9 December 2010

Bangalore: silicon (v)alley?

About Hugo Messer

Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.

5 thoughts on “Bangalore: silicon (v)alley?
  1. Hi,
    it has never been and will be the “second silicon valley” except some industry “titans” say so. here “silicon valley” means a place where cutting edge /product related original , gamechanging innovations emanates constantly. cost differences tend to dissappear and thats inevitable as source of conuinuous talent supply is yet to be identified . other countries dont have reliable output. outsourcing happens because of ridiculously high developers’s remuneration in “developed” countries and ageing population. unless there is no solution for that , nothing can stop outsourcing . costfactor is one of the concern. see AT kearney global skills report.
    regards
    vinodhsen

  2. Hugo,

    In regard to “the prediction that I frequently hear in our industry: in 15-20 years the cost differences between India and the Western countries will disappear,” I will say this is incorrect.

    What is correct is that the process towards this is already well begun.

    In the emerging global workplace (for some industries, at least), there is/will be no reason at all for anyone to pay one worker any more than any other, just because the one is better located, personally, than the other.

  3. I agree with Shankar. The process is indeed already in play. Indian wages are uncontrollably rising, fueled by strong demand and a limited number of experienced professionals. Wages in the US are concurrently falling because of the shrinking job market. Soon the twain shall meet.

  4. Hi Hugo,

    Nice to connect again.

    The Off shoring and BPO Industry is already contributing close to 5% of India’s GDP currently and this is slated to rise in the coming years. Close to 2.2million people are direct employees of this sector in India with around 40% + in Bangalore itself.

    Will this go on, absolutely… will the price advantage of Bangalore continue, well maybe more Yes than No. The India Industry Captains are very committed to make this happen consistently over the next many years. Even in 2010, industry estimates the cost advantage to continue with the emergence of Tier 2 cities of India on the BPO maps. Quite a few captives now have offices in tier 2 cities as well. With India churning out over 3.5 million Graduates from colleges and universities every year, the talent pool is tremendous in all parts of the country and India is truly shining.

    What is also changing for Bangalore is the depth and the breadth of the service offerings and almost anything can be done out of Bangalore now. In fact, many Bangaloreans are now engaged in seeding global BPOs and are experts who go into the Makati Cities of the world to start a BPO!

    So, Bangalore or not, the India story seems to be intact at this time. Bangaloreans too have seen the city grow in leaps and bounds from 2000-01 when the first BPOs set up shop. It has only been 10+ years since; give it some time….10 years is a very miniscule time period on any scale. What makes the India story more profound is that the USD is still 45 times to INR and this is not going anywhere for a long time to come.

    As for Bangalore, every city has an underbelly, but for Bangalore those realities are changing fast and the city is developing at a very rapid pace and who knows, maybe the whole of Bangalore will be like Silicon Valley sooner than later. The ability to have sailed through the worst recessions periods with hardly any job losses in Bangalore and greater focus on cost and operational efficiencies also make the story very tenable. To top it all we are gritty people, Hugo and will continue to make this happen.

    Regards,

    Amit

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