Is Bangalore really India’s silicon valley ?

By Savita Kini, Guest Author

Any news article you have read since the emergence of the Indian IT industry often talks about Bangalore as India’s silicon valley.

It’s going to be a year very soon, since my husband & I relocated to B’lore. We have enjoyed the experience very much. The environment is dynamic here and the new generation especially those in their 20s are embracing entrepreneurship with more enthusiasm then I saw while I was growing up. Silicon valley had the same dynamism in late 1990s but after the dot.com bust, somehow life didn’t seem the same anymore. I hope things have improved in the last couple of years.

I thought it’s a decent enough time to do my own comparison between Bangalore, & the real Silicon Valley.

From the living experience point of view, Bangalore has been great – it’s definitely a much liberal city compared to other cities in India. I have got the best organic basil for Rs 6/-. :-). The weather, the greenery, the nearby hills/mountains are similar to the Bay area. The red soil, fruit orchards all remind me and make me feel nostalgic at times. As you go along the main arteries of the city, if you can keep from not being knocked off by the traffic, then the fancy buildings of the tech companies can really give you a jolt. When I first saw the Intel campus, I was sincerely shocked at how they had recreated the look & feel of the Santa Clara campus. A lot of startups have also spawned all over the city and I have come to know many of them, as well as aspiring entrepreneurs.

Bangalore’s emergence as a tech city really happened after the IT services companies picked up steam. Until then most of the innovative research & product companies coming from Bangalore never got the attention that they deserved. The IT companies started attracting the best minds from public research institutions with their salaries and onsite offerings. The growth of IT companies & cost difference attracted US/European technology companies who found it cheaper to have their own offshore development center so they could have more control over their IP and also put in place a longer term strategy.

Most of the work done today in these offshore offices, as well as the IT service companies is still the kind or cost reduction work that cannot happen in silicon valley. While definitely there has been some improvement in the kind of work that is happening here, it’s not comparable to the kind of cutting edge research and innovation that happens in Silicon Valley. The new startups are also mostly taking the beaten path as far as technology is concerned. Adding to the already skewed environment, the VCs have been flocking to the city hoping to capture the best deals. To manage their own risk, they continue to invest in late stage deals or in the services model. Some of the deals which happened in the last 1 year have majority been in the dot.com internet companies which my new friend Sramana Mitra calls Concept Arbitrage. I am not passing any judgment here. In a way it’s good because at least the entrepreneurial culture will get reinforced and more risk takers will emerge.

However, to be really compared to Silicon Valley, we need something much broader than the current mixture of IT services & products model.

We need to fund more research through public-private partnerships. Our institutions themselves need reform so that they can attract the best brains to do their PhDs. This also requires attracting the best minds into faculty positions who can do research but are also connected to the industry so that the best research also gets opportunity for commercialization. The current cream of PhDs that returned from abroad are strong enough to put up with beaurocracy in the institutions and fight it to some extent. But are they strong enough to bring to bear full-scale technological breakthroughs?

To create a more nurturing environment, we need the thought leaders in the industry to come out and openly support young entrepreneurs as angels. This piece of the puzzle is completely missing.

Apart from the part about funding, nurturing an entrepreneurial company also requires ability to provide strategic inputs. But if the current crème of the society has come from services industry, they cannot support the product companies. Most of the folks in the IT industry haven’t been strategic thinkers themselves. They excel in doing the same thing better and more efficiently. Also, they most leveraged the huge engineering population base to grow their companies quickly. Whether they really understand the challenges of a product company, it’s hard to say. Moreover, the few product companies who did try to stick it out – example: Deccanet – their failure itself has blocked out the risk-taking ability of the senior people in the industry. To address this problem we need the best entrepreneurs, I will even go so far as to say, we don’t even need entrepreneurs, but even if a few senior people from the product companies in silicon valley are able to nurture the upstarts, they will be able to provide more strategic inputs from their own experiences and challenges they faced with their products.

So my humble request to people: let’s stop calling Bangalore Indian’s Silicon Valley. We are not even 10% of what Silicon Valley is all about. Lets get to the task of reaching there, rather than pat ourselves on the back for few $$ that we have made in the past decade.