Economy of Bangalore

The headquarters of Infosys, India's second largest IT company, is located in Bangalore
The Public Utilities Building is a major economic center

The Economy of Bangalore is an important part of the economy of India as a whole.

India became independent from Great Britain in 1947. The establishment and success of high technology firms in Bangalore has led to the growth of Information Technology (IT) in India. IT firms in Bangalore employ about 35% of India's pool of 2.5 million IT professionals and account for the highest IT-related exports in the country .

The city's income gross domestic product in 2004-05 was valued at INR 433.8 billion.[1]

One of the important factors spurring Bangalore's growth was heavy central government investment in Bangalore's public sector industries, partially because it is geographically out-of-reach from India's rivals Pakistan and China. This led to the concentration of technical and scientific navigator in Bangalore, and is a factor in leading the "IT revolution" in Bangalore. Karnataka's political leaders such as D. Devaraj Urs, Ramakrishna Hegde, Gundu Rao, Veerappa Moily,H.D.Deve Gowda, J. H. Patel and S.M. Krishna each played a pivotal role in the development of Information Technology and Business Process Outsourcing (BPO) in Bangalore. When R. K. Baliga, Founder of the Electronics City proposed the concept of developing the electronic city in the early 1970s it was met with skepticism but Chief Minister D. Devaraj Urs at that time supported him and approved the project. This initial seed investment by the Karnataka State Government in 1976 laid the foundation for the Electronics City.

Silicon Valley of India

UB City in Bangalore

Bangalore is nicknamed the Silicon Valley of India. The name signifies status of Bangalore as a hub for information technology (IT) companies in India and is a comparative reference to the original Silicon Valley, based around Santa Clara Valley, California, a major hub for IT companies in the United States. Bangalore, however, is located on a plateau and not in a valley; the use of the term in reference to Bangalore is not truly toponymous. One of earliest mentions of this sobriquet occurred in late 1980s in the Indian Express.[2] The more prevalent application of the nickname Bangalore began in the 1990s[3] based on a concentration of firms specialising in Research and Development (R&D), electronics and software production.

The Electronics City was the brainchild of R. K. Baliga, the first Chairman and Managing Director Karnataka State Electronics Development Corporation, a government owned agency aimed at expanding the electronics industry in the state of Karnataka established in 1976. Baliga proposed the concept of developing the electronic city in the 1970s. The agency purchased 335 acres (1.36 km2) of land 18 km south of Bangalore for its Electronics City project, which was meant to establish an industrial park in Bangalore. Notwithstanding complaints by the industrial park's tenants on the condition of the roads, power and water availability, KEONICS claimed initially that the title of Silicon Valley of India belonged to the city's Electronics City campus.[3] As part of its promotion of this concept, KEONICS distributed reprints of an article entitled Can Bangalore become India's Silicon Valley" that first appeared in "Plus: The Total Computer Magazine".

The article made references to studies of Bangalore published by United States Agency for International Development (USAID) that favourably evaluated Bangalore's capacity to grow into a high technology hub, similar to the Silicon Valley. The publication also published interviews with IT industry professionals on the state of the IT industry in Bangalore and their perceptions of what lay ahead in the future. Selected quotes from the interviews included:

If the Centre looks at Bangalore to be made into Silicon Valley, it would certainly become the Silicon Valley; If you are talking of a Silicon Valley kind of atmosphere, then Bangalore already has it, but if you are talking of a product a day, then we are far from it; Bangalore is certainly emerging as a software and R&D subcontracting centre for multinationals; It is not an unreasonable comparison to make between Bangalore city and Silicon Valley; Bangalore has the ingredients to become Silicon Valley... It is probably the only city in India that could become one.[3]

The turn of the millennium witnessed the growth of internet based technologies which resulted in the dotcom boom. Bangalore's IT industry grew during this period with the establishment of local and foreign IT companies. In 2001, BusinessWeek published an article entitled "India's Silicon Valley" which traced the growth of the IT industry in India and particularly in Bangalore. The use of the term "Silicon Valley of India" to refer to Bangalore grew in local media and as time progressed, in international media too. An article entitled "Is the Next Silicon Valley Taking Root in Bangalore?" appeared in the New York Times in 2006[4] Indeed, some articles in the western media wondered if the original Silicon Valley would one day be functionally replaced by Bangalore[5]

Shashi Tharoor, has suggested that in place of the cliché of Silicon Valley of India, Silicon Plateau of India would be appropriate.[6]

Aerospace and Aviation industries

The Sukhoi-30MKI is a dual-role fighter that is manufactured under license of Sukhoi by Bangalore-based Hindustan Aeronautics Limited for the Indian Air Force.

