BAN GALORE , INDIA'S "SILICON
TECHNOLOGY
VALLEY":
TRANSFER AND HIGH-TECH
LESSONS
FOR
DEVELOPMENT
by
Arvind Singhal, Ph.D.
Assistant Professor
School of Interpersonal Communication
college of Communication
Ohio university
Athens, Ohio 45 701, USA
Telephone: (614) 593-4903
Fax: (614) 593-4810
To appear in the Proceedings
agement and Entrepreneurship
rida, April.
of the College of Innovation Man(1992), ORSAjTIMS, Orlando, Flo-
.•.
1
BANGALORE,
INDIA'S "SILICON VALLEY":
TECHNOLOGY
TRANSFER AND HIGH-TECH
LESSONS
FOR
1
DEVELOPMENT
by
Arvind Singhal
Ohio University
Abstract
The present article describes and analyzes the
growth of high-tech microelectronics
industries in
Bangalore. A historical perspective on individual
"champions" of high-technology in Bangalore is
provided. Reasons for Bangalore's high-technology
growth are investigated.
The context of technology tranfer in Bangalore's R&D organizations and
private industries is analyzed.
Pros and cons of
high-tech growth in Bangalore are investigated.
Lessons learned from Bangalore about high-tech
development are presented.
Several
Third World
Taiwan,
Hong Kong,
countries
Brazil, Mexico,
ting to create an indigenous
industry.
technology
& Larsen,
industry
A high-technology
underlying
1984).
the highest
observers
is one in which
the basic
chips and their
of high technology.
claim that microelectronics
(Rogers
the part of the electronics
and telecommunications),
the industrial
microelectronics
changes very rapidly
on semiconductor
new type of "industry"
leapfrog
industry
Microelectronics,
centering
South Korea,
Egypt, and India are attemp-
high-technology
the industry
(such as in computers
sidered
such as Singapore,
applications
is usually
con-
Some enthusiastic
potentially
represents
that can allow a Third World
nation
era so as to become an information
to
a
2
(Singhal & Rogers,
society
Former
1989a).
Indian Prime Minister
to 1989, issued government
Rajiv Gandhi,
directives
may become a microelectronics
in semiconductors,
computer
asimha
tech
software.
in India.
puter
software
industry's
High-technology
revenues
galore
increased
increased
is the degree
spatially
is an emerging
in one area
technopolis,
silicon valley".
A technopolis
high-tech
complex
which
tionships
between
government,
versities,
to further
fifteen-fold,
spin-off
singhal
& Rogers,
firms
capital
boost high-
and the com-
agglomerated
of Karnataka
to which some quality
(Rogers & Chen,
often referred
is
1988). Banto as "India's
is a geographically-concentrated
private
by collaborative
firms, and research
of venture
(Smilor, Kozmetsky,
1989b).
Nar-
ten-fold.
is characterized
and by the presence
neurial
and
twenty-five-fold,
companies "in India are particularly
Agglomeration
concentrated
computers,
of Prime Minister
increased
in the South India city of Bangalore,
State.
busi-
In the eight years from 1984 to 1992
of computers
exports
of what
Under
indigenous
telecommunications,
The present government
in India, the number
computer
in India.
promoted
Rao has issued policy directives
industries
from 1984
for the beginnings
"revolution"
Rajiv Gandhi, the Indian government
nesses
who served
capital
relauni-
and entrepre-
and Gibson,
1988;
3
The purpose
of the present
the growth
of the high-tech
galore.
We provide
pions"
sons for Bangalore's
tranfer
industries
is analyzed.
in Bangalore
in Bangalore's
development
is India's
million
people
nomist,
1991, p. 70).
industries
companies,
companies
growth
in
in 1992
in Bangalore.
industries,
were located
electronics
were headquartered
of 5
(Eco-
an estimated
120,000 people,
In
of which
40
in Bangalore.
manufacturing
in Bangalore.
large, medium, and small-scale
Bangal-
electronics
registering
com-
sales
(U.S.) in 1992.
high-technology
India's
annually)
agglomerating
and assembly
While
and private
Large and small microelectronics-based
over 2,600 small-scale
of $2 billion
of
city with a population
at 8 percent
In addition,
employed
The context
R&D organizations
fastest-growing
were electronics
panies
the rea-
are presented.
are increasingly
3,000-plus
and investigate
"cham-
INDIA'S SILICON VALLEY
(increasing
ore's
in Ban-
on individual
growth.
1992, some 450 large and medium-scale
percent
industries
and lessons learned from Bangalore
BANGLAORE:
Bangalore
and analyze
Pros and cons of high-tech
are investigated
high-tech
perspective
high-technology
technology
about
microelectronics
a historical
of high-technology
Bangalore
chapter is to describe
Independence
industries grew rapidly
in Bangalore
in 1947, the roots of Bangalore's
since
high-tech
4
development
go back another
TECHNOLOGY
Tipu Sultan,
two centuries.
CHAMPIONS
IN BANGALORE
ruler of Mysore
(which became
taka in the post-Independence
era) between
"innovator"
and "technology
Anglo-Mysore
developed
Crafted
bamboo
Wars, Sultan's
military
rockets
in an 8-inch
rocket
to develop
developed
engineers
military
used
to wreak havoc
indigenouslyon the British
and range),
rockets
its pure
in England.
on a three-meter
launched
served the British
leonic Wars
an R&D program
The British rockets,
Army well
(1806), and the Anglo-American
War of 1812
German
barbed wire and other defense
tions by Allied
ground
troops.
miles
1834 and 1861, Mark Cubbon served
chief) of Mysore.
