Bangalore Goes Global

[hkskyline]

Bangalore Goes Global
A labor crunch and foreign rivals force India's outsourcing hub to reinvent itself
By Aryn Baker
Time Asia
Posted Monday, June 12, 2006; 20:00 HKT


A new word has appeared during water-cooler conversations in offices across the U.S. The term is "Bangalored." It means your job just moved to India without you. But in the shifting global labor market, vernacular can quickly become outdated. What's the term for a job that is outsourced to India only to be relayed on to China, Uruguay or Romania?

There is none—but one may soon be needed. That's because India, which virtually invented offshore outsourcing of software programming and back-office business operations, is becoming a victim of its own success. Companies such as Infosys, Wipro and Tata Consultancy Services (TCS), India's top three outsourcing companies, became giants by tapping armies of quick-coding, English-speaking, low-wage technoserfs. But Indian salaries are rising—the median annual wage for a software engineer jumped 11% from $6,313 in 2004 to $7,010 in 2005, according to India's National Association of Software and Service Companies (NASSCOM)—and there's a mounting shortage of qualified workers that is crimping further growth. Fewer than one-third of the 400,000 Indians who annually graduate from the country's technical colleges have the right skills, says Kiran Karnik, president of NASSCOM. "We are sucking the well dry," he says, "and the current education [system] cannot replenish it quickly enough."

Not only is there a talent squeeze, but India is also feeling the sting of a globalization backlash. Outsourcing companies are springing up in low-cost markets worldwide, including China, the Philippines and Eastern Europe. "China has much the same resources as us: great pools of talent and a young workforce—and better schools, airports, and roads," says Karnik. What's more, major IT-service companies from the U.S. are muscling into India, accentuating the demand for well-trained young talent. Last week, IBM announced plans to invest $6 billion in Bangalore over the next three years. That means the U.S.-based tech giant will be adding significantly to its already vast India workforce of 43,000 employees.

Such pressures are forcing Bangalore to look for workers beyond India's borders. Infosys, Wipro and TCS have all built outsourcing campuses in China and are actively recruiting Chinese employees to serve North Asian markets. In an ironic twist, Infosys has gone one step further by hiring 300 Americans who recently graduated from top universities. They will undergo six months of training in India and then will be redeployed around the world. Wipro is looking at opening a campus in Vietnam, and plans to hire 1,000 bilingual speakers at a new center in Romania to service European clients.

To maintain profit margins and growth rates, Indian companies are also offering higher-value services such as R&D, infrastructure management and bespoke software design. "Our customers are now saying they want faster, better and cheaper services, but they also want their problems solved by someone who is intimately capable of understanding their unique challenges," says Nandan Nilekani, CEO of Infosys. Selling increasingly sophisticated services often means expanding overseas to gain the required expertise. Infosys has beefed up its U.S. consultancy wing by hiring specialists in the pharmaceutical, investment-banking and insurance sectors. Wipro, too, is venturing abroad, acquiring six foreign companies in the past six months, including the $53 million purchase of the Portuguese firm Enabler, which works with large retailers in Europe and Brazil. "The idea is to buy companies with skill sets we don't have in geographic regions we'd like to be in," says Lilian Jessie Paul, Wipro's chief marketing officer. TCS, which already has offices in some 45 countries, plans to increase foreign employees to 10,000 by the end of the year. In 2002, it had fewer than 300. "To keep growing, we need to make acquisitions," says Phiroz Vandrevala, TCS executive vice president.

So what's the word to describe someone whose job is outsourced to Romania via India? Wipro's Paul likes "globombed." Sudip Banerjee, president of enterprise solutions at Wipro, prefers the more subtle "flattened," with a nod to Thomas Friedman, author of the globalization bible The World is Flat. Says Banerjee: "The jobs will go to those who can do them best, in the most cost-effective manner. Geography is irrelevant." So are companies that fail to go global.

[Locust]

There is no way India can `outsource its way' to the economic powerdom.
It must tap on its own iternal market... rather than servicing someone
half a way around the world.

[hkskyline]

India's high-tech hub Bangalore renamed 'town of boiled beans'

BANGALORE, India, Nov 1, 2006 (AFP) - India's high-tech capital Bangalore, known worldwide as an outsourcing hub, on Wednesday changed its name to reflect the local language and became "the town of boiled beans".

The city in southwest India, capital of Karnataka, will officially use the local Kannada language name Bengaluru from now on, chief minister H.D. Kumaraswamy said at the 50th anniversary celebrations of the state's formation.

