Sunday, May 20, 2007

Code Silicon

Code Silicon
R Edwin Sudhir

The bullock carts rolling up Miller’s Road in 1985 looked like the other carts on Bangalore’s roads. But the consignment they delivered to Sona Towers were a little different — the addressee was Texas Instruments, the first MNC to set up shop here, and the delivery comprised computers, servers, etc. TI flicked the switch on the IT revolution.
The starting point of how this happened could be Michael Porter’s theory of competitive advantage of nations (or regions within nations). However, while this explains sources of national competitive advantage in older industries, according to Prof S Krishna, it falls short in explaining similar strengths in the new Knowledge Economy.
Prof Krishna, information systems, Indian Institute of Management, Bangalore, explains, “Porter’s model was based on a study of over 40 countries and with some industries going back centuries.
The software industry diamond doesn’t constitute
a complete alternative
model which could
emerge from a recently
initiated research consortium on Globally Distributed Work
(GDW). Nevertheless, we could
conjecture that these factors played
a big role — people, technology, organisation and communication.”
These are the four corners of the diamond (like the one on a playing card) which made Bangalore a jewel in the tech crown. Prof Annalee Saxenian cites the numerous research institutions here as critical contributors. Prof Krisha explains, “Historically, a long tradition of respect for intellectual values characterises our culture and this is a strength in the software / knowledge economy. ”
He feels the relatively low requirement for investment in machinery and physical infrastructure and the speed of adaptability and fast learning have helped Bangalore remain a mostfavoured tech destination. On the organisation and communication fronts, the modified diamond zeroes in on work culture which allows flexible work systems and new technology allows remote work, which now embraces even design and product development.
TI veteran Nagaraj Subramanyam, senior manager, says, “It was TI’s vision to utilise the vast pool of Indian talent. TI backed up its vision with a strong top-level leadership commitment in growing the Indian operations. In the initial years, we used to design small blocks which were part of larger chips being done in Dallas. Today, we are completely responsible for delivering complex System on Chip (SoC) systems, including both silicon and software.”
The strong links between the corners of the diamond and the local culture, historic links with the British system and a match with technological domain not requiring high infrastructure clinched Silicon Valley’s tryst with fame.
Through the 1990s, companies like Infosys and Wipro grew in stature and influence and now compete with the best in the world and Narayana Murthy and Azim Premji are role models for
the nation. The sleek International Tech Park in Whitefield, home to many IT companies, has become as iconic as the Vidhana Soudha.
The government did its bit by providing tax breaks and speedcleared land requirements.
Most importantly, it
stayed out of the way of
its growth. Data provided by the Software
Technology Parks of India tells an interesting
story — for 2005-06, there were 201 STP companies (of which 124 were foreign equity and 77 were Indian), total projected investment was Rs 2761 crore, proposed investment from foreign companies was Rs 1882 crore and 200 existing units expanded their operations. Karnataka’s IT exports was worth Rs 40,081 crore and the state’s share is more than 37% of the national figure of Rs 10009 crore.
Inadequate level of innovation and large bursts of political and social instability could have a negative effect on its growth, says Prof Krishna. Bangalore wannabes like Cyberabad or Chennai are ramping up their sops as well as seducing MNCs to set up shop there. But for the moment, the silicon sobriquet isn’t going anywhere.


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