Bangalore
(then Mysore's
(Narawas
installa-
as the British
Cubbon built
of new roads and some 309 new road bridges,
Napo-
torpedo"
used to destroy
(administrative
Mysore
in the Anglo-French
sirnha, 1985). Even in World War II, the "Bangalore
sioner
and rela-
along the lines of the technologically-advanced
rockets,
Between
The
of the Mysore
iron casings,
that they
Army.
of one mile.
by the high quality
(for example,
tively high thrust
(Narasirnha, 1985). In the
rockets had a range
were so impressed
technology
1782 and 1799, was an
long iron tube and mounted
pole, the Mysore
British
buff"
the State of Karna-
Commis-
1,600
connecting
capital city) with several District
5
heaquarters
nication
(Shetty, 1984).
and transportation
ore by establishing
links between
Further, Cubbon
infrastructure
telegraph
Bangalore
In 1894, a young and progressive
the ruler of Mysore state.
a wealthy
science
372 acres of land in Bangalor
Science,
1984).
par excellence
Minister)
establish-
Mysore
of Mysore
Bangalore
Sawhney,
(in 1916),
Dewan
and vocational
industrial
many contributions
Project
the Bhadrawati
and several
training
(Prime
to Mysore
local business
engineer-
the
electrical
Iron and Steel Works
(to
and the Bank of
and commerce).
Mirza Ismail, built on Visvesvaraya's
in an even more technological
to
(Nath,
include
(to provide
estab-
centers
development
a strong base for heavy industries),
1989).
of
was an engineer-administrator
(from 1912 to 1918) visvesvarya
Hydro-Electric
(to promote
successor,
(Indian Institute
IV's reign. Appointed
(and Bangalore's)
establish
a high-quality
at no cost, eventually
fuel Mysore's
power to industries),
Tata,
IV offered
polytechnics,
1987). Visvesvaraya's
IV became
Wodeyar
ing colleges,
Krishnarajasagar
university,
of Science in 1909
of Mysore state
lished the university
Wodeyar
wanted to create
M. Visvesvaraya
in Wodeyar
rail
places.
Krishnaraja
research
ing the Indian Institute
and creating
Bangal-
In the early 1900s, when J.N.
Indian industrialist,
and engineering
the commu-
in and around
operations,
and neighboring
boosted
direction
visvesvaraya's
work to head
(Rogers &
6
In 1933, Sir C.V. Raman, India's only Nobel Prize-winning
cist, moved
from Calcutta
as the Director
whose
several decades
individual,
scientific
that Raman
they were colleagues
migrating
in 1970, in the several
found
(Venkataraman,
in the physics department
science by remaining
overseas.
Indian's
Atomic
of Raman's
(IISc).
Raman was an extraordinary
Dr. Homi Bhabha, an outstanding
serve Indian
of Science
spirit lives on in Bangalore
after his death
tific organizations
goaded
where he was appointed
of the Indian Institute
While a "controversial"
physicist,
to Bangalore,
physi-
today,
scien-
1988).
When
at IISc, Raman
theoretical
physicist,
in the country,
rather
to
than
Bhabha agreed, and went on to spearhead
Energy Program.
Dr. Vikram
at IISc, later launched
Indian Space Research
organization
India's
Sarabhai,
a protege
space program
is headquartered
(the
in Bangal-
ore) .
So Bangalore's
capital
is represented
individual
Wodeyar
Raman,
growth as India's
"champions":
scientific
in the cumulative
like Bhabha
REASONS
efforts
of its several
Tipu Sultan, Mark Cubbon,
IV, J.N. Tata, M. visvesvaraya,
and others
and technological
provides
industry:
(1) an all-year
Ismail, C.V.
and Sarabhai.
FOR BANGALORE'S
Bangalore
Mirza
Maharaja
a specialized
HIGH-TECH
GROWTH
infrastructure
salubrious
climate,
for high-tech
(2) a dust-free
7
environment,
(3) a high-quality
tary defense
position,
Indian Institute
(5) an excellent
of science,
and polytechnics,
(8) political
ments,
(9) the presence
(10) the presence
electronics
support
of venture
companies
(Singhal,
Salubrious
to as the "airconditioned
humidity
capital,
temperatures
between
icon Valley
#2. Dust-Free
dust-free,
year-round
in Northern
of buyers
Bangalore
and conducive
for
is widely-referred
experiencing
Plateau
weather
Bangalore's
mean
Located
in India's
3,200
Southern
is reminiscent
environment
to high-technology
environment,
especially
indus-
and suppliers
(Mani, 1985).
other Indian cities which are located
industries,
(13) a favorable
of sil-
California.
Environment:
have a dust-ridden
R&D centers,
from 57 F to 88 F, and a relative
46 to 75 percent
Bangalore's
undertakings,
firms and sub-
city of India",
feet above sea level on the Deccan
Peninsula,
sector
1989).