Bangalore also called the aviation monopoly capital of India. It accounts India's more than 65% aerospace business. World Aerospace giants such as Boeing, Airbus, Goodrich, Dynamatics, Honeywell,GE Aviation, UTL,others have their R&D and Engineering centres.

Long before Bangalore was called the Silicon Valley of India, the city made its name as headquarters to some of the largest public sector heavy industries of India. The Hindustan Aeronautics Limited (HAL) headquarters is based in Bangalore, and is dedicated to research and development activities for indigenous fighter aircraft for the Indian Air Force. With over 9,500 employees, it is one of the largest public sector employers in Bangalore.

Today, HAL manufactures, under license, various fighter aircraft for the Indian Air Force (IAF) including Sukhoi 30 Flankers and Jaguars. HAL also develops indigenous products for the IAF such as HAL Tejas, Aeronautical Development Agency, HAL Dhruv and HAL HF-24 Marut.

The National Aerospace Laboratories (NAL) is also headquartered in Bangalore and is dedicated to the development of civil aviation technologies. Incorporated in 1960, NAL often works in conjunction with the HAL and has a staff strength of over 1,300 employees. NAL also investigates aircraft malfeasance.

A 1,000-acre (4.0 km2) special economic zone for the aerospace industry is being set up near the Bangalore International Airport. Bangalore was also home to large domestic airlines - now defunct Simplifly Deccan and Kingfisher Airlines.

Manufacturing Industries

Other heavy industries in Bangalore include Bharat Electronics Limited, Bharat Heavy Electricals Limited (BHEL), Indian Telephone Industries (ITI), Bharat Earth Movers Limited (BEML), HMT (formerly Hindustan Machine Tools), Hindustan Motors (HM) and ABB Group.

Bangalore is also becoming a destination for the automotive industry. Toyota has a manufacturing plant in Bangalore while Daihatsu is planning on building a factory soon. Hindustan Motors also has a manufacturing facility in Bangalore as does Volvo Trucks.

Bangalore houses many small and medium scale industries in its Peenya industrial area that claimed to be one of the biggest in Asia 30-years ago.

Space technology

In June 1972, the Government of India set up the Space Commission and Department of Space (DOS). India's premier space research organization, the ISRO was created under the DOS and headquartered in Bangalore. The main objective of ISRO includes development of satellites and launch vehicles. Aryabhata, India's first satellite, was developed and successfully launched by ISRO. Since then, the organization has successfully launched numerous other satellites such as Bhaskara, Rohini, APPLE, and the INSAT series, and successfully deployed PSLVs and GSLVs. ISRO also heads India's ambitious moon and Mars program.

Information Technology IT

Office of Oracle (formerly i-flex Solutions) at Bagmane Tech Park Bangalore, India

Bangalore is called the 'Silicon Valley of India' due to the large number of information technology companies located there. Many multinational corporations, especially computer hardware and software giants, have operations in Bangalore.

Bangalore's IT industry is divided into two main "clusters"[7]—Electronics City and Whitefield. New clusters in Bellandur, Hebbal and Challaghatta have emerged in the last few years along the Outer and Inner Ring Roads and in C. V. Raman Nagar near Old Madras Road. The City is home to more than 900 IT firms.

Electronics City

Electronics City, located in the southern outskirts of Bangalore, is an industrial park spread over 330 acres (1.3 km2). Electronics City was formed in 1978.[8] 3M, Hewlett Packard and Siemens are some of Electronic City's clients. Infosys and Wipro, India's second and third largest software companies, are headquartered in Electronics City. The Software Technology Parks of India, Bangalore (STPI) was started at Electronics City in 1991 by the Ministry of Information Technology. STPI Bangalore counts among the premier and oldest Internet Service Providers (ISP) in India. It was the first center to be Internet-enabled in India. Nortel Networks is a prominent client of STPI Bangalore.

