The Indian Economy Blog

September 24, 2005

Finding ITs political feet

Filed under: Business,Infrastructure,Outsourcing,Politics — Nitin @ 5:03 am

Corporate Bangalore must sustain the political pressure

It took a group of Bangalore’s knowledge economy CEOs to threaten a boycott of the Karnataka government’s IT trade show for Dharam Singh’s government to finally sit up and acknowledge that it was, after all, committed to improving Bangalore’s outdated infrastructure. The IT industry leaders, headed by no less a person that Infosys’ Narayana Murthy, made conciliatory noises and confirmed that they too were, after all, committed to participating in, a ‘trade show’ for the entire joint family where corporate types in smart suits jostle their way through a sea of students, teachers, job-seekers, politicians, policemen and other individuals who only at count as trade visitors — an indication, perhaps, of how deeply the IT industry has penetrated Bangalore society. But this is not a post about IT trade shows.

It is a post about how readily — after finally having taken on a government that seemed to do its best to undermine Bangalore’s economic growth — the captains of Bangalore’s IT industry called a truce with the government. If their intention was to make a point, then they have secured a tactical victory. Brinkmanship at the eleventh hour was sure to elicit some accomodating noises from Karnataka’s politicians. But the matters the industry raised, weighty ones involving not just improving Bangalore’s airport and roads but also bringing the city’s infrastructure in line with those of its global competitors, can hardly be solved by the weekly meetings that the chief minister promised he would chair. Bringing back the ‘public-private partnerships’, best represented by the Bangalore Action Task Force (BATF), will help. But as the experience with BATF showed, a resolutely antipathetic government can click the undo button rather too easily and there’s little the industry can do about it, until perhaps, another comes along. But the same tactic may not work the next time.

Despite the IT industry’s size and contribution to the economy of several of Karnataka’s urban centres, it has relatively little influence in the state’s political calculus. The immediate explanation for this puts the blame on India’s electoral system. But the other explanation is that having achieved international success largely in spite of the state and central governments, India’s IT industry has preferred to keep politics and politicians at an arms length. But now, to sustain its global edge, the IT industry needs to add its note to the India’s political orchestra (well, okay, cacophony).

Of course, the crude way to do this is to back parties and politicians who champion its cause. But a more sophisticated approach is to also fund institutes, policy think-tanks and industry organisations that can advocate and articulate industry interests. They must get their op-eds in the regional language press and their talking heads on local TV channels. India’s IT industry has shown time and again that it is immensely capable of moving ‘up the value chain’. It needs to do the same with its politics.


  1. The IT industry shouldn’t even bother with this kind of stuff. They should just stick to displaying their clout using economic means. Relocate to a more investor-friendly city. The NCR would suit them just fine. New Delhi has been dealing with barbarian hordes for thousands of years, what’s a few more IT people!

    Comment by TTG — September 26, 2005 @ 1:18 am

  2. “The IT industry shouldn’t even bother with this kind of stuff. They should just stick to displaying their clout using economic means. Relocate to a more investor-friendly city.” – TTG

    Unfortunately, there’s significant switching costs, esp for larger firms and those doing high-end work. Moving human capital isn’t easy, when you’re talking about large numbers or some specialized expertise.

    Having said that, I don’t see Nitin and TTG’s suggestion as being mutually exclusive. Both options ie, Voice and Exit, can and should be used. See this

    Comment by Prashant Kothari — September 26, 2005 @ 3:45 am

  3. I think the problem is that the government thinks that flyovers are
    the solution. They are not. The solutions are, imo:

    * Improve and develop roads *leading* upto main roads, so that
    traffic is spread evenly.
    * Improve public transport. I landed up at Bangalore this morning by
    train and took the public bus transport to get home, essentially to
    avoid a 6 am fight with auto rickshaw drivers out to loot me. The
    jolly ride took nearly an hour to cover a distance of 15 km. It cost
    me nearly Rs. 10. I did not get a seat. I really
    think the charge was over the top.

    While the switching costs of moving out of Bangalore are high, there
    will be significant benefits to metros bursting at the seams as well
    as to smaller cities. The example I provide is perhaps an isolated
    one, but Silicon Valley, as in the one in Kahleefohrnia, isn’t made
    up of just one metropolis. Towns like Sunnyvale,
    Mountain View, Palo Alto, Milpitas, San Jose etc. have all got tech
    companies functioning out of great looking buildings.

    Comment by S Jagadish — September 26, 2005 @ 8:38 am

  4. In this tussel between IT and politicians, Politicians won, because they made lot of sound (demanding preferential treatment to locals, asking whether IT sympathizes with the local issues like flooding in N.Karnataka). With their seemingly tough stand, I am sure they might have scored some points with their vote bank. In response, IT kind of went into a meeting where govt showed them the old slides about improving the infrastrcture and came out agreeing to participate in fair. Finally, no one gained anything; IT flat out said that they will not do any preferential treatment for locals (which is right) and they said they’ll do something for N.Karnataka (nothing happened so far). Ironically Politicians throwing mud at IT questioning what is the use of IT at the same time trying to get them to attend a fair to attract IT investment/prospects? No one called that bluff!!
    In a way, it is good, quite frankly Bangalore does not need any more industries, it has it’s hands full. I feel that IT should look in the mirror, it has not been proactive in the local issues. It just has in your face attitude, they cannot think that their money (or $$) will buy everything for them. They got to build some political capital by making sure that they integrate in to local atmosphere well. The money IT is pouring into Bangalore is making the cultural changes which will ofcourse alienate the locals. I also feel that there is lot of nepotism based on region, language etc even in pvt industries (once you get in, bring your own people to enhance your power). I guess IT can show respect to local issues and at least show up as more friendly to local culture and people.

    Comment by Sanjath — September 26, 2005 @ 9:16 pm

  5. Sanjah,
    You said, “I guess IT can show respect to local issues and at least show up as more friendly to local culture and people.” Good point. As I work in Silicon Valley (Cupertino for Symantec), your points resonate with me. “If you build it, they will come.” It takes time for this kind of investment to pay off but payoff it will. Patience is required here.

    That’s my .02 cents worth.


    Comment by Glenn Reschke — September 22, 2006 @ 7:21 am

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