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Updated December 25th, 2023 at 17:18 IST

Bengaluru Bowled-out? 4 front-runners for India's new Silicon Valley

Guesses on India's new Silicon Valley made rounds globally, but what makes a city an IT eye-candy is a puzzle.

Reported by: Saqib Malik
AI
Representative Image | Image:Unsplash
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Tech dominance redefined: For last four decades, Silicon Valley has been synonymous with Information Technology. Home to 30 out of the Fortune 1,000 companies and based in the southern part of the San Francisco Bay Area, it ruled the roost till recent past. Interestingly, this global tech centre, at one point in time had the third largest GDP per capita in the world, next only to Zurich and Oslo. 
Even as thousands of startups were born in Silicon Valley's high-tech innovation eco-system, global firms' increasing offshoring policy, has led to cities across India become a base for white-collar jobs. Republic Business did a reality check, to put forth parameters that may play a pivotal role in deciding which among the country's four IT hubs- Hyderabad, Delhi NCR, Pune or Ahmedabad- to possibly become country's new Silicon Valley.     

Global Capability Centers 

Representative Image | Unsplash 

With a large number of incubation centres having come up in Ahmedabad, Pune, Hyderabad, and Delhi NCR, a neck-and-neck competition is imminent for these four cities to earn the best in class, when it comes to Global Capability Centers (GCCs). A recent National Association of Software and Service Companies (NASSCOM), revealed that Hyderabad has emerged as the favourite city for GCCs, which are typically the offshore units of multinational corporations that operate across the globe.  

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This year, with eleven GCCs, including new ones and expansions, Hyderabad is leading the way along with Bengaluru. Mumbai and Pune are also emerging as innovation hubs, as they have welcomed GCCs in the first half of 2023, as per NASSCOM. The once-unassuming Delhi NCR, has also seen several companies set up delivery centres and liaison offices in Noida, Delhi, and Gurugram. These set-ups have been established to gain an advantage of the region's high-quality infrastructure, manpower, real estate, and supportive government policies. 

Realty Growth   

Representative Image | Unsplash 

Infrastructure problems, coupled with higher operational costs, have posed pressing problems for mega tech centres such as Bengaluru. Currently, a third of all staff at the country's GCCs are based in the Karnataka capital alone, according to research from consulting firm Zinnov. These employees, by and large also tend not to stick around in their jobs for very long. In terms of infrastrcture lacunas, a known fact which is further validated by cab-aggregators' data, suggests that unlike Bengaluru, intra-city travel time, for instance between Pune's IT hub Kharadi and its popular neighbourhoods, located within a radius of 10-15 kms from the tech offices, is less than 45 minutes. Commuting time in Pune, and upcoming IT centres such as Ahmedabad, Coimbatore, Mysuru and even Jaipur can help them become more attractive as emerging IT hubs. Talent and real estate costs for companies in these cities can be about 30 per cent and 50 per cent cheaper, according to Deloitte. A higher Floor Space Index (FSI) available in these cities, also upcoming prominent realty markets, is an icing on the cake. The IT workforce in the country is young and willing to move. This creates a huge scope for tech companies to build offices in many of the Tier-2 cities. 

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Startup Ecosystem

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 As many as 75 per cent of the country’s top 100 engineering schools, like the alma maters of Microsoft and Alphabet bosses Satya Nadella and Sundar Pichai, are in smaller towns. While IT companies are creating a plethora of oppourtunities, more than 2 lakh roles in the country for data scientists and AI experts were unfilled as of August 2022. As global companies leverage technology to usher in the next wave of productivity, they could also find themselves spreading out across the the country. The churning out of tech talent from a cities such as Hyderabad or Pune, also known as Oxford of East, has been huge. Similarly, Deemed Universities being established in Tier-2 and Tier-3 cities of the country, is also putting these academic hubs on the IT map of the world.

Knowledge Hubs 

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From Walmart to Germany’s Bosch, Fortune 500 companies are considered to be increasing their focus on India, when hiring artificial intelligence experts as they are for back-office roles. Increasingly, firms are leaning on employees in the country to execute more complex engineering and research tasks. While cities such as Ahmedabad, Pune, Delhi NCR have emerged as IT hubs, mega proposed investments to boost Research and Development (R&D) infuse to strengthen their skilled workforce . While Pune is known for its Venture Centre, NCL Campus, and the Science & Technology Park, Hyderabad has been catching up fast too. This southern city, boasts of its Financial District and HITECH City. The upcoming IT hubs of India, in the race to gain prominence, are also investing in research centers and knowledge hubs. A striking similarity of these cities with the Silicon Valley of the Francisco Bay Area, is that they have the geographical attributes and local culture of a ‘smaller city’.  These are all cities, located close to important financial hubs – in Pune’s case Mumbai and Ahmedabad, a growing economic zone itself. These cities are all an integral part of the tech industry and ranked among most livable cities in the country several times.

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Message is clear and loud. The once small town of the country, is out to make a mark. They can well become India's new Silicon Valley soon. 

 

 


 

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Published December 25th, 2023 at 15:38 IST

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