Bengaluru’s 25-year journey from humble beginnings to an IT hub

Under ‘Beyond Bangalore’ initiative, Karnataka is now developing tech clusters in many tier-2 and 3 cities: B.V. Naidu

November 15, 2022 11:12 pm | Updated November 16, 2022 07:19 pm IST

The  Software Parks of India, Bangalore, facility at Electronics City in 1991.

The  Software Parks of India, Bangalore, facility at Electronics City in 1991. | Photo Credit: Special Arrangement

It was in the year 1998, when Bengaluru had shed its sobriquets such as “Garden City” and Pensioners’ Paradise” and came to be better known for its IT industries and BPOs, that the State came to have the annual exposition Bangalore IT.Com. The event may have played a key role in proclaiming its IT prowess to the world.

The event, now rechristened the Bengaluru Tech Summit, has turned 25.

Karnataka’s tech business had a humble beginning. In 1991-92, its software exports were a mere ₹16 crore contributed by 13 companies, employing less than 2,000 people. A year later, it was ₹22 crore and in 1993-94 the State’s software exports were ₹56 crore. Within the next five years, in 1999, the State’s software exports crossed ₹3,500 crore. And, since then, there was no looking back and in 2022 State’s over 1,400 IT firms that employ over 4 million people exported software worth ₹6,30,000 crore, close to 40% of the country’s total exports.

“No one imagined something that begun in such a modest way would emerge as a gigantic industry that changed everything not only for Bengaluru and Karnataka but also for the entire country and for the whole world as well to an extent,’‘ said B.V. Naidu, the first director of Software Parks of India (STPI-Bangalore) in 1991. He anchored the very first edition of Bangalore IT.Com in 1998, which got its new name in 2008.

Many phases

According to him, the last 30 years of the history of the IT industry in Bengaluru has seen different phases.

Growth between 1992 and 2000 was mostly through outsourcing of services on a time and material basis, but instead of predominantly onsitem many of the projects started moving offshore. The Y2K problem was a boon to the growth of the offshore industry. Quantum tech growth happened under Software Technology Park Scheme and the opening of the telecom sector and the expansion of dedicated communication infrastructure set up by the Department of Electronics for Software Export companies came as a real facilitator. Karnataka had its maiden IT policy in 1997 and also started an IT Department.

Between 2001 and 2010, the State’s software exports grew from ₹6,500 crore to ₹90,000 crore. During this period, the offshore model matured and it started getting better acceptance in the West, said Mr. Naidu. This period attracted many IT MNCs, Fortune 500 companies, Semicon Design houses, as well as financial sector backend processing etc. to Bengaluru.

“I would call 2001 and 2010 the golden period for Indian IT as most of the world started recognising us in these years as we started developing advanced global delivery systems to cater to the requirements of global markets,’‘ Mr. Naidu recalled.

Phase of expansion

From 2011 to now, it has been expansion of the industry, and the emergence of the start-up economy. Bengaluru currently has a very balanced ecosystem with IT/BPM/GCC Industry, Engineering services, ESDM Industry as well start-up and innovation and venture capital firms.

Unable to accommodate any more growth in the city, the State government is currently in the process of expanding the tech-driven industries across the State through Karnataka Digital Economy Mission (KDEM), a PPP outfit. “Under its ‘Beyond Bangalore’ initiative, Karnataka is now developing tech clusters in many tier-2 and 3 cities including Mysuru, Hubballi/Dharwad, Belagavi, and Mangaluru,’‘ added Mr. Naidu, who is chairman of KDEM.

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