Climate:
ranging
man-
and State govern-
(11) several high-quality
and (14) the presence
#1. An All-Year
monthly
ancillary
the
colleges
and technical
from the Central
mili-
university,
engineering
of six large public
companies,
trial climate,
research
scientific
of electronics
(12) the presence
(4) a strategic
(6) several
(7) availabile
power,
contracting
of life,
in the plains
anathema
semiconductor
work.
is relatively
In contrast,
(like Delhi)
for high-technology
production.
8
#3. A High Quality-of-Life:
amenities
provide
cantonment
a high quality-of-life
educational
facilities
liteness,
which
(2.5 million)
people
climate
and other urban
for its residents.
city since the British Raj in India, Bangalore
tures excellent
ational
Bangalore's
and medical
services,
fea-
ample recre-
(like golf clubs), and a level of cosmopo-
no other Indian city can offer.
of Bangalore's
are "non-natives",
the past decade,
A
present population
migrants
several companies
Fifty percent
of 5 million
from other Indian cities.
(like Madura
Bond, and Britannia)
have moved their corporate
Bangalore,
attracted
by Bangalore's
relatively
low cost of living
In
Coats, Brooke
headquarters
high quality-of-life
(compared to other
to
and
large Indian
metros).
#4. A strategic
Military
rior of India's
Southern Peninsula,
military
high-tech
Defence position:
Located
Bangalore
in the inte-
enjoys
a strategic
defence
position,
conducive
work.
Bangalore
is far from the reach of Pakistan's
F-16 jet fighters,
and from mainland
fought two wars with Pakistan
China in 1962).
for defence-related
China in the North
in 1965 and 1971, and one with
Unlike Bombay, Calcutta,
and Madras
three other big cities) which are located on India's
Bangalore's
interior
(India
(India's
coastline,
location makes it less vulnerable
from the
sea.
#5. The Indian
Institute
of Science: An Excellent
Research
Uni-
9
versity:
The Indian
Institute
(and India's) premier
in high-technology
computer
science,
education
material
departments
dents.
Wodeyar
and centers,
shares many similarities
studies,
California
Unlike
university
especially
engineering,
engineering,
is an institution
is to conduct
in 1909
research
research
(by visionaries
of
and
(Singhal &
such as J.N.
IV), lISe in 1989 had 30 scientific
400 faculty
lISe is often referred
graduate
aeronautical
in how to conduct
1989b). Established
Tata and Maharaja
excelling
such as electrical
whose main function
students
(lISe) is Bangalore's
university,
science,
A research
to train graduate
Rogers,
research
disciplines
and biotechnology.
higher
of Science
members,
to as "India's
(for instance,
high-quality
and 1,400 stuCaltech"
and
small size, focus on
research,
etc.) with
its southern
counterpart.
the five Indian Institutes
are primarily
teaching
of Technology
institutions
(IITs), which
(modeled after MIT),
research
is a top priority
at lISe: Some 70 percent
of lISe's
students
conduct
the remaining
concentrate
on coursework.
eral thousand
Sarabhai)
institutions
and engineers,
high-technology
and alumni
Dr. Vikram
30 percent
During the past 80 years,
scientists
in Bangalore's
faculty
research;
helped
and R&D labs.
many presently
industries.
(like Dr. C.V.
lISe has trained
Raman,
Several
sev-
employed
of lISe's
Dr. Homi Bhabha, and
found many of Bangalore's
scientific
10
#6. Presence
of Engineering
Colleges
and Polytechnics:
tion to the IISc, Bangalore has eight engineering
several
polytechnics
and technical
training
colleges
institutes
than any other Indian city). The state of Karnataka,
Bangalore
is the capital, has 43 engineering
turn out 11,000 engineers
every year,
in addition
and 24 industrial training
p. 70).
In the early 1900s, Sir M. Visveswaraya,
nized
to that of Frederick Terman
the importance
polytechnics
addition,
panies
of establishing
to fuel Bangalore's
several of Bangalore's
train employees
institutes
of which
which
to 52 poly-
(Economist,
whose
in silicon Valley,
engineering
industrial
public
1991,
role was
recog-
colleges
and
"revolution".
In
and private
in in-house technical
and
(more
colleges,
technics
similar
In addi-
sector
training
com-
insti-
tutes.
#7. Availabile
Scientific
plethora
of engineering
training
institutes
and Technical
colleges,
Manpower:
polytechnics,
produce scientific
personnel
a large pool
of scien-
industries.
tists,
and skilled labor is available
galore's
scientific
companies.
institutions,
Bangalore
personnel
#8. Political
Support
Bangalore
is somewhat
locally
in Ban-
R&D labs, and high-technology
has the highest
and technical
and technical
and technical
for its high-tech
engineers,
Further,
Bangalore's
of any place
concentration
of scientific
in India.
from the Central
and State Government:
unique among other technopolis
in devel-
11
oped and developing
countries
fuelled
by Central
1989).
post-independence,
six large public
work.
and state government
sector
in this chapter),
several
boosted
Texas
India's
ment
corporation,
operations
growth
state government.
water
shortages,
companies
3M, Digital
political
high-technology
Bangalore
and economic
the State government
growth
industries.