"As per the people's aspirations the government has decided to change the name of Bangalore into Bengaluru," Kumaraswamy told a gathering of more than 30,000 people at a cricket stadium. "The legal process is on."

The change, first announced last December, will take a couple of months to implement as it has to be approved by the federal government.

Nine other Karnataka towns are also changing their names, the minister added.

Bangalore, according to state historians, got its name from Bendakalooru (the town of boiled beans) after a king strayed into the area during a hunting trip in the late 14th century.

A woman offered him a meal of boiled beans which the king enjoyed so much that he named the town after the dish.

Bengaluru is a transliteration of the original spelling, according to state historians.

In recent years regional groups and prominent writers demanded the name of the city, home to six million people, be changed to better reflect the local language.

Language activists, who have demanded that signboards and billboards be displayed in Kannada as well, have also opposed the introduction of English in primary schools.

Sunil Mehta, vice-president of Indian software and outsourcing services lobby group NASSCOM, said the new name would not affect the more than 1,500 information technology companies that have set up base in Bangalore.

"One does not need to worry because of a change in name," Mehta told AFP. "The location is known as the upcoming Silicon Valley of the world."

Top technology companies such as Cisco, Dell, IBM, Sun Microsystems and Microsoft have set up shop in the city, which accounts for a major portion of outsourcing work in India.

"There will be no impact as Bangalore or Bengaluru will continue to deliver top class development and research services due to its highly skilled work force," Mehta said.

Several cities in India have been renamed since independence from British colonial rule in 1947 to reflect local languages and nationalist sentiments.

The southern Indian state of Kerala changed the name of its capital from Trivandrum to Thiruvananthapuram in 1991 and in 1995 financial hub Bombay became Mumbai to reflect the Maratha language of Maharashtra state.

The Tamil Nadu state capital of Madras was rechristened Chennai in 1996 and West Bengal's Calcutta became Kolkata in 2001.

[hkskyline]

Bangalore to conquer new heights
By IBNlive.com
Wednesday June 20, 02:10 PM

Bangalore has no space to grow horizontally now and since the urban sprawl has become unmanageable, the city is now looking skywards and vertical growth is the most likely option.

With the Bangalore Development Authority's (BDA) master plan 2015 finally getting the cabinet's nod, the IT city will now grow vertically and not horizontally.

"The Central Business District (CBD) should allow for much higher vertical growth. It would cater to the demands of the metro rail and outer lying areas should be much less dense and much more residential and not all uniform as it is now," says George Kuruvilla, an Urban Planner.

Bangalore's population is expected to cross the 10 million mark by 2020. Urban planners have said that the city cannot afford to be vertically challenged.

Builders will be allowed more floor area ratio that is more built-up floor space on the same plot. But it is cannot be ascertained if this new plan help to decongest the city.

"It depends for urban planning, where the vertical growth is suggested. If it's in the centre and along the metro rail axis then yes, but if its all over the city then its only going to lead to urban sprawl," says Kurvilla.

CIVIC’s Executive Trustee Katyayani Chamaraj is disappointed because the Government hasn't considered citizen's suggestions while working on the master plan.

"Several thousand objections must have come from citizens not to reduce the green belt area but in spite of that the Government has gone ahead and done away with the green area, so where was the need to consult citizens if they were not being taken into consideration," says Katyayani.

Despite it being the BDA’s new mantra, planners say that a horizontal urban sprawl is far dangerous than a vertical one.

[wcgokul]

Originally Posted by Locust

There is no way India can `outsource its way' to the economic powerdom.
It must tap on its own iternal market... rather than servicing someone
half a way around the world.

Don't worry we're getting there mate............

[hkskyline]

FEATURE-India's silicon valley eyes political change

BANGALORE, India, May 20 (Reuters) - It's been a frustrating time for many businesses in India's IT hub of Bangalore. Endless traffic jams, sporadic power, a chaotic airport and many politicians who just couldn't give a damn.

For four years, Karnataka state, home to India's "silicon valley", was ruled by a chaotic coalition with a regional party. With Janata Dal (S)'s support base among farmers, politicians were criticised for ignoring Bangalore's IT "elites".

The result - more decrepit public transport, four hour commutes, packed roads and blackouts that have taken some gleam off this city as it faces increasing competition from other cities such as Shanghai and Manila to attract foreign investment.

Now many executives hope state elections, ending on May 22, may offer hope for the world's "back office", accounting for a third of India's $41 billion software exports, by bringing in politicians to address grievances of businesses.

It is not just about political pie-in-the-sky promises.

