Urban development and the information technology industry: a study of Bangalore, India

摘要

The focus of the study is the city of Bangalore, in India, which has over the years become a centre forudhigh technology industries, and in the mid-i 990s was home to the largest number of InformationudTechnology (IT) firms in India. This has earned it the title of the 'Silicon Valley of India'. The city'sudcomparative advantage in the IT industry in India emanates from various factors, of which favourableudgovernment policy, high quality work force, and the availability of research laboratories are some of itsudcrucial determinants.udThis research aims to understand the reasons for Bangalore's success in attracting both foreign anduddomestic IT industries (especially between the mid-i 980s, when the Indian economy showed the initialudsigns of opening up, and the mid-I 990s), and investigates the extent to which the city can continue toudbe the most preferred location for IT industry in the country.udThree research hypotheses have been tested in this research study. The first is directed towards theudglobal IT industry, and contends that the global IT industry's interest in India goes beyond mere priceudconsiderations alone. The second proposes that the success of Bangalore in attracting the ITudindustries is due to a synergy of factors, which include favourable government policies, availability ofudskilled professionals, and local presence of research institutes and laboratories. The third hypothesisudis guided towards the industry-institution linkage, and argues that there exists a strong link betweenudthe IT industry and the research laboratories in Bangalore, which has helped underpin growth in theudlocal IT industry.udThe empirical analysis was conducted at tm, levels. One at the national level of policy making, andudanother at the city level. The research is based on both secondary sources of data and primary dataudcollection. The study relied on two types of field surveys, a firm-level survey and a policy makersudsurvey. An understanding of the competitiveness of Bangalore is carried out using a set of indicatorsudwhich include inter ella level of telecommunications infrastructure, government policies, availability ofudindustrial/office space, skilled labour and specialised services.udThe study finds that initially the main reason for the industrial growth in Bangalore was to be found inudthe strong industrial tradition of the region, dating back to the earlier part of the twentieth century andudlater, by government owned electronics and telecommunication industries that were founded in the cityudimmediately after the country's independence (in 1947). Electronics industries continued to baseudthemselves during the 1 960s and through the I 980s in the city. However, when the Indian economicudpolicy was hberalised from the mid-1980s and more perceptibly after 1991, it was the lnfomiationudTechnology industries that began to establish themselves in Bangalore primarily to tap the availableudprofessional skills, and to make use of the city's existing base as a prominent centre for highudtechnology industries. The research also found that there are strong links between the researchudinstitutes and laboratories and the private IT companies in Bangalore especially in R&D relatedudactivities. While many of the interviewed companies felt that Bangalore would continue to be theudpreferred location for the IT industry in the country, they do not rule out the possibility that anudimpending infrastructure crisis in the city will undermine its competitiveness.