Asia Inc april 94

ECONOMICS: Bangalore's hi-tech boom

Bugs And Bytes In Bangalore
Young professionals are flocking to India's high-tech, computer city.

As darkness falls on southern India, Mahatma Gandhi Road comes alive with shoppers crowding the glitzy shopping malls, while young couples fill the numerous pubs.

Inside the pubs, men and women are often heard talking of bugs and bytes, not booze and barbecue. The technofreaks are drawn to this energetic city high on the Deccan Plateau not just by the modern markets and vibrant nightlife; many have come because of a piece of flat, barren land on the city's outskirts known as "Keonics City." There dusty streets lead to dreary, government-built factories flanked by neat lawns and identical, single-story buildings bearing the names of Fortune 500 companies such as 3M and Hewlett-Packard. Scattered elsewhere around Bangalore are the offices of Motorola, IBM, Texas Instruments, Digital and VeriFone.

During the day in these offices, twenty-something engineers clad in brilliantly hued salwakameezes (women's pantsuits) or pinstripe shirts and raw silk ties sit quietly in front of computers, creating software, testing programs and removing "bugs" (software errors). Occasional sighs can be heard above the clatter of keyboards when a program doesn't work.

Once considered a haven for retirees because of its temperate climate, Bangalore these days overflows with youth. Not only have high-tech companies proliferated here, but the city also boasts the corporate headquarters of Indian enterprises such as food companies Brooke Bond Lipton India Ltd. and Britannia Industries Ltd., liquor giant UB Group, electronics leader BPL India Ltd. and watch-maker Titan Watches Ltd. Hindustan Aeronautics Ltd. builds air force jets here, and other companies conduct space-related research for the government -- the result of the decision of Jawaharlal Nehru, India's first prime minister, to place strategic industries far from the borders of India's rivals, Pakistan and China.

"It is very easy to convince young professionals from the rest of India to move to Bangalore," says Shobha Seturam, a partner at A.F. Ferguson & Co., a leading consulting company in Bangalore. "The city has a yuppie image, and it has a growing cosmopolitan culture which welcomes young outsiders." And, she notes, Bangalore is one of the few places with lots of jobs for those under 35.

The city formerly served as a British military post with no-nonsense street names such as Infantry and Brigade roads. Its biggest attractions were a horse-racing course and the Bangalore Club, which today likes to note that its most prominent member, Winston Churchill -- whose army regiment was stationed in India in 1896 -- left owing membership dues.
Today Bangalore retains some of the charm of its past. Two-story colonial buildings dot lush, tree-lined avenues. Gardens and parks abound. Mustachioed policemen direct traffic that is remarkably disciplined by Indian standards. A short drive from the city are newly built country clubs offering the nouveau riche a peaceful retreat.

Given Bangalore's atmosphere and growing business community, it's no wonder that the city's population has nearly doubled during the past decade to about 5 million. With this growth, however, have come some of the same problems that plague the rest of the country: waiting lists to get telephone service, overcrowded roads filled with potholes and erratic electricity. "Sometimes I don't have enough power even to watch TV," complains George Smith, managing director of Motorola India.

Software companies come to India because of cheap labor, high proficiency in English (the language of international software) and a large, professional talent pool. That talent, says Richard Gall, managing director of Texas Instruments India, is what drew his company to India. The first multinational company to set up in Bangalore nine years ago, TI India has registered 12 international patents in the last five years.

Still, India's total software exports -- about $ 450 million last year -- are tiny. And Bangalore ranks behind Bombay in export earnings, notes Prakash Hebalkar, president of ProfiTech, a Bombay-based information technology consulting firm. "Bangalore has great public relations success because a few multinationals who went there first were surprised by the sophistication available in India," he says.

Whatever its success is due to, Bangalore continues to grow. Infosys Technologies Ltd., one of India's largest software companies, plans to build a huge software development facility here by 1995. And a Singaporean consortium, India's Tata group and the government of Karnataka state have joined to build an information technology park in Bangalore, Karnataka's capital.

Some residents worry that the influx of multinational companies will change what sweater-clad cabbies fondly call India's air-conditioned city. But if the state government remains committed to attracting only clean, environmentally friendly industries, Bangalore's best days may have only just begun.