On Bangalore's crowded streets, hand-pulled carts compete for space with trucks, cars, and make-shift food kiosks, often bringing traffic to a snail's pace. The heat, grime, pollution, and potholes may daunt newcomers. But look more closely. Cheek by jowl with the noisy bazaars of Bangalore are swanky design and development facilities set up by both multinational and Indian companies.
In the cubicles within these walls, Bangalore's information technology engineers develop software and design integrated circuits and other products. These are scenes of nonstop innovation. Texas Instruments was the first multinational company to set up a development center in Bangalore in 1985. Following TI's lead, a number of multinational companies from the United States, Europe, and Japan have also set up design and development centers in the city.
For a while after Microsoft opened a software development center in Hyderabad in 1998, it looked as if Bangalore might lose out on new foreign IT investments to Hyderabad, the capital of the neighboring state of Andhra Pradesh, and to Chennai, the capital city of neighboring state, Tamil Nadu. But by 1999, the trend had reversed; Intel, Sun Microsystems, ZiLOG, and a number of other companies had set up design and development centers in Bangalore."Sun's decision to set up the center at Bangalore was primarily influenced by two areas in which Bangalore stood out compared to Chennai and Hyderabad, in that order -- availability of people with the right skills, and the capability to attract people from anywhere in the world to Bangalore," says Bhaskar Pramanik, managing director of Sun Microsystems' operations in India. Sun's India Engineering Center in Bangalore is an extension of the corporate engineering center in the United States and is expected to be the largest outside the States by June, 2001. "The work being done here is not just in sustaining or support, but in areas which will impact future Sun products and technologies," Pramanik says.
Bangalore is also home to a large number of Indian technology companies, including Wipro, one of the country's largest IT products and services company, and software services company Infosys Technologies. These companies built their revenue primarily by doing contract work for multinational IT corporations such as Microsoft, Nortel Networks, and SAP, as well as for large, multinational users of information technology. New entrepreneurs here are, however, focused on creating and licensing intellectual property, and they have not gone unnoticed by multinational corporations. Intel, for instance, has invested in Sasken Communication Technologies, and in early 1999 acquired Santa Clara, Calif.-based Thinkit Technologies along with its Bangalore-based subsidiary, Software & Silicon Systems.
Even before the multinational companies discovered Bangalore's potential as a design and development location, the city was already a key location in India for the electronics industry, primarily because the Indian government located a number of government-owned electronics companies and defense-research institutions in the city. In addition to its information technology and communications companies, Bangalore has a large number of manufacturing companies making automobile components, electronic connectors, and a variety of precision-engineering products.
New business opportunities, such as outsourcing by U.S. and European vendors of e-CRM (electronic customer relationship management) to Indian companies, are also extending the benefits of globalization to many college graduates who until recently were left untouched by the technology boom in the city. But the city did not anticipate the technology boom and prepare for attendant infrastructure bottlenecks such as the shortage of power and housing in the city. With an area of 366 square kilometers, Bangalore now has a population of 5.2 million and continues to grow.