In the mid-1980s,
Development
corporation
City, located
Located
within
Equip-
from its
faced severe
power and
banned the establishment
industries
(high-tech
in Bangalore,
industries
Microelectronics,
the Karnataka
thus
are nei-
telecommuni-
as "thrust"
State Electronics
(KEONICS) established
a 350-acre
12 miles from the Bangalore
the Electronics
high-tech
Bangalore
coddling
and software were earmarked
tronics
like
have established
capital,
In 1983, when Bangalore
computers,
sev-
Since 1984, some
Electric)
As Karnataka's
ther power nor water-intensive).
cations,
Motorola,
has boosted
of new power and water-intensive
boosting
defense
sector, attracting
(including U.S.-based
State government
tremendous
high-tech
later
(Varma, 1989).
in various ways.
receives
established
(discussed
to Bangalore.
Intel, and General
(Elhance,
liberal, pro-electronics
high-technology
Hewlett-Packard,
in Bangalore
The Karnataka
of which conduct
companies
foreign companies
Instruments,
in Bangalore
Rajiv Gandhi's
eral foreign high-tech
70-plus
initiatives
the Central government
companies
In the mid-1980s,
policies
in that its growth was primarily
City is a Software
Elec-
city center.
Technology
12
Park, a 100 percent
ties.
export-oriented
Special financial
vided to electronic
companies
incentives
companies
#9. Presence
high-tech
Industries
tronic
(manufacturer
exchanges,
Limited
repair/maintenence
ently produces
defense
(HAL)
(HMT), producer
work:
circuits),
Allied
MIG aircraft,
Limited
Companies:
of Electronics
(22), HAL
(2) Bharat
elec-
Electron-
(3) Hindustan
planes,
and pres-
(4) Hindustan
machine
Ancillary
companies
(10), and HMT
Machine
tools
Limited
and pre-
(BHEL), and
from HAL
two largest high-tech
some 17,000 people
(Bharat Electronics,
Some 130 ancillary
ITI (48), BEL
several
equipment,
(BEML), which spun-off
alone, ITI employs
BEL some 15,000 people
#10. Presence
fighter
(5) Bharat Heavy Electricals
In Bangalore
in
Bangalore
of which
contractor),
in 1964. ITI and BEL are Bangalore's
panies:
created
(1) Indian Telephone
of state-of-the-art
Earth Movers
four-
which began during World War II as a
center-for
supersonic
cision watches,
sector companies,
and integrated
Aeronautics
(6) Bharat
city increased
of telecommunications
(a government
Sales of
1990).
defense-related
ics Limited
Tools
Electronic
ameniare pro-
city.
of six Large Public Sector Undertakings:
is home to six large public
conduct
and tax concessions
1989 and 1992. Some 12,000 new jobs were
(Singhal & Rogers,
the process
with modern
in the Electronics
located in Bangalore's
fold between
venture
comand
1989).
Firms and Sub-Contracting
have been established
(50), most of which
are
by
13
agglomerated
in Bangalore
130 ancillary
companies
(Rao, 1987).
employ about 6,000 people.
tion, there exist small-scale
these public
#11. Several
concentration
tific
in India.
include
(2) the Center
designer
of state-of-the-art
VLSI
gence
and developer
and Robotics
tory
(NAL),
ment
(ERDE),
designer
chips,
supercomputers
conducts
Institute
state-of-the-art
omy and liquid crystal displays
tute of Astrophysics.
Labora-
Establish-
(8) the Aeronautical
Defence
Institute
research
(LCDs), and
(GTRE),
of light combat
(RRI), established
and
Intelli-
Aeronautical
(9) the Central Power Research
(3)
(C-DAC),
Establishment
and developer
sat-
(C-DOT),
exchanges,
and Radar Development
engines,
(ADE), designer
Organization
for Artificial
(5) the National
R&D
communication
Computing
(4) the Center
(CAIR),
of jet aircraft
which
of Advanced
of-parallel-processing
(10) the Raman Research
Raman,
major high-tech
telephone
(7) the Gas Turbine Research
(LCAs),
and scien-
of Telematics
electronic
(6) the Electronics
Establishment
crafts
Bangalore's
for Development
for Development
semiconductor
defense laboratories,
develops, and launches
ellites,
designer
has the highest
(1) the Indian Space Research
(ISRO), which designs,
the Center
from
BEL alone is served by 400 small-
R&D Centers: Bangalore
of R&D centers,
organizations
In addi-
companies.
High-Quality
institutions
these
industries with subcontracts
sector companies;
scale electronics
Taken together,
air-
(CPRI),
by Dr. C.V.
in radio
(11) Indian
astronInsti-
In addition, several privately-funded
R&D
14
centers conduct
high-tech
#12. Presence
of Venture
for high-tech
start-ups
(and in India).
growth.
until 1986, venture
capital
companies
and Investment
non-existent
is money
institutions
for high-tech
venture
capital
corporation
Company of India
galore.
several
after hardly
$13 million
located
senting a capital
capital
te-level
financial
lent of venture
Investment
Financial
another
investment
capital
Development
scale industries
and Information
of $31 million
ventures,
of TDICI.
but it is
Several
provide
sta-
the equiva-
state Industrial
(KSIIDC) and Karnataka
(KSFC) invest in large, medium,
(including
repre-
(U.S.).
in Karnataka
corporation
with
In 1990,
in Bangalore,
Karnataka
TDICI
ventures,
1989).
