Bangalore: India's silicon city

Monthly Labor Review, Nov, 1996 by John Stremlau

If an automatic teller machine in Boston, MA, swallows your bankcard because of a problem with the machine's new software, the problem may be fixed overnight by experts in Bangalore, India. Or suppose a fault in the Holiday Inn computer misdirects reservations: with a few key strokes, programmers at a fast-growing Bangalore company--Infosys Technologies--can access the hotel chain's central computer and repair the system that they designed. Many other international companies--General Electric, IBM, Reebok, AT&T/NCR, Texas Instruments, 3M, Hewlett-Packard, and Compaq, to name a few--depend on computer software developed and maintained in Bangalore.

Since 1990, India's annual software exports have soared, increasing 53 percent to reach $500 million in the 199495 fiscal year alone. Annual industry revenues in India totaled $840 million during the same fiscal year, and the National Association of Software and Service Companies estimates that sales will hit $5 billion by the end of the decade. The skills of India's top computer scientists are unsurpassed. The Capability Maturity Model, developed by the Software Engineering Institute at Carnegie Mellon, has been used to evaluate the software development processes of hundreds of companies. Software teams receive a rating of one through five, five being the highest. Less than a handful have yet to achieve a level-five rating, but one that did was Motorola's software team in Bangalore. According to a quality assurance consultant at Motorola, this facility routinely produces systems with a measured failure of one per million lines of code.

During the 1980s, Bangalore's main software industry exports were, in fact, not products, but people: software engineers and programmers who took jobs in the United States. Each year, the number of computer science graduates from Indian universities averaged around 15,000, and many went to the United States. As of 1990, India-born immigrants were 2.3 percent of all foreign-born residents and had the highest median household income of any immigrant nationality. By the mid-1990s, however, improved telecommunications technologies and Indian economic reforms made it relatively easy to contract with Indian firms or to set up one's own shop in an information-age "free trade zone," such as Bangalore's Software Technology Park.

International competition is hardly new. But thus far, American blue-collar workers have borne the brunt of these job losses. Workers in Bangalore, however, are not doing the routine assembly of circuit boards, nor are they just doing data input and routine processing work. Instead, Bangalore's engineers are designing the software programs that tell computers what to do. And American white-collar workers are having to compete with equally well-trained and, judging by the Motorola example, at least equally competent computer programmers in Bangalore.

Indian economic analysts view Bangalore's success in computer software as evidence that India can catapult to the forefront of the 21st century global economy. Stepping so rapidly into the top ranks of global information technology is seen as a refutation of conventional development theory, which consigned the "Indias" of the world to the same long, slow path Western industrial nations followed--from agriculture through manufacturing to hightech services.

Roots of success

Bangalore's high-tech entry into the global economy has some of its roots in legacies of British rule until Indian independence in 1947 and since then, in the ambitions of New Delhi's economic planners. Neither London nor New Delhi, however, anticipated--much less planned--Bangalore's emergence as a global software center. But both the British colonialists and India's post-independence ruling elite invested in Bangalore in ways that may help explain the city's current success.

Great Britain's greatest enduring contributions to India were the English language and law. The British built on India's rich traditions of scientific learning, including more than a millennium of achievements in mathematics, to develop the system of higher education that is a cornerstone of today's computer industry. Finally, British legal traditions have given India the reliable system of commercial law that neighboring China lacks, according to recent conference reports of the Organization for economic Co-operation and Development (OECD).

We may debate just how much Bangalore owes such British contributions, but there can be no doubt that modern Bangalore reflects decisions made by post-independence governments in New Delhi. Jawaharlal Nehru, India's first prime minister, had a vision for Bangalore. Calling Bangalore India's "City of the Future," he sought to turn it into a place where scientists could get away from the multitudes and produce ideas and programs that would guide the nation's ambitious plans to achieve economic and military self-reliance. For more than four decades, India's central government invested heavily in building Bangalore's civilian science and technology infrastructure as well as the nation's most advanced military and space research facilities.