Karnataka has all the requisite numbers to show how it is still a mighty force in information technology. But as they say statistics only reveal one part of the story. The Global Investors Meet 2012, held in Bangalore on June 7 and 8, was another vehicle used by the state to trumpet its achievements. And it did a pretty good job of it. The fact is Karnataka is still one of the country?s more progressive states contributing 13% of India?s exports. It hosts 87 Fortune 500 companies and has more than 700 multinational firms, besides 103 R&D units. Very impressive indeed.
But what is left unsaid is the stagnation. While Bangalore is still a huge brand, there is a sense of status quo. Bangalore?s best period as an IT destination was when SM Krishna was the chief minister. Krishna attracted investments by his sheer ability to convince potential investors about Bangalore?s tech strengths. Bureaucrats like former IT secretary Vivek Kulkarni too played a big role in developing Bangalore as a global IT destination. Since then, it?s been a gradual fall. The chief ministers who followed did not have the acumen to connect the IT dots.
What Bangalore needs is a strong chief minister who understands IT. At least someone who knows how to take the game forward. The present chief minister Sadananda Gowda is a man under immense political pressure. He clearly does have other things to worry about. To depend on him to take the IT flag forward would be a mistake.
That?s why Bangalore is betting on the newly constituted IT committee. A core committee comprising former Infosys board member TV Mohandas Pai, former STPI director BV Naidu and a few other corporate leaders has been set up to bring back some energy into the game. By 2020, the Karnataka government aims to increase its IT exports to $70 billion from $25 billion at present and create 2 million jobs in the sector as against 8 lakh jobs now, according to TV Mohandas Pai, chairman of the state?s vision group on Information and Communications Technology. Besides, the state also hopes to encourage at least 1,000 start-ups to come up over the next 8 years. ?This is a very audacious goal which will transform Karnataka,? said Pai.
The raw material available is rich. Karnataka, thanks to its myriad engineering colleges across the state, still offers a great talent pool. The state is developing a 1,156 acre IT/ITES industrial park and a 820 acre Electronic Hardware Industrial Park near the Bangalore International Airport (BIA). The state has also approved 17 SEZs for the sector. The government is also developing an Information Technology Investment Region (ITIR) near BIA with an investment of around $20 billion by 2030.
But the story needs to be now re-told. In a different fashion, probably. All these years, Bangalore was home to services companies like Infosys, Wipro and MindTree. The brand grew on the strength of these great companies. But now a new wave has to be built on software products. Bangalore has to transform itself into a software product destination, if it wants to keep its lead over other IT clusters in Asia. Things have not really worked for this industry in India, and in FY10 as many as 121 companies shut shop and another 324 turned into pure-play IT services in order to survive, according to a report from consulting firm Browne & Mohan.
Mobile products and life science software product companies were the ones badly hit. Bangalore and Pune were the two regions that had the highest impact in terms of closures. Around 26 mobile technology companies, developing applications and value added services (VAS) closed down, the report had said.
Bangalore needs to address this problem. If India is looking for greater respect in the technology world, half a dozen innovative product firms have to emerge. Greater incentives have to be ear-marked for such firms, and one has to protect intellectual property much more robustly.
Bangalore is touted as the Silicon Valley of India, but we will have to do some more work on creating the right ecosystem.
More risks need to be taken and engineering colleges should encourage students to become entrepreneurs in the software product space.