90 high-technology
services.
in Ban-
a year in existence,
(Venture India,
institutions
first private
its headquarters
thanks to the efforts
corporation
limited venture
Development
is a recent phenomenon
gaining momentum,
Bank, and the
(U.s.) in 40-high-technology
in Bangalore
TDICI was appraising
Venture
Technology
for
of India) and commercial
In 1988, India's
(TDICI), established
By mid-1989,
invested
start-ups.
company,
in new or
(like the Indus-
Canara Bank) began providing
capital
in Bangalore
invested
(like the state Bank of India, Grindlays
Bangalore-based
capital
with a high potential
In 1986, a few financial
trial Credit
banks
Capital:
in Bangalore.
was virtually
Venture
young high-technology
research
several high-tech
and
state
and small-
ventures)
often as
15
equity partners,
start-ups.
tronics,
and provide techno-managerial
KSIIDC
(in cooperation
support
with the Department
New Delhi) is establishing
a software
for
of Elec-
park in Bangal-
ore.
13. A Favorable
decades,
mate,
Industrial Climate:
Bangalore
has maintained
characterized
attraction
During the past several
a favorable
by relatively
low labor unrest,
for companies to locate their operations
ore. Most private
investment
in Bangalore
an indication
favorable
and economic
industrial,
political,
14. Presence
of Buyers and Suppliers:
of high-tech
products
are-numerous
number
of ancillary
boards
(PCBs) and transistors
TECHNOLOGY
exchanged
transfer
between
in Bangal-
climate.
in Bangalore.
supply
and suppliers
For example,
printed
is the process by which
innovations
and organizations
into use on the other (Rogers & Valenti,
research.
R&D organizations
Basic research
circuit
IN BANGALORE
1988).
conduct both basic
are
who are involved
in R&D on the one hand, and in putting technological
high-tech
a
to ITI and BEL.
TRANSFER
individuals
a major
of Bangalore's
Both buyers
companies regularly
cli-
(about 75 percent)
comes from outside of Karnataka,
Technology
industrial
innovations
Bangalore's
and applied
is defined as original
investigations
16
for the advancement
specific
of scientific
objective
of applying
lems. In contrast,
investigations
Rogers,
actively
technological
to the private
others are relatively
tions conduct
reluctance
consists
industry
(Singhal &
R&D organizations
(developed
in their
(like ISRO and C-DOT),
slow. Many of Bangalore's
to share technical
prob-
of scientific
problems
innovations
highly-strategic
R&D organiza-
defense work, a reason
knowhow with private
Here we investigate
the context
eral of Bangalore's
R&D organizations
discuss
learned about technology
the lessons
to practical
are the main users of basic
several of Bangalore's
transfer
laboratories)
applied research
Applied researchers
While
that do not have the
this knowledge
intended to solve practical
1989b).
research.
knowledge
of technology
industry.
transfer
and private
for their
in sev-
industry,
transfer
and
in Bangal-
ore.
ISRO: A Technology
The Indian Space Research
ore, has a spectacular
innovations
Organization,
record
Success
Story
headquartered
in transferring
to Indian industries.
was established
transferred
Transfer
in Bangal-
technological
A Technology
Transfer
Center
at ISRO in 1982, and by 1990, ISRO had
technical
know-how
private
industry,
another
150 technological
for 200 products
and technology
transfer
innovations
and processes
arrangements
were in progress
for
(Indian
to
17
Space Research
activities
technical
tries,
Organization,
are highly profitable:
know-how
earning
In 1988-89,
innovations
dollars
ware, and television
around
adhesives,
hardware
entrepreneurs
to industry
to Indian
started
ISRO has trans-
computer
1988).
new high-technology
innovations.
arrangements
spurred high-tech
created
wealth,
and led to import substitution,
large commercial
exclusively
industry.
barriers
several
communication
military
satellites
the Indian
corporation
defense
overcomes
Institute
on account
for example,
for broadcasting
of
(ISRO also
providing
and telephony) .
and Industrial
of Science's
to
the technol-
R&D organization
projects,
for Scientific
corporate
technologies
which ISRO faced earlier
non-defense
IISc's Center
Through
only a few have found
devoted to transferring
being a "strategic"
executes
jobs and
a financially-autonomous
The new autonomous
ogy transfer
have
markets.
In 1989, ISRO established
entity,
Bangal-
companies
While many of ISRO's technology-transfer
in Bangalore,
soft-
Several
one or more of ISRO's technological
activity
indus-
in high-precision
ceramics,
(Nilekani,
transfer
ISRO transferred
50 percent of its annual budget.
optics, microelectronics,
centered
ISRO's technology
worth $100 million
ferred technological
ore-based
1989).
Center
Consultancy
for Scientific
18
and Industrial
try-sponsored
Consultancy
(CSIC), established
R&D is undertaken,
and technological
developed
in IISc's
industry.
By 1991, over 2,500 projects
consultancy
ments)
labs are transferred
projects
sult with industry
retain
50 percent
Institutes
teaching
IISc's
puter
collaboration,
universities,
activities.
a somewhat
low profile
highly
selective
received
taken
(Subramanya,
staffed
people
conducted
output,
1989b).
and with weak
Through
of science,
at IISc is basic
research. Also,
in Bangalore's
CSIC,
and com-
1988).
transfer
research,
industry circles,
being
In 1988-89,
CSIC
of which only 150 were under-
Further,
CSIC is severely
activities.
of a chairman,
1984).