Whitefield

Whitefield cluster is home to the International Tech Park Bangalore. It was created as a result of a joint venture between India and Singapore in January 1994. It is a large facility, comprising 9 buildings—Discoverer, Innovator, Creator, Explorer, Inventor, Navigator, Voyager and Aviator plus a building belonging to TCS. The tenth building which is under construction will be called "Victor". The Export Promotion Industrial Park Zone(EPIP) in Whitefield provides campus facilities for SAP, Xerox, iGATE, Dell, TCS, Unisys, Delphi, Huawei, Oracle, Perot Systems. Captive centres of Tesco, Shell, Aviva, GM, Schneider Electric, GE, Sapient, Goodrich / UTC aerospace and DaimlerChrysler, Symphony Teleca Corp and Tangoe are also located in Whitefield. Flowserve, a 100% subsidiary of Flowserve Corp(NYSE:FLS) also has a Manufacturing Plant and R&D center located in EPIP Area.

Other IT Parks

The Bellandur - Marathahalli - Outer Ring Road cluster houses Deloitte, Accenture, Intel, SanDisk, Aricent, Symbol, Cadence, Cisco, EMC Corporation, Nokia, National Instruments, Honeywell, ARM, Cummins, JP MorganChase, Oracle, Logica CMG, Business Objects, Freescale Semiconductors, Capgemini, Sony and i2 Technologies. It includes 7 IT parks such as RMZ Ecospace, Prestige Tech Park, Intel Park, Cessana SEZ, Vrinadavan IT Park, Global Technology Park and 3 Salarpuria IT Parks.

The Inner Ring Road cluster Embassy Golf Links Business Park near the HAL Airport in Challaghatta includes Dell, Microsoft, IBM, Yahoo, NetApp, McAfee, Bearing Point, Fidelity, ANZ, LG, CSC, Synergy, PSI Data, Target, Misys, Dendrite, Sasken, BPL Sanyo, OpenSilicon, Xora, Lenovo, Apostek and net positive.

Bagmane Tech Park located in C. V. Raman Nagar off Old Madras Road, houses Oracle Corporation, Motorola, Texas Instruments, Samsung, Novell, Dell, Cognizant and Volvo, among other companies.

Old Madras Road also hosts C-DAC,one of the premier Govt of India's IT R&D institute.

Manyata Technology Park is a (special economy zone) in Nagawara along the outer ring road where many MNCs have offices. IBM, Philips, NXP, Alcatel-Lucent, Nokia Siemens, Cognizant Technology Solutions, Samsung are some of the major companies in this area.

In August 2005, the Bangalore Forum for IT (BFIT), which consists of 18 major multinational IT firms including Sun Microsystems, Texas Instruments, Philips, Novell, vMoksha, Synopsys, Hewlett-Packard and Motorola, threatened to boycott the Bangalore IT convention. The proposed boycott was designed to indicate the displeasure of local and international technology companies with the city's lack of progress on the infrastructural front. Increasingly, new IT centers are being built away from this city due to long inner-city commute times, poor infrastructure, high land and labor costs, increasing environmental problems and labor retention issues.

Bangalore is also hub to many high-tech companies Infosys, Wipro, Tata Consultancy Services, Accenture and many others.

Biotechnology

Biocon, headquartered in Bangalore, is one of India's largest biotechnology companies.

Biotechnology is a rapidly expanding field in the city. Bangalore accounts for at least 97 of the approximately 240 biotechnology companies in India. Interest in Bangalore as a base for biotechnology companies stems from Karnataka's comprehensive biotechnology policy, described by the Karnataka Vision Group on Biotechnology.[9] In 2003-2004, Karnataka attracted the maximum venture capital funding for biotechnology in the country - $8 million. Biocon, headquartered in Bangalore, is the nation's leading biotechnology company and ranks 16th in the world in revenues.

Institute of Bioinformatics and Applied Biotechnology (IBAB), initiated by Biotechnology vision group, ICICI and Biocon (located at ITPL) is trying to shape revolutionary scientists in the field.

