataka State Electronics Development Corporation Limited (KEONICS), especially in electronics and telecommunications. It was KEONICS, which matches entrepreneurs with industries, that masterminded Electronic City on the outskirts of Bangalore, one of the first of now nearly a dozen self-contained industrial parks.

Completed in 1989, the 135-hectare (332-acre) Electronic City houses more than 100 enterprises at the boomtown's economic frontier. These industries, Tareen says, "range from engineering and electronics to software and hardware. We have seen a convergence here from different parts of the world—USA, UK, France, Germany, Japan and Singapore as well as reputed Indian firms."

Hot on Electronic City's heels is Singapore Technology Park, a $480-million mega-project backed by the Tata Group, a leading Indian industrial house, a consortium of Singapore-based companies and the Karnataka Industrial Developmental Board. An international airport for Bangalore is in the works, too: The present one now serves more than 10 times the number of passengers for which it was designed.

It is this overcrowded airport that is often a visitor's first clue to the boomtown's growing pains: Once-abundant supplies of power and water now falter regularly, and industries often set up their own utilities. The air has grown smoggy not because of industry—there are few smokestacks in Bangalore—but because of the numbers of commuters who clog roads built for a city one-tenth the size of Bangalore today. The price of land, once cheap, is rising fast. "It is already hard to recollect that just a few short years ago the city was unique for its charming traffic circles full of greenery and flowers, [but] they have vanished," wrote city activist Ravi Talwar in an article published at www.bangaloreonline.com . "No longer does the phrase 'Garden City' fit our beloved city."

But this isn't deterring anyone, says Tareen, who observes that "nowhere in the country is the infrastructure so well groomed for the high-tech industry. As for the infrastructure problems that have been cropping up, I am confident that they will be resolved." As in any boomtown, he adds, such adaptations take time.

Tareen, who hails from Karnataka, has also worked with his wife, Zareen Tareen, in setting up family-trust scholarships for promising children of low-income families. Zareen has directed a women's self-sufficiency program that assists them in starting small-scale businesses—many of which benefit from the boom's influx of people, all of whom require basic services from sewing to home repair.

"Opportunities abound in Bangalore for investment and professional growth," says N. Ahmed Ali, executive vice-president of SmithKline Beecham, which shifted its operational center from Bombay to Bangalore in 1994. "The youth realizes that there is no discrimination in this industry. Only performance counts."

One notable attempt to broaden opportunity can be found at Al-Ameen College for Science, Arts and Commerce. Founded in 1968 in a crowded corner of the city, Al-Ameen moved to its own campus in 1976. Since then, it has grown at a pace not unlike that of the city itself. It is now officially a university, offering training in fields from business administration to hotel management, pharmacy and engineering. But more significantly, it is committed to offering higher education to students from all of the city's diverse ethnic and religious communities: Muslims, Hindus, Christians, Sikhs, Parsees, Buddhists and Jains.

Similarly, a community group of software professionals, including Shahab Ahmed of Cal-Info, have plans to start a computer-literacy program for young people called Muslim Infotech Information Trust, whose classes would be open to non-Muslims as well.

"Thus the Islamic emphasis on education as a fundamental requirement, often forgotten, would be realized," says Gul Iqbal, an electronics and software export promoter who hopes to have three of the centers up and running by the end of 1997. With professional help secured and initial investments nearly complete, the plan looks like one among the many promising ideas blossoming along the high-tech frontiers of Silicon City.

Yasmin Mahmood is a correspondent for The Statesman, published in Delhi and Calcutta. She lives in Cochin.

David H. Wells is affiliated with the Matrix agency of New York.

This article appeared on pages 36-43 of the November/December 1997 print edition of Saudi Aramco World.


Check the Public Affairs Digital Image Archive for November/December 1997 images.