IISc's CSIC has maintained
industry projects:
proposals,
for its wide-ranging
comprises
center
(IITs), which are excellent
(Indian Institute
in choosing
350 project
50 per-
-labs, are available to Bangalore's
Most research
to applied
and
for the five
limit the impact of IISc's technology
as opposed
to con-
like the wind and water tunnels,
for research
factors
as a model
especially
(Singhal & Rogers,
and instrumentation
Several
arrange-
fee (the remaining
but low in research
test facilities
industries
transfer
CSIC has been proposed
of Technologies
links to industry
(ranging from one-day
of 1 workday per week,
of the consultation
for academic-industry
Indian
private
by CSIC. IISc faculty are allowed
the equivalent
cent goes to IISc).
innovations
to Bangalore's
to complete technology
were completed
in 1973, indus-
CSIC's staff
two scientific
underof four
officers,
and a
19
secretary.
taining
Ways to boost applied research
ongoing basic research),
lISe-industry
interface
at lISe while main-
and further
are currently
strengthen
the
being explored.
C-DOT: A Model R&D Organization
In 1984, Satyan "Sam" pitroda,
an overseas-returned
merly
in Chicago,
an executive
patents
at Rockwell
in telecommunications
Development
of Telematics
and New Delhi. pitroda's
the-art
telephone
tries),
and extreme
successfully
systems,
temperature
(2) a 128-line
4,000-line
equipment
and high density
developed
and 16,000-line
Bangalore
(for example,
(as comcoun-
conditions.
exchange
unitel Limited).
production
of RAXs began in a C-DOT/ITI
C-DOT
PABX
(RAX) , and (3)
exchanges
(MAXs).
operation
In 1988, C-DOT's
to Indian Telephone
plant
In
to 42 private
manufacturing
was transferred
C-DOT represents
special
for (1) electronic
technology
ore's Electronics
state-of-
in most Western
was transferred
for
in Bangalore
and low density
main automatic
several of which established
of 50
to serve India's
rural automatic
(for-
the Center
developed
and humidity
the technology
1986, C-DOT's EPABX technology
vendors,
founded
R&D organization
needs: High traffic
pared to low traffic
and holder
(C-DOT), headquartered
switching
telecommunications
equipment),
Indian
Industries,
located
RAX
and
in Bangal-
City.
an organizational
model
for Indian
in
R&D insti-
20
tutes:
Conducting
state-of-the-art
telecommunication
ernment,
dynamic
needs, functionally
leadership,
highly-motivated,
effectively
industry
Texas
R&D to meet India's
Instruments:
scientists
technological
(singhal & Rogers,
innovations
it was difficult
another
American
conglomerate
ture.
ates
drawing
software
operations
Digital,
conglomer-
attractive
of TI, accom-
by the high caliber of Indian engineers,
climate
of Bangalore, the relatively
and the favorable
high-technology.
facility
political climate
TI decided to establish
in Bangalore,
estab-
in Bangalore.
his company president to India in 1983, they were
ably impressed
power,
infrastruc-
etc.) have
When G.R. Mohan Rao, an Indian-born vice-president
panied
the world's
TI's lead, several other u.s. high-tech
Motorola,
oper-
(TI) established
specialized high-technology
(like Hewlett-Packard,
than 50
that
would establish
center in Bangalore,
to Bangalore's
Taking
lished
to imagine
in India. But in 1987, Texas Instruments
attention
Transfer
to allow more
Indian ownership),
development
to private
Technology
percent
a software
and
1989b).
In 1978, when IBM left India (for refusing
ations
structure,
and engineers,
Two-Way International
high-tech
from the gov-
a flat hierarchical
goal-oriented
transferring
autonomous
specific
and government
cheap
approval
the
brain-
in New Delhi
a software
favor-
towards
design
was secured
in
21
1985.
TI's software
ment of $5 million
Indian government
be 100 percent
in Bangalore
exchange
import
into India
puter hardware,
represents
(U.S.) and is loa-percent
requires
TI's business
export-oriented.
foreign
tional
facility
earned,
structures,
packages,
similar
in India to
of
allows TI to
sophisticated
and management
to counterparts
The
for every dollar
the Indian government
(without customs duties)
software
U.S.-owned.
operations
In return
an invest-
com-
and organiza-
in TI's Dallas
head-
quarters.
TI carries
out computer-aided-design
is linked to TI-Dallas
ware code.
by satellite,
In 1992, TI employed
from lISe, IITs, and Bangalore's
figure will rise to about-500
operations
expand
ing salary
of about $350
industry
pay equivalent
India is trading
to be a unique
transmits
the soft-
200 Indian
engineers
(mainly
engineers
TI engineers
(U.S) a month,
brainpower
international
situation
gained
in India,
Indian engineers
TI's expense,
by Indian
of what TI would
for TI's technology
a win-win
is retaining
are paid a start-
reasonable
fer, representing
TI, India
this
in the U.S.
case of two-way
a foothold
colleges);
by the year 2000 as TI's
but only about one-eight
employees
Its work
which
engineering
(Ahmad, 1992).
standards,
of VLSI circuits.
technology
at both ends.
earns
trans-
TI has
have a foothold
its talent, and getting
the Indian government
in what appears
them trained
foreign exchange,
in
at
and
22
TI's engineers
in a pleasant
in Bangalore
are happy,
learning
work environment.
illustrates
The Texas
the potential
in India, where English language
manpower,
and relatively
itive advantage
LCDs: Unsuccessful
Bangalore's
technology
R&D institutes
occur. One such failure
attempt to transfer
RRI lab in Bangalore.
transfer
and private
industry,
out between
many failures
While Japanese
heels
knowhow
to BEL, which
types of
LCD watches,
potential
of RRI's technology.
