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Published on September 4, 2007

With traffic congestion that could easily put Bangkok to shame and sprawling residential and commercial quarters, this city of six million appears more like a typical third-world capital than the headquarters of a surging technology industry.

To witness India's rise as the world's biggest outsourcing and information technology centre, one has to be transported through the crawling traffic along potholed roads, passing through a labyrinth of ramshackle residences and modern high-rises, into what looks like another world. This is a world where a new breed of engineer and technician works. And these workers have turned Bangalore into India's Silicon Valley.

It is in the so-called "Electronics City", a mere 15 kilometres from downtown Bangalore - but a 90-minute drive - that the true meaning of India as a hi-tech centre began to dawn on the visiting Thai delegation of software and IT vendors and experts.  Most of the delegates were making their first trip to India in the hope of learning from the experience of the new hi-tech tiger and exploring possible business opportunities.

The trip was organised jointly by the Software Industry Promotion Agency (Sipa), a leader in Thailand's software development, and The Nation Group. For many of the 80 plus delegates, the visit to Electronics City in Bangalore and the hi-tech park in neighbouring Chennai were exciting eye-openers. They were both awed and inspired by what they saw. Armies of engineers design and churn out computer chips and software programs for the world's top-brand electronics producers. There is a factory-like atmosphere as Indians work on back-office operations for multinational companies thousands of miles away, or work their computer screens producing animation and virtual effects for Hollywood movie post-production.

This is how Bangalore and Chennai are helping to propel India to the forefront of the world's IT industry. They contributed in large part to the country's economic growth of 8.6 per cent last year. Indian software and related services exports jumped 33 per cent from 2005 to reach US$23.6 billion (Bt800 billion) last year.

Nasscom, which represents India's software industry, has estimated that the value of Indian tech services, including outsourcing, will reach $60 billion by 2010. If the trend continues India could become the third largest economy in the world by 2050, behind China and the US. The IT and software industry already has a workforce of more than 1.6 million which forms a growing portion of the middle class of 250-300 million.

For the Thai visitors, the scale of India's outsourcing and software industry and its pace of development are simply breathtaking and may not offer the kind of model that Thailand is looking for. "We Thais have been building shophouses that don't require much sophistication in terms of engineering and architecture, whereas the Indians are building high-rises that incorporate state-of-the-art technologies and architecture," said Dr Manoo Ordeedolchest, an IT expert from Sripatum University.

Liberalisation of the Indian economy in the past decade had a lot to do with the boom. But the turning point was the Year 2000 (Y2K) computer glitch that plunged the world into a frenzy of software fixing programs. And it was India's tech giants like Infosys, Wipro and Tata Consultancy Services that were on hand to provide the experts to cope. The phenomenon helped India build a reputation as a country that can meet hi-tech demands at low cost.

The overhauling of India's education system was instrumental in preparing the necessary workforce of engineers and programmers. In Bangalore alone there are as many as 60 colleges that work closely with software and IT companies. English-language proficiency is something that Thai counterparts find difficult to match.

Those in the Indian hi-tech industry probably cannot be faulted for feeling they are on top of the world when it comes to outsourcing and IT development. A business matching session arranged between the visiting Thai vendors and their Indian counterparts didn't seem to find common ground or synergy as one might have expected. Most of the Thais couldn't help feeling the Indians were more inclined to look to the rest of the world for potential markets than for regional partners.

So what can we learn from the Indian experience? Political commitments on the part of successive Indian governments were essential in paving the way for India's emergence as a software and IT hub. Governments provided necessary basic infrastructure, overhauled the education system and offered incentives to lure both domestic and foreign investment. But it all started with vision. Despite their often ugly internal political bickering, Indian politicians have shown they have the vision to push their country toward becoming the hi-tech centre for the world. For one thing, the pace at which the Indian IT industry is moving certainly has the effect of pressing home the need for self-examination by the Thais.

But most of the Thai delegates seemed to be resigned to the fact that vision is the last thing that Thai politicians have on their agenda. Their hope for now is that politicians will somehow set aside their differences and try to put the country back on track after the December general election. And it's only then that they may start talking about having vision.

Thepchai Yong