Like the software industry which initially drew most of its workforce from the local public sector engineering industries, the biotechnology industry had access to talent from the National Center of Biological Sciences (NCBS) and the Indian Institute of Science (IISc).

And Indian Biotechnology Research Organisation (IBRO) is recently under process of development to boost Biotechnology Growth in India, providing the Advanced Research and Talent pool to India from IBRO, whose mission and vision is Research and Development in Biotechnology to make India as a Global Leader in Biotechnology.

Other Major Biotechnology company based out of Bangalore is Advanta India.

Other industries

Bangalore accounts for 70% of all rose exports from India and leads in floriculture business.[10] Karuturi Global Limited located in Bangalore is world's largest grower of cut roses.[11]

Some of the other major companies headquartered in Bangalore are:Canara Bank, United Breweries Group, GMR Group, and Idiom Design and Consulting.

A majority of the 35 billion silk industry in India is headquartered in Karnataka State, particularly in the North Bangalore regions of kolar, Mulbagal,and Doddaballapura the upcoming sites of a 700 million "Silk City".[12] Muddenahalli, in the outskirts of Bangalore, is the sites of the upcoming Sri Sathya Sai Baba University and College of Medicine and 6 billion Visvesvaraya Institute of Advanced Technology.[12][13][14] Devanahalli is set to be the site of a 95 billion Devanahalli Business Park, near the Bangalore International Airport.[15] These developments are set to contribute significantly to Bangalore's economy by creating jobs, expanding educational opportunities, and spurring infrastructure.

After making a mark as IT hub, Bangalore is hoping to evolve as a financial centre with the creation of a dedicated facility for companies in financial services. It has the software in the form skilled human resource, presence of global leaders in financial services and allied sectors and a proven capability to attract the needed resources. All that remains is to assemble the hardware – a dedicated financial city. Some of the noted financial companies in Bangalore are: Deloitte Consulting,[16] Oracle Financial Services,[17] ING Vysya[18] and DreamGains Financials Pvt. Ltd.[19][20]

References

  1. ↑
  2. ↑ The Indian Express (Bangalore Edition). 6 November 1988
  3. ↑ 3.0 3.1 3.2 Heitzman, James. "Becoming silicon valley". India-seminar.com. 2001
  4. ↑ Rai, Saritha. "Is the Next Silicon Valley Taking Root in Bangalore?". The New York Times. 20 March 2006
  5. ↑ Morphy, Erika. "Bangalore Besting Silicon Valley?". 29 July 2004
  6. ↑ "Article in The Hindu". Hinduonnet.com. 2002-11-10. Retrieved 2013-08-15.
  7. ↑
  8. ↑
  9. ↑ "Bangaloreit.com". Bangaloreit.com. Retrieved 2013-08-15.
  10. ↑ "Bangalore rakes in moolah this Valentine's Day". TNN (Times of India). 5 February 2002. Retrieved 24 November 2008. |first1= missing |last1= in Authors list (help)
  11. ↑ "Director's Report". Economic Times of India. Retrieved 24 November 2008.
  12. ↑ 12.0 12.1 "Silk city to come up near B’lore". Deccanherald.com. Retrieved 21 December 2010.
  13. ↑ "IIT will be established at Muddenahalli, says Moily". The Hindu (Chennai, India). 2 June 2009.
  14. ↑ "International sports village location to be finalised soon". The Hindu (Chennai, India). 9 July 2009.
  15. ↑ "Karnataka focuses on infrastructure development". The Hindu Business Line. 5 September 2009. Retrieved 21 December 2010.
  16. ↑ "Services". Deloitte.com. Retrieved 2013-08-15.
  17. ↑ "Financial Services - Overview | Industry | Oracle IN". Oracle.com. Retrieved 2013-08-15.
  18. ↑ "ING | About Us". Ingvysyabank.com. 2008-10-20. Retrieved 2013-08-15.
  19. ↑ "Trading Tips|Nifty Futures|Stock Cash|Commodity Advisory|DreamGains Financials (I) Pvt. Ltd". Dreamgains.com. Retrieved 2013-08-15.
  20. ↑ Anjana Chandramouly (2012-05-05). "Bangalore eyes financial businesses | Business Line". Thehindubusinessline.com. Retrieved 2013-08-15.

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