Financial Daily from THE HINDU group of publications
Monday, Oct 31, 2005
Info-Tech - Insight
Columns - Vision 2020
Why Bangalore is not Silicon Valley
P. V. Indiresan
The IT industry in Bangalore is itself partly responsible for the poor state of affairs in the city. If it is impossible for cities to expand further without breaking down, future business expansion should only be in villages. K. Murali Kumar
The managers fared poorly because debating is not their profession, whereas for ministers it is a fulltime occupation. Activists too are past-masters in debate. To cite one example, the minister held the IT industry responsible for the poor state of affairs in Bangalore. The audience lapped it up. The IT managers should have come prepared for that line of attack but they had not. It did not occur to them to ask the Minister what he had done with all the taxes the industry had paid. Nor did they ask why the Government laid roads so narrow as to be useless in any modern town, let alone be worthy of a world-class city.
In another instance, the Minister scored points by pointing out how his Government had distributed free food to the poor. The IT managers missed a chance to counterattack: They should have taken the minister to task for keeping people so poor that they are forced to live on doles. The IT managers would not, or could not, carry the fight to the opponents' camp.
IT managers were so poorly prepared that they got their facts wrong. One said that for every job the IT industry creates, one more emerges elsewhere. That is a gross under-estimate. Each high wage job, like the ones in the IT industry, has the potential to generate seven to eight others. Due to administrative and political mismanagement, the figure in Bangalore is about three to four times.
Debating is not the core competence of IT managers; they should have hired a professional debater. At the same time, it must be said that the TV channel loaded the dice against the IT managers. Not many people realise that TV debates are organised the same way gladiators were thrown to hungry lions in Roman circuses. Both in the Roman circus and in the TV debate, the gorier the fight, sadder the death, the higher is the audience rating. Hence, TV channels lionise hungry critics who do nothing creative themselves but feed on other people's reputations. They then feed them with talented but defenceless gladiators like IT managers.
The IT industry came out in poor light also because it does have some weaknesses of its own. For instance, the TV audience lapped up the criticism that the IT industry was responsible for the mess in Bangalore. That criticism is true, even if only partially.
IT industry builds glamorous offices but expands without giving sufficient thought for the burden it places on infrastructure. That carelessness is the bane of Indian culture: Indians (and Indian businesses) are personally clean but dirty the surroundings; they have little civic sense.
The pioneers of the Silicon Valley were different; they were far sighted. They took care to construct their buildings 400 feet away from the main road. That simple precaution, one that cost comparatively little, made future expansion simple and (more important) feasible. In contrast, there is a seven-star hotel on the airport road in Bangalore that is built right up to the verge of the narrow road. That hotel's greed has made it impossible for the airport road to expand or carry more traffic.
Further, the semiconductor industry in the US did not locate itself close to San Francisco city but miles away in the Silicon Valley. Nearer the city, the explosive growth of the industry would have all but destroyed San Francisco. By moving away, the industry made San Francisco safe from unbridled expansion.
In India, industries crowd into already congested cities. They build right up to the very edge of highways and choke those arteries. It has been said that the Indian gene is peculiarly susceptible to heart attacks caused by fatty deposits in the arteries. Indian business suffers from an identical flaw; it deposits its fat by encroaching on busy roads, and by congregating in overcrowded cities.
Had Infosys and other IT businesses been located some 30-40 km from Bangalore (the way Hewlett Packard, the Silicon Valley pioneer, did), it could still have been no farther from the airport (at least in time) and would not be suffering from the atherosclerosis that afflicts its surroundings. The entire history of Bangalore would then have been different.
In the US (and in Europe too) those who can afford to do so live in villages (that is what suburbs are); only the poor live in cities. In India, it is the other way around; the rich crowd into cities, the poor live in villages. That is at the root of the contrast between the way Bangalore has developed and Silicon Valley did. That difference is not accidental; it is the result of the way governments operate in the two countries.
Village schools in India are of terrible quality; hospitals are non-existent; communications are terrible. As for power supply, the less said the better. However rich the villagers may be, they cannot get basic amenities of modern life. In the West, villages suffer from no such handicap.
The suburbs pride themselves on the quality of their schools. As a matter of fact, in American suburbs, the price of real-estate depends on the reputation of the local school. The power and telecommunication systems in the suburbs are as good as in cities. They are also well connected to cities by high quality roads. Because our villages offer no such amenities, even socially conscious entrepreneurs cling to cities, keeping away from villages.
In India, politicians win election after election, but where are the quality schools, hospitals, roads, telecommunications or reliable electricity?
With the help of such admirers as the Finance Minister, Mr P. Chidambaram, Mr Narayanamurthy may win this battle, but, as matters stand, he cannot win the war. He cannot win because what Mr Deve Gowda is saying has a germ of truth: IT companies are rich but our villagers are poor. IT companies are aggravating and not alleviating that disparity. They are creating heartburn even within cities by increasing the disparity between themselves and their neighbours.
As matters stand, Mr Deve Gowda will win both ways: He will make Mr Narayanamurthy the scapegoat if the IT industry prospers; if the IT industry gets hurt, he will claim credit for destroying an "usurper". Mr Narayanamurthy is caught in cleft stick. If he succeeds, he will be drawn into an increasingly bitter war. Other politicians may harass him. If he succumbs, his dreams will be shattered.
Vision 2020 is about solutions not complaints. In this case, Sherlock Holmes provides the cue: `Eliminate the impossible; what remains must be the truth however improbable that may be'. It is next to impossible for our governments to provide urban quality amenities in villages. It is impossible also for our overcrowded cities to expand anymore without inviting financial and ecological disaster.
If it is impossible for cities to expand further without breaking down, future business expansion should only be in villages. If it is impossible for governments to provide basic amenities in villages, only business can fill the breach. Both are improbable but not impossible. Hence, the solution for India's ills lies in businesses moving to the rural areas and developing on their own the facilities they and their employees need.
Let me repeat: Cities are impossible to expand without inviting disaster. Hence, villages are the only place to expand. It is impossible to expect politicians to modernise villages and destroy their vote banks. Hence, only businesses can modernise villages.
Industries developing villages is not as far fetched as it may appear. Not many people now remember a village called Sakchi. That village is now known as Jamshedpur. Without converting Sakchi into Jamshedpur, there would have been no steel industry in India. The government could not have built Jamshedpur. Even if it had tried, it would not have done an equally good job. It would not have done it as profitably either. Converting Sakchi into Jamshedpur was not altruistic but plain business sense.
Jamshedpur, and not Bangalore, should be the model for the IT industry. However, the Jamshedpur model is a hundred years old; it was designed for a single large employer. It needs to be updated and made compatible for multiple enterprises, large and small.
(The author is a former Director of IIT Madras. Response may be sent to: email@example.com)
(This is 161st in the Vision 2020 series. The previous article was published on October 17.)
(To be continued)
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