Bangalore Details

8/13/2019 Bangalore Details

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Bangalore: economic

success and challenges

ID 200876167

Anastasia Ivanenko


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Presentation plan

1. Bangalores basic geographic facts

2. Bangalore as an IT hub

3. The citys history of economicdevelopment (including factorsensuring Bangalores IT success)

4. Benefits that Bangalore enjoys and

challenges the city faces today5. Important lessons from Bangalore

6. Sources


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Having Problems with Your Credit

Card?

The problem with themachines new softwarecan be fixed overnight byexperts in Bangalore,India.

Many internationalcompanies (Reebok, IBM,AT&T/NCR, Hewlett-Packard, Compaq) dependon computer softwaredeveloped and maintainedin Bangalore


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Bangalores geographic facts

Located in the state ofKarnataka in thesoutheast of India

Population: 7 10million

Official language:Kannada. Otherspoken languages areEnglish, Hindi, Tamiland Telugu

The city enjoyssalubrious climatethroughout the year

Bangalore wasrenamed intoBengaluru in 2006


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Bangalore is known as the Silicon Valley of

India (IT cluster) It is No.2 tech hotspot in the world (2008) About one quarter of all Indian software firms

(Wipro, Infosys, etc.) are located in the city(50% of all software exports)

Bangalore is home to more than 1500international IT and business process outsourcingcompanies

According to the World Bank, Bangalore is one ofthe fastest growing cities in the world

The citys economy is estimated at US$ 47.2billion, and since 2001 it has attracted the thirdlargest share of FDI in India


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Bangalore in retrospective


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From the Garden City to the IT

hotbed Due to its specific geographic location, Bangalore

has developed a rich tradition of trading andcommerce

Todays Bangalore reflects decisions made by

post-independence governments in New Delhi A special vision: Bangalore as an education

center (Jawaharlal Nehru)

Since the 1960s the central government has

heavily invested into the citys civilian scienceand technology infrastructure as well as thenations most advanced military and spaceresearch facilities


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What were the factors determining

Bangalores economic success?1. The important role of policy makers:a) Central government - India economic

liberalization policy (started in the 1970s, butthey began in earnest only 1991)

b) Local government the active pursuit of foreigninvestment2. The important role of education and research

institutionsBangalore has the highest numberof engineering colleges in India ensuring acontinuous supply of fresh graduates for thethriving sector (3 universities, 14 engineeringcolleges, 47 polytechnic schools, industrialtraining institutes, a high-tech village)


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Other factors contributing to

Bangalores success:

3. Large low-cost technical human resource brains. In thesoftware industry, those characteristics have placed Indiaamong the top-ranked locations for softwaredevelopment outsourcing.

4.

Availability of venture capital (both domestic andinternational)5. Generation of backward and forward linkages6. Improvement of telecommunications technologies7. Changes in firm strategies in the industrial countries: the

increased demand for software development and the

decision to outsource certain software activities.8. British legacy an excellent system of higher education

with emphasis on mathematics, the reliable system ofcommercial law, the English language

9. Connections with non-resident Indians in Silicon Valley


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Bangalores plan of economic

development:1. We want to go to Silicon

Valley/Bodyshopping phase1980s-1990s

2. We want to be like Silicon Valley phase

remote software development forMNCs, with MNCs and by MNCs

3. We will go beyond Silicon Valley phaseoffshoring of services (BPO) in the

1990s and beyond4. Innovation hub: IT and other areas

(healthcare, life sciences, biotechnology,wireless protocol stacks) - after 2000


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Todays Thriving Bangalore (Infosys

HQ)


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Todays Thriving Bangalore (Brigade

Road, a popular commercial district)


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Todays Thriving Bangalore


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How has Bangalore benefited from

its rapid economic growth? Creation of a large number of jobs in

certain sectors Purchasing power has increased

dramatically over the last decade Investment has increased as well Various development projects have been

undertaken by the local government(mega-projects like public stadia and

infrastructure) International market access and vital

contacts in world markets


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What challenges does Bangalore

face?

a) Economic challenges

b) Social challenges

c) Environmental challenges


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Economic challenges

Serious disparities in income distribution - the educated middleclass is basking in the bliss of competitive salaries and newfoundfreedom, whereas the poor get more suppressed with no chancefor a better living (middle class comprises around 13% of the citypopulation, poor people 45%)