(LCD) technology
Electronics.
the LCD technology
and U.S. scientists
in developing
of the LCD technology
displaying
in his
were
LCDs, con~er-
(in pocket
calculators,
P~I transferred
in turn produced
the tremendous
For five years,
with the central government
several
its
proto-
commercial
1976 to 1981,
to approve
plant, but the New Delhi bureaucrats
Meanwhile,
compet-
Transfer
carried
to Bharat
perfected
technical
respond.
Technology
etc.) was yet to begin worldwide.
manufacturing
a strong
market.
Institute
close on Dr. Chandrashekar's
BEL pleaded
trained
(which proved to be a costly one) was an
In 1975, Dr. Chandrashekar
watches,
provide
operation
development
technically
the liquid crystal display
from the Raman Research
cial exploitation
of software
lower salaries
VLSI design
Instruments
ability,
in the worldwide
For every successful
state-of-the-art
a large LCD
did not
Japan and the U.s. were quick to cornrner-
23
cialize
LCDs, reaping
sales a year.
nology
pletely
RRI.
In 1984, the Indian government
transfer
conductors
arrangement
Complex
On numerous
technical
between Hitachi
Limited
overriding
disregarded
several billion dollars'
indigenously
developed
focusing
Development
computers,
Gorbis,
interest
Krishna,
in boosting
ore was sharpened
mented
inputs
during
two technology
(Program
tal company),
to strengthen
industries,
industries
especially
as microelectronics,
Puri, and Waldhorn,
programs
of Commercial
for the Accelaration
state government,
industries,
(Gol-
1988).
industries
in India:
U.S.
in Bangalimple-
(1) PACT
Technology),
of Commercial
R&D institutes,
and private
the
software, and biotechnology
development
Bangalore's
Agency for Inter-
1987-88, when they successfully
from the Karnataka
of Science,
Transfer
high-technology
(Program for the Advancement
PACER
Development:
has initiated programs
on such high-technology
telecommunications,
AID's
Technology
R&D needs of Bangalore's
lub, Hansen,
at
state-of-the-art
the New Delhi office of the u.S.
market-driven
which existed
falling prey to a "West is best" mentality.
Integrated
national
LCDs, com-
New Delhi has completely
u.S. AID's Center for Technology
Since 1987,
a tech-
of Japan and Semi-
LCD knowhow
other occasions,
knowhow,
approved
(in India) to produce
the indigenous
India's
worth of LCD
and
Energy).
(2)
with
the Indian Institute
TDICI
(the venture
capi-
u.S. AID is establishing
a
24
Center for Technology
Development
ten technology
transfer
the subsequent
commercialization
(Arthur D. Little,
development
center,
players
selection,
nology transfer,
activities
capital
(2) technology
and
innovations
research
(R&D institutes,
and venture
to strengh-
and industry,
of technological
CTD will coordinate
industry,
(1) technology
R&D centers
Inc., 1987). As an applied
ore's major high-tech
ment, private
between
(CTD) in Bangalore
and
of Bangal-
the state govern-
firms),
helping
development,
with
(3) tech-
and (4) technology
commercialization
initia-
lessons can be learned
about technology
transfer
tives.
What general
from the case of ISRO, IISc, C-DOT,
and
u.s.
AID's Center for Technology
#1. R&D institutes
profits
(through
technological
innovations
industry.
#2. R&D institutes,
which conduct
(and have "classified"
transfer
RRI-BEL,
Development?
can earn considerable
license fees, etc.) by transferring
private
Texas Instruments,
security
of their non-military
commercialization)
mous technology
#3. Technology
to private
transfer
transfer
high-tech
status),
research
can facilitate
technological
industry
defense
innovations
by establishing
the
(for
autono-
corporations.
can be facilitated
through
sharing
of
to
2S
R&D facilities,
people-exchanges,
as illustrated
by the activities
and Industrial
Consultancy.
and through
expert
of IISc's Center
for Scientific
#4. R&D institutes
need to find a balance between
applied
C-DOT conducts basic and applied
research.
telecommunication
model
technology,
representing
consultion,
basic and
research
in
one organizational
for Indian R&D institutes.
#5. Foreign-based
technical
brought
expatriates
expertise.
can bring home both capital
For example, Sam pitroda's
home not just the individual,
telecommunications
technology,
return
and
to India
but also state-of-the-art
which pitroda had helped
develop
in the u.S.
#6. Advances
in communication
availability
of a dedicated
in the case of Texas
distance
anathema
Instruments),
lead-time
innovation
transfer
available
to commercially
bureaucracy
especially
products.
can be
when the
exploit a technological
is small.
#8. Indigenous
technology
development
(as
the cost of
of information
transfer efforts,
the
for data transfer
largely removes
inefficient government
for technology
for example,
satellite-link
in the international
#7. An apathetic,
technology,
and technology
transfer
arrangements
National
weigh
compete
with the importing
governments
and private
#9.
industries
the pros and cons of developing
sus the option of importing
Synergy between
government
firms,
and entrepreneurs)
nology.