Karnataka will hold the first major election under a new constituency map. The first new map in decades, it gives more political weight to urban India and its business workers and could weaken India's traditionally pro-rural politicians as the country prepares for general elections within the year.

"In the last four to five years, a lot was squandered away in Bangalore. What has happened, happened in spite of," said Ashok Kheny, an Indian businessman who has unsuccessfully battled for years to finish a $700 million highway and township project.

The last election four years ago was seen as a rejection of former chief minister S.M. Krishna's pro-urban policies in favour of farmers. Krishna, who promised to convert Bangalore into another Singapore, had helped propel the city into an IT hub.

A similar voter backlash happened in Andhra Pradesh in 2004, where a pro-IT party was thrown out by angry voters, increasing feelings in India that being pro-tech was not a way to win power.

As Kheny talked, aides remarked how it took ten minutes to cross the road to the upmarket hotel for the interview, such was the dense traffic and lack of road crossings.

Kheny returned to India in 1995 after 15 years in the United States to build a highway and townships that would connect Bangalore with the city of Mysore 110 km (70 miles) away. It was a landmark deal, India's first privately-funded highway.

But more than 338 lawsuits later and vocal opposition from Deve Gowda, leader of Janata Dal (S), the consortium has still finished less than 50 percent of the work. The project may now cost around $1 billion due to cost overruns.

"Often in business, perception is more important than the bottom line, and Mr. Gowda has created the perception of being anti-business in Bangalore," said Kheny, managing director of the Nandi Infrastructure Corridor Enterprise consortium.

BOOMING BANGALORE

Bangalore is still booming. Malls and offices sprout up. But the worry is that the pace of the boom is outstripping infrastructure to a degree that companies may move elsewhere.

Faced with infrastructure bottlenecks and rising real estate costs, firms like Infosys Technologies, India second-largest software services exporter, and India's top biotechnology firm Biocon -- which both have their headquarters in Bangalore -- are mulling expansion projects outside the city.

Last month, Infosys said it would invest around $120 million in a new development centre in the eastern city of Kolkata.

"Nothing has been done in the last 4-5 years and we're worried Bangalore will lose competitiveness. Companies are expanding to other places," said Raghavendra Shastry, head of Getit Infomediary Ltd, the Yellow Pages publisher in Bangalore, adding some companies were now eyeing Manila for outsourcing.

"And it's not Bangalore that will lose business, it's India."

It is the microcosm of a wider problem in Asia's third largest economy, where poor infrastructure has investors worried it will soon slow India's breakneck economic growth.

It was a sign of the times, executives say, that the three parties in the election -- Congress, the Hindu nationalist Bharatiya Janata Party (BJP), both national parties, and the JDS -- have published separate manifestos for Bangalore.

Their promises range from a new metro to cutting pollution by turning all public transport to natural gas.

"JDS has realised its mistake of ignoring Bangalore," said Subir Roy, an editor of the Business Standard in Bangalore.

HAIL THE URBAN VOTER?

Villagers no longer hold the sway they used to under India's constituent map. Previously, India's constituencies were based on a 1971 census, when India was hugely rural. The new vote is based on a 2001 census, when millions had migrated to the cities.

Bangalore has more than doubled its state assembly seats to 28, more than 10 percent of the state assembly's seats.

"Traditionally in India, the perception of being a pro urban politician was a kiss of death," said V. Ravichandar, managing director of Feedback Consulting in Bangalore, which advises multinationals across India.

"Now, for example, there isn't one qualified urban planner in the city or state government. But parties are responding to a new urban reality, and a middle class is finding their voice."

There is a lot to do. Ravichandar pointed to the new international airport in Bangalore, majority held by Siemens Projects. After many delays it is due to open this year. But no new road has been built to the airport. Drivers expect chaos.

"We have distracted politicians. Politicians have just taken Bangalore for granted," Ravichandar said.

To make matters worse for a new operator, there are calls to allow the old state-run airport in Bangalore to run alongside the new airport, angering the operators who say their contract stipulated the old one would close.

Ravichandar said 33 different state and federal agencies were involved in a new airport road, making planning even harder.

Some fear Karnataka may yet again produce a coalition government. The last one was so chaotic it ended in presidential rule being imposed. Many businesses hope for a single party win, whether it be the Congress party or BJP.

Media reported that turnout may have been low in the three stage election -- a possible sign of how India's new urban and middle classes are politically apathetic.

Still, businesses were not about to give up their city.

"I'm always optimistic," said Capt. G.R. Gopinath, Vice- Chairman of Deccan Aviation. "As the saying goes, business always succeeds if you have great inspiration and a lack of resources."