The Indian IT City Bangalore is becoming a showcase of economic globalization. But the post-Silocon Valley urban model is overshadowed by social fragmentation.
Recently the news agency Reuters transferred 600 jobs from the meadows of rural England to the bustling Indian IT metropolis Bangalore. Compiling company data, an activity which accounts for 90 % of Reuters' income, will in the future be done in the capital of Karnataka state, where young workers will process the information that is distributed to 327.000 decision makers across the globe. It's a cost-cutting model that works: soon, the images department will be moved to Singapore.
Like thousands of banks, insurances, airlines, retailers, and biotech companies, Reuters is outsourcing business processes to places to Asia. Bangaloring has become synonymous with shifting jobs to locations where wages are low, workers are disciplined and skilled, and governments willingly provide incentives such as subsidized land, tax exemptions, technology park schemes, infrastructure, and classy leisure facilities for the high end of the labor force. While in Europe and America outsourcing has become the war cry of neoliberal economic policies, and a verb that inspires fears of job loss, the Bangalore-based software giant Infosys hired 10,000 employees in just nine months in 2004, selected out of a total of 1,1 million applications. No wonder many places across the South are trying to become like Bangalore. Increasingly, bangaloring is a concept that describes the building of information cities.
The drive for locations to generate surplus is an inherent feature of capitalist economies, from the medieval market town to the industrial metropolis of the 20th century. The rise of the services sector brought business into the city centers, where tightly wired office infrastructures developed behind historical building fronts, often forcing residents into suburban areas. Centralizing services and globally distributing production – this has been the function of the postmodern “global city” described by Saskia Sassen: a city detached from the local, and instead forming part of a global network of capital and information flows.
The information city is different: it has its precedent in California's Silicon Valley, not in the bourgeois structures of Paris, New York London. Silicon Valley is “quintessential image of the information society”, according to historian James Heitzman, who has studied Bangalore in depth in his book “Network City”. The network city follows the earlier models of the “world city” and the global city, and is a “result of the “triumphal march of private enterprise” in the process of economic globalization.
When a company with the employment levels of Infosys requests 300 acres of land for a new campus in Bangalore, land policies seem a foregone conclusion. 200 of the 500 largest American companies have their software produced by Infosys. The political clout is formidable, and its orientation is clear. “Only because Indian socialism was forced to retreat could the IT industry flourish the way it did", stated the Infosys CEO during a visit last month of Austria's President Fischer, a Social Democrat.
But Bangalore, whose population is expected to reach 8 million around 2010, is running into infrastructural problems that make the IT business look for alternative locations, increasing the pressure on local politics and on the people. Many are being driven into slums: between 1991 and 1999, Bangalore's slums grew from 444 with a population of 1.12 million to 763 with a population of 2.2 million, writes Anita Gurumurthy. And according to Christoph Dittrich, a geographer at Freiburg University, Germany, “Bangalore is becoming a multiple fragmented city, where both social and geographical barriers are reinforced”. Moreover, “gross deficiencies in infrastructure and public services have already created a sense of disappointment among the IT sector”. Outside of the subsidized IT parks, water is scarce and contaminated, electricity supply unreliable, and traffic congested. Every day 800 vehicles are newly registered. The metro rail, the new international airport, improved water infrastructure – these are infrastructure projects as yet without funding.
Not surprisingly, Infosys has also acquired 50 acres of land for a new campus in neighboring communist-ruled Kerala, where socialism apparently finds ways of accommodating even corporations that are triumphant about beating communism. Kerala state is attracting the industry with still lower costs, and rents about 60 % below those of other Indian states. The same can be said of Tamil Nadu State: according to one state official quoted by the BBC, “IT companies have begun to realize that Bangalore has reached a plateau and Chennai (Tamil Nadu) offers a better option". The cities of Hyderabad and Pune (Maharasthra) are also among the aspiring IT centers.
While Bangalore may be losing its “IT crown”, the glitter of venture capital, IT parks and surging employment has been attracting a steady flow of foreign visitors eager to adapt the model of the information city and cream off its benefits. While a colorful mix of statesmen ranging from Vladimir Putin to Prince Philipp of Beligium are taking their business delegations to Karnataka in search for investment opportunities, representatives from southern nations are keen to learn from the Indian experience for their own information city projects. Recent visitors include leading politicians from Venezuela, Algeria, China, Singapore, Nigeria, and many others.
“For apologists of the globalization project, the city represents one particularly positive showcase for the new opportunities of the Newly Industrializing Countries to profit from recent trends in economic globalization”, according Christoph Dittrich. The miracle of the information city seems so appealing that one nation has decided to transform its entire territory into an information city: by 2010, the Korean government plans to cover the nation with a seamless ubiquitous computing network.
“Die Datensammler von Bangalore” by John F. Jungclaussen
Official website of the Department of IT and Biotechnology, Government of Karnataka
Software Technology Parks of India, Bangalore
Unpacking the Knowledge Economy – Whither Knowledge Society? Posting by Anita Gurumurthy
Megacities Task Force (International Geographical Union)
“City craves for infrastructure overhaul”, by Shubha Narayanan
“India's Infosys plans new campus”, BBC News
James Heitzmann: Network City. Planning the information society in Bangalore. Delhi, Oxford University Press 2004
Saskia Sassen:The Global City. New York, Princeton University Press 2001