Tuesday, August 30, 2005

B for Bangalored

B for Bangalored

By Dr Bob Hoekstra
The Week

All southern states have great education environments, with Kerala having one of the highest literacy rates in the country, but being communist it has a hard time attracting free enterprise. So, well educated people exercise the option to come to Karnataka. Bangalore's population is a rich mix of people from all southern states, enriched with a significant percentage from the north as well. Hyderabad and Chennai are secondary magnets.

In 1996, the Philips R&D centre was created in Bangalore because it has a tradition of R&D. Research and development has a tendency of going to places where the quality of life is good. The reason is very simple: top R&D people are global who drift to places where they find a high quality of life and a great work environment. The best example is California's Silicon Valley, where you have Baywatch life daily and high tech conglomerates centered around some world class universities. So does Bangalore with IISc, National Law School, IIMB, National Institute of Advanced Studies and many engineering colleges.

When we started our operations in Bangalore, the largest companies were a few thousand people, when the real boom started around 1995. Then, campuses in Bangalore were only IIMB and IISc. Now there are software campuses everywhere, some close to the centre, but gradually moving to the outskirts and satellite towns. And the employees have progressed from two-wheelers to four-wheelers. The visitors who came to give the industries their tasks still do so but also come in flocks to learn. The hotels are overflowing and the strain on the infrastructure is obvious. Roads are congested, the airport halls, and tarmac are crowded, and the number of airlines in domestic and international routes are on the rise.

Bangalore still has the makings of a sleepy town, with little excitement once the rush hour is over. Once a pensioner's paradise and a garden city, such images linger on. But Elton John and the Rolling Stones have visited the city and high class shopping malls arise everywhere. The days of only having Grover red and white wine have disappeared with a variety of brands now available.

The power has been unleashed, it is obvious. The opening of the economy has allowed many industries to flourish. And an ecosystem has been formed which has great potential to really earn the name Silicon Valley of India. When academia are freed from their shackles and enter the world's top 100, when the education system changes from storing and reproducing knowledge to using knowledge to serve people's needs, when companies build on mutual expertise, by subcontracting and building partnerships, that is when the next wave of opportunities will arise.

And industries other than IT also derive confidence from the examples set, and rise to the occasion. Biotechnology, automobiles, textiles and pharmaceuticals are all on a growth path.

The materialisation of the opportunities is determined by the infrastructure. It is not a question if it happens in the south or in the north, it is a matter of India's competitiveness versus other countries. IT industry mainly needs infrastructure for its employees to commute and to live a high quality life. Other industries can be competitive within their gates, but lose it once they hit the road and the bureaucracy. After the IT jobs in the US have been Bangalored, our IT jobs too may be CapeTowned, Manillaed and Shanghaied. The rest of the industry may not see the growth needed to find jobs for the growing population if the ability to do business is not enabled with infrastructure.

At the same time, Naxalites are spreading from Andhra Pradesh into other states building on dissatisfaction in rural areas. Droughts, lack of power, poor roads, all spell misery for the agricultural community. The elections last year gave a clear indication of the level of dissatisfaction. The disparity between the poor and the rich continues to be a mystery for me as an expat. That I can keep my wallet in my backpocket when walking into any slum is pleasantly stunning. One does not do that in New York. But now the increasing disparity and the dissatisfaction are beginning to have their impact. Further development is only possible when it is balanced. Balancing by slowing down urban growth does not help, it should remain the engine of prosperity. But, structural improvements in the livelihood of urban poor as well as in rural India are a must. Healthcare, education, housing, agricultural productivity, connectivity, all require improvements.

The future looks bright for the south, the triangleó Bangalore, Hyderabad and Chennaiócan be the engine. Secondary cities can take some of the growth. Infrastructure must come up, hopefully, to realise the great potential. Industry will insist on it.

The author is CEO of Philips Software Centre in Bangalore



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