Center
agencies,
An umbrella
for Technology
coordinator
industry,
is important
tions,
computers,
GROWTH
industries
hence,
taxes),
economic
about
(2) provide
growth
40 percent
or individual's
economic
Bangalore
annually),
productivity
benefits
can help
new jobs,
(Bangalore's
process.
in Bangalore
has sev-
of microelectroin telecommunica-
(1) create wealth
(and
(3) create a high rate of
electronics
and
of tech-
IN BANGALORE
(and their applications
and software)
capital
can serve as a
transfer
eral pros and cons. The design and production
industries
venture
in Bangalore
PROS AND CONS OF HIGH-TECH
nic-based
(R&D insti-
in transferring
in the technology
The growth of high-technology
ver-
like the U.S. AID-sponsored
Development
and catalyst
technology
foreign technology.
organizations
private
organization
need to carefully
indigenous
ready-made
participating
tutes,
of foreign technology.
industry
is growing
at
(4) increase an organization's
and efficiency.
However,
these
come at a high price.
is Asia's
fastest-growing
cern to its city planners
city, a cause of much con-
and municipal
officials.
Bangalore's
27
population
is estimated
seven million
Bangalore's
by 2000. During the same years
urban land area will increase
to 300 square miles.
already-burdened
other municipal
housing
services.
vagale
bleak future for Bangalore's
shortage
supply,
(3) overburdened
inadequate
housing
of water,
(1992 to 2000),
of schools,
civic
services:
(2) an irregular
and
and
and
foresees
a
(1) A tre-
and inadequate
public transportation
an
hospitals,
state government,
solid waste disposal program,
miles
about overburdening
(1987), a city planner
to the Karnataka
mendous
in 1992, to
from 225 square
city planners worry
civic infrastructure
consultant
rather
to grow from five million
services,
power
(4) an
(5) an overwhelming
crunch.
High-technology
widening
growth
(coupled with other
socio-economic
inequality
percent
of Bangalore's
stitute
the lower socio-economic
slums
(13 percent)
About
27 percent
5
who con-
live either
units
in urban
(50 percent).
reasonably-paid,
and highly-motivated
Highly-paid
engineers,
and entrepreneurs,
10 percent
professionals,
individuals
whose
is
sixty-three
make up the middle-
Bangalore:
or Japan.
growth)
population
The remaining
that of well-to-do
class,
or in one-room housing
class of highly-educated,
individuals.
in Bangalore.
million people,
of Bangalore's
industrial
are the super-elites
managers,
lifestyle
of
scientists,
is very
in the U.S., the united
similar
to
Kingdom,
28
LESSONS LEARNED
#1. Several
"champions"
high-technology
ABOUT HIGH-TECH
DEVELOPMENT
in a nation must become interested
development,
in
and put the weight of their posi-
tion behind
the idea, for the idea to be carried into action.
Bangalore's
growth as India's scientific
tal is represented
individual
Wodeyar
Raman,
in the cumulative
"champions":
and technological
efforts of its several
Tipu Sultan, Mark Cubbon, Maharaja
IV, J.N. Tata, M. Visvesvaraya,
Mirza Ismail, C.V.
and others like Bhabha and Sarabhai.
sustained
committment
#2. High-tech
location
is required
development
because
tiatives
The healthy
university,
availabile
For example,
of high-technology
climate,
life, strategic
pre-existing
dust-free
military
large public
manpower,
#3. Technology
is important
spatial
of the loca-
and private
a number of factors
industries
in Bangalore:
high-quality
an excellent
of
research
and polytechnics,
political
support, presence
and electronics
of venture
ini-
led to
colleges
sector undertakings
climate,
attributes
defence position,
firms, R&D centers, the presence
industrial
in a specific
environment,
several engineering
technical
a technopolis.
of favorable government
in that area.
the agglomeration
Also, many years of
in creating
usually occurs
of certain
tion, and also because
capi-
of
ancillary
capital,
a favorable
and local buyers and suppliers.
transfer
in boosting
between R&D centers and private
high-technology
industries.
industry
Synergy
29
between R&D institutes,
venture
capital
effects
effects.
development
effects and minimize
the potentially
posal,
between
Serious
transporation
shortage
facilities,
a housing crunch,
is to maximize
harmful
industries
in Ban-
and new jobs. But such economic
growth comes at a price for Bangalore's
residents:
and negative
The role of the government
For example, the growth of high-tech
5 million
industry,
is plays an important
leads to both positive
galore creates taxable wealth
burdened
private
development.
in a society.
the positive
agencies,
firms, and entrepreneurs
role in high-tech
#4. High-tech
government
industries
of water
inadequate
and increased
and
and power,
solid waste
socio-economic
overdis-
inequality
the rich and the poor.
As high-tech
microelectronics-based
ores' high-tech
industries,
India's best-known
technologies
Bangalore
technopolis.
moves
Where will
fuel Bangal-
toward becoming
it all end?
NOTES
1. The present chapter is based on the author's several lengthy
research visits to Bangalore to analyze the growth of hightechnology industries. Interviews were conducted with 70 officials involved in Bangalore's high-tech development,
including
officials from the Central and state government, academic institutions, R&D institutes, private industry, financial institutions (venture capital firms), and electronics entrepreneurs.
The present paper draws upon singhal (1989), singhal, Rogers,
Sawhney, and Gibson (1990), and singhal & Rogers (1989b).
30
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