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A Tale of Two Silicon Valleys

Not so long ago Bangalore was considered a pensioner's town. Known as The Garden City its streets are lined with enormous shady trees and large, semi-quiet public parks. The climate is significantly more temperate than other cities, which can't be undervalued in India. But pensioners weren't the only ones with an eye on Bangalore. The state of Karnataka was producing talented engineers in great quantities, and it made American information technology firms wanting to establish a presence in India opt for Bangalore. It wasn't long before this convergence enabled Bangalore to become the defacto capital of India's own nascent Silicon Valley. A pensioner nowadays might rightly be disoriented to see a downtown billboard screaming, "WARREN BUFFET(sic) SHOWS INTEREST IN INDIAN IT STOCKS."

As Bangalore's reputation for quality engineers grew, it was only a matter of time before they made their way to the nearly polar opposite of the globe to feed California's insatiable appetite for workers with prized technical skills. Many companies prospered as a direct result of Bangalore's engineering prowess. Its indelible stamp on Silicon Valley's tech machine coupled with their entrepreneurial contributions to the emerging local scene put Bangalore on the map for good.

As might be expected, Bangalore is the most cosmopolitan city I have seen in India. This can be quantified by the number of Western restaurants or perhaps by the number of women forsaking saris for shirts and pants. The area around Mahatma Gandhi Road is unlike anywhere else in India as a busy hive of conspicuous, gluttonous consumption with plenty of outlets for the nouveau riche to blow/flaunt their wealth.

There are other clues that this is a different kind of place. Second hand bookstores in most cities have a preponderance of musty, dog-eared Agatha Christie novels, but shrink-wrapped, hardback Bill Gates is the preferred author here. Also, I hear people on the street curse at each other in an American-influenced fashion that has thankfully not caught on with the rest of the nation.

If there was ever any question of the relationship between the two Silicon Valleys it was evident when I picked up the Bangalore edition of India's most readable daily newspaper, The Times of India. At the top of the front page above the masthead it reads: "email all of your friends in Redwood City to access the times of India on" The next day it was Menlo Park, then Santa Clara.

The Times of India loves to make fun of the clueless, tech-illiterate government ministers that run Karnataka with stories such as how all but one don't have email addresses and a third aren't even using computers at work. They also never miss a chance to tout their online search engine against Yahoo's, sometimes with a faint nationalistic bent. Once they had a gloating front page story about how its technology is superior, though the irony is that it's powered by Google, a venture of two Stanford University graduates.

The H-1B

For those Bangaloreans looking to flex their tech muscle abroad, the path to riches for many runs through the unsexy name of H-1B. It is the type of visa most Indian nationals get when they go work in America. The H-1B visa only lets you work temporarily for the one company that sponsors you. If you no longer work for that one company for any reason, the visa is void. The rules would seemingly invite abuse from the employer but the US Congress is more intent on finding an acceptable number of visas than messing with its details. The restrictions have made no dent in the demand of Indians wanting to work in America. Even though the number of H-1B visas is finite, there seems to be a sense that if you make the right contacts and bide your time, eventually you will go. As Indians make up more than half of the H-1B quota, proposed changes to it are bigger news here than in America. In fact, any H-1B rumors and innuendo emanating from the public debate about the system in America is dutifully reported since so many aspirations hang on it.

The chance to work in America and make the big money is a powerful lure, so much so that it's hard to keep people here for Bangalore's own high tech industries. As I heard it from one recruiter about software specialists, "We can offer 70,000 rupees plus perks, but after all the taxes it's not so much, and still they can make twice the money in America." 70,000 rupees a month is about US $1600, a stratospheric sum in India. If you want to measure it one way, The Times of India costs US$.04 cents, a massive all-you-can-eat lunch is less than a dollar, and the fine for jaywalking in Bangalore is US$1.20. This depleting supply of labor for local jobs is causing companies to lower their standards.

While money is unquestionably the biggest factor for the exodus to the US, opportunity in the broader sense is the reason. America is still regarded as the land where dreams are realized. One Indian professional told me, "If (Hotmail founder and Bangalorean) Sabeer Bhatia had stayed here, Hotmail would never have got off the ground and he'd be just another guy in the crowd.

I wonder how you are going to keep them on the farm once they've seen the big city, but going against the grain are a new breed of Indians that have made their mark in California and are now coming back to embark on ventures closer to home. Even with their connections to tap into some of the best and the brightest minds from the top universities, they might find the search for personnel to be an unexpected dilemma.

Bangalore appears to be approaching a crossroads, a victim of its own success. It suffers the beginning of a brain drain which is exacerbated by a shortage of qualified people coming out of school. There is no longer thought to be a limitless supply of capable graduates. Now copycat neighboring states are getting into the act, striving for a piece of the pie. Even tech backwater Gujarat, looking for any edge, is touting its "connectivity" (bandwidth) to attract business. The newcomer to make the biggest splash is the city of Hyderabad (or "Cyberbad", as it wishes to be known) in the adjoining state of Andhra Pradesh. The present buzz on Hyderabad as the next hotspot is deafening. The ultimate validation that it has "arrived" might have just occurred, for it was quite a coup to get President Clinton to visit when he made his recent tour of India. Many Bangaloreans, however, look dimly at this party crasher, regarding it as full of get-rich-quick frauds.

The other states are needed if India is going to grow as a collective whole as opposed to islands of prosperity and progress. The governments are pursuing a smart, two-pronged approach of establishing accredited technical training colleges and providing incentives for foreign companies to open shop here. The latter has a trickle-down effect that helps incubate local industry. Undermining these efforts are new, private IT schools sprouting up like weeds, many of dubious quality, and for many Indians IT is seen only as a stepping stone to a ticket to the gold rush of America. Nevertheless, India has to educate and utilize its manpower of a billion people to sustain what it has built.

Despite these issues, Bangalore's importance as the technology hub of India endures. When I was in town a high-level German delegation was also there scouring for talent. The German government realized that it can't start its own Silicon Valley in the short run as it has a lack of locals with relevant skills, so it has just granted 20,000 work permits to IT experts.

Expect the number of people on the street cursing in German to grow.

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