Inside India’s Silicon Valley

Inside India’s Silicon Valley

India’s technology sector is on a roll. 

In 2018-19, the industry saw revenues of US$181 billion and exports totaling US$137 billion, according to the India Brand Equity Foundation. Looking ahead, revenue is predicted to reach US$350 billion by 2025, with digital accounting for 38% of that total.

Bangalore, or Bengaluru as it’s known in the local Kannada language, is the nerve centre for Indian tech companies–both for those with long histories, such as Infosys and WiPro, and startups, such as ride-sharing company Ola.  

Ben Legg, managing director of Ola’s UK arm, said Bengaluru is an exciting place for entrepreneurs–which is why he moved there from Mumbai. “While Mumbai is a bigger and richer city, startup founders needed a lot of engineers, and there’s way more in [Bengaluru],” he told Elite Business Magazine in 2019.

Ola is thriving. Founded in 2010, it has since expanded into foreign markets, including the UK and Australia, where it competes with Uber. It also has attracted $US3.8 billion in funding through 23 rounds from Indian and external investors.

“Just like Google’s, Facebook’s, or Apple’s head offices remain where the action is–which is in Silicon Valley–I expect the same with [Bengaluru],” Legg told CMO by Adobe. “With Ola being in [Bengaluru], we’re in the heart of things, and that’s the right place to be.”

Roots In Outsourcing

Bengaluru has a long history as an outsourcing centre. IT consulting giant Wipro, for example, began there in the 1980s, providing tech services to multinationals with a highly educated and motivated domestic workforce who was also much less expensive to employ than their counterparts in the U.S. or Europe.

Bengaluru’s allure for startups–earning it the reputation as India’s Silicon Valley–happened around 2014 to 2015, according to Ketan Phanse, head of information and digital technology at JetPrivilege, an India-based loyalty and rewards program that is part of the Etihad Aviation Group.

“At first, Bengaluru was focused on outsourcing, but that all began to change a few years ago with the establishment of businesses that targeted the Indian market,” Phanse told CMO by Adobe.

But the true game-changer came towards the end of 2016, as many more of the country’s population got online for the first time, he said.

“It was around then that cheap data made mobile technologies largely available, and then there was sudden growth and adoption and experimentation with new business models,” he said. “It’s happened across all business sectors, whether it’s on the food tech side, where the likes of Swiggy and Zomato are coming up, as well as on the fintech side.”

Innovation Unbound

Innovation has since taken off, accounting for the country’s vast range of operating conditions, “such as connectivity, devices, ruggedness, and price point,” said Dr Rohini Srivathsa, Microsoft India’s national technology officer. “Such innovations, both in products and services, are enabling India to accelerate its digital transformation journey across both business and government organisations.”

Many technology innovations are now coming out of India that are competitive on a global scale, Srivathsa told CMO by Adobe. These range from offerings related to theoretical computer science, such as algorithms and cryptography, to distributed-systems programming languages, machine learning, and artificial intelligence.

For example, Srivathsa pointed to Apollo Hospitals, which, working with Microsoft, has introduced the first AI-powered Cardiovascular Disease Risk Score application programming interface (API).

“This API was developed using a combination of applied AI and clinical expertise on a large sample of retrospective data on health checks and coronary events,” Srivathsa said. “Doctors across the Apollo network of hospitals can now leverage this AI-powered API to predict the risk of cardiovascular disease and drive preventive cardiac care across the entire country.”

Meanwhile, Piramal Glass, a global specialist in glass-packaging design and production, is using the Internet of Things (IoT) to transform the manufacturing process.

“Using IoT, Piramal Glass acquires data from sensors on production lines across its plants in India, Sri Lanka, and the U.S.,” Srivathsa said. “These IoT sensors are used to identify quality parameters at each stage of the production process. The data generated provides insights on line efficiencies in real time, and this has led to improved production efficiency and cost reduction.”

Impact On Emerging Markets

Where these innovations are felt strongest, however, is in the Asia-Pacific region and the BRICS nations (Brazil, Russia, India, China and South Africa), according to JetPrivilege’s Phanse. These countries are at a similar phase of development to India, he said, and can benefit from Indian technology and experience. In fact, according to the Financial Times, the BRICS nations accounted for more than 50% of global economic growth in 2017.

Gillette, a Proctor & Gamble company focused on men’s grooming is a good example of how the Indian market influences other emerging markets. The company used India as a test-bed for the development of a new razor that needed to be simple, inexpensive, and take into account the differing needs of non-Western markets.

“There’s a very common term for Indian innovation called ‘jugaad,’” Phanse said. “It’s a Hindi term, and it means being frugal.”

This frugal approach led to the development of the Gillette Guard, a low-cost razor designed to get consumers in emerging markets to switch from traditional two-bladed razors with a “T” shape. After more than 3,000 hours in development spent with consumers in over 1,000 homes, the razor was launched to wide acclaim from Indian consumers. It has since been launched in other new markets, as well.

With the growth in the technology sector in India, locations like Bengaluru are critical for the country’s continued competitiveness in Western markets and in the emerging economies of the BRICS nations.

“A hub like Bengaluru is enabling startup ecosystems and product and service innovations for cloud-first, mobile-first markets, with potential opportunity across the broader APAC region,” Microsoft’s Srivathsa said. 

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