A large number of new jobs offered refer to very specific areas people of other professions (including teachers, engineers anddoctors) often have to seek jobs in the BPO area to make a decentliving

Cost of living in Bangalore has more than doubled in the lastdecade

The major issue for Bangalore is sustainability of its softwareindustry with rising salaries and land prices a lot of firms are

moving to other cities and even abroad (Pune, Hyderabad,Malaysia, the Philippines) So far, competition rather than a mix of competition and

cooperation has been the norm running Bangalore software firms(unlike other internationally successful specialized clusters)


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Social challenges

The citys cosmopolitan culture is coming under pressure in thewake of growing militancy of outfits claiming to represent theinterests of the local Kannadiga population (attacks on MNCsoffices, the reason local culture is endangered and disrespected)

English has become the major language of communication to thedetriment of other languages (Hindi and Kannada)

A new Americanized lifestyle of younger generations causes anegative reaction in Indian conservative society with its deep-rooted values like arranged marriage and cast system

Educational problems primary education is lacking, particularlyfor rural residents. About 40% of Indian adults are illiterate

There still exist strong restrictions to freedom of thought andreligion

Many Bangalores poor live in slums where they lack adequateaccess to clean water, proper shelter, food and sanitation

The number of suicides caused by extreme poverty has risen(between 2000 and 2003 nearly 3000 farmers took their lives dueto the loss of their agricultural land)


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Environmental challenges

Pollution the significant rise in traffic congestion hasincreased levels of both noise and air pollution

Rapid urban sprawl occurs in reaction to the needs ofcompanies and a burgeoning middle class rather thanas part of an integrated long-term city plan

(encroachment on important agricultural lands andvital green spaces) Managing the waste that Bangalore is increasingly

producing is also impacting the environment (a largepart of waste is dumped into open spaces in the cityor left on roadsides outside the city)

Uncontrolled land development has contributed to areduction of open and public spaces (e.g.lakes havebeen drained to make more room for newconstruction)


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Traffic in Bangalore


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Lessons from Bangalore (what needs to be

done to ensure further prosperity and

sustainable development)

1. Provision of a wider range of activities by Bangalore firms in the face ofrising land prices and wages ( focusing on the development of bankingand financial software, educational software, pursuing different areas ofresearch, e.g. in video-conferencing software)

2. Provision of more sophisticated services (outsourcing the lower-valuedadded or specialized tasks and taking on the more complex projects

and clients, including higher value-added ones)3. Less competition, more cooperation between firms4. Opening up of the domestic market - India is currently in the interesting

position of having a thriving software export business without having astrong domestic market for software

5. Improvement of infrastructure and telecommunications systems6. Broadening of the focus, creation of jobs in other sectors, not only in

the IT sphere ( around 60% of Indians depend on agriculture for theirlivelihoods)7. Improvement of education system, raising the literacy level among the

population8. Better-planned urban development, tackling the problems of air

pollution and noise, as well as traffic problems


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Sources

ABumpy Road toward Modernityin Bangalore. Global Envison.

http://www.globalenvision.org/Bangalamerica. Documentary.http://gustavus.edu/orgs/gactv/videos/s03/Bangalamericafixed.mov

Bangalore. UN Urban Management Program Regional Office for Asia and thePacific. www.serd.ait.ac.th/ump/Bangalore.pdf

Bangalore: Indias Silicon City. Bnet business network.http://findarticles.com/p/articles/mi_m1153/is_n11_v119/ai_19166448

Bangalore: third richest city in the country. The Times of India.http://timesofindia.indiatimes.com/articleshow/1842018.cms Impressions on Bangalore. Eurac Research.http://www.eurac.edu/Focus/171006INDIA/india_past_present_bangalore.htm

Local Pride Buffets Bangalore business. Asia Times online.http://www.atimes.com/atimes/South_Asia/JD02Df01.html

Solomon Benjamin. Governance, Economic Settings and Poverty inBangalore.unpan1.un.org/intradoc/groups/public/documents/apcity/unpan020773.pdf

The Essential Ingredients of Bangalores Success: Some Lessons from theCluster. International Trade Center.www.intracen.org/wedf/ef2005/Bangalore_success_ADSingh.pdf
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Bangalore Details