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Surveying Global Information Cities

Urbanist Solly Benjamin on economics, land-use policies, and social conflict in India's IT capital Bangalore

Q: You have studied the evolution of the IT sector in India's "IT capital" Bangalore from an urban studies perspective. Where did your interest originate?

A: My research was originally concerned with small firms in a particular neighbourhood of Delhi. That neighbourhood, categorized by planners as a ‘slum’ started off as a residential neighbourhood, and from the 1970s started to house clustering firms producing cables and conductors. By the mid nineties, it became India’s biggest cluster for cables and conductors. The threat to this came from Master Planning, which benefited large corporate firms at the cost of smaller ones. That led me to look closely at how city economies were constituted and who benefited from public funds in infrastructure and land. On moving to Bangalore, with this experience, I discovered that this issue was much sharper in Bangalore. From 1998-99 onwards, under the policies of the government at this time, the higher end IT firms were able big subsidies in high end infrastructure and services, while the rest of the city economy seemed starved of even basic inputs. Thus, due to this politics of capture by the corporates, much of Bangalore economy, centered on manufacturing and trade, and began to be excluded. Planning and high-end administrators normally associate small firms with slums and not worth the same kind of attention as large firms. My interest in how this has happened (in Bangalore the IT) is not just of planning as a normative issue but a deeply political act. I do not think that merely promoting ‘participatory planning’ will solve the problem. Seeking justice in cities is inherently a political act.

Q: For years India has attracted the giants of the global IT industry. What is it that makes India so attractive for the IT business?

A: The interest is on several levels, but basically one of low costs. We have had an education system that has stressed a small group to have relatively good education at the cost of a large proportion with almost nothing. The latter, even though a small proportion of the 1 billion population, are enough for international capital to seek. While there are some firms seeking high end skills, most are BPO (Business Process Outsourcing) type, who would basically be interested in low-cost labour. They run call centres for reservations, complaint systems, etc. Operators are trained to speak with various accents, and they even have the weather report of the region they are dealing with in front of them, so that they can do polite conversation.

Q: People are actually trained to speak different accents to blend in with the geography of the customers?

A: It is quite common. There is a whole training system for region-specific accents, that includes getting people to speak a particular type of English from a particular part of England, for example. These firms would bring in people from the UK, for instance, to transfer accents as a skill for particular call centres. Call centre operators have to handle different identities, depending on their particular assignments. They are usually young people between 18 and 22, and have to work at night for several days at a stretch due to the time difference with the region they handle. There are strict regulations on the workplace, supervising the frequency and length of breaks and even visits to the bathroom, all geared to extract the maximum surplus of labour. On the other hand, one does not hear about norms regulating certain basic working conditions. This is resulting in a great amount of pressure and also a high rate of attrition. People join in, make some bucks but also realize these are dead end jobs and then attempt to quit.

Q: Apart from these "digital sweatshops", there is also a higher skill level that attracts IT business?

A: Firms such as Philips would be looking at relatively high-end software development in Bangalore, which is increasingly attracting high-level skills. They look at Bangalore as an alternative to Delhi or Bombay. This is relatively new, a development of the last two or three years. Both of high-end skill levels function at much cheaper price levels then in other parts of the world.

Q: Some years ago many Indian IT specialists actually went to the US or Europe where they were hired by IT firms. Is there a tendency of companies relocating to India rather than recruiting labour force from there?

A: Yes, I think that is happening as costs for both high end and also techno-coolie work is cheaper here. We interviewed the head of Philips over here, and he made that point that there are some of these firms, including Philips, who are really looking at locations in Bangalore not for what is called “techno coolie” kind of work, but actually high-end software work. They would locate these people from a general population pool and then train them for their own product development. The kind of density they could get here is not possible in places like Ireland or Israel, for example, and not even in Silicon Valley. That is one part of the market, we don't really know how big it is, but obviously it is a part. There is another interesting issue: The demand for locations is not only driven by possible returns on technology or labour (whether techno-coolie or high-end), but by way financial capital seeks surpluses on real estate. There has been substantial research on Indian IT labour, but so far the role of real estate in attracting international capital has received little attention.

Q: Why are the returns on real estate are so high?

A: With Lawrence Liang from the Alternative Law Forum we had been looking at the new laws and institutions that were set up to facilitate large firms to access land at Bangalore's periphery. We found that land is forcibly acquired by the state government agency at very low agricultural prices, but is then allocated at highly subsidized rates to real estate developers. The developers, at times the Government agency itself form partnerships with globally connected financial institutions as well as IT firms. There is a then triangular kind of relationship that provides very high returns but also as an investment for a uncertain future. But the land in question is often valuable agricultural land, for living, and also the location of small clustering firms. So this is an area of severe social conflict: Higher levels of government in an alliance with international and high end domestic capital, attempt to move out competing uses including smaller clustering economies. No wonder that planning agencies under higher level governments see it fit to categorize the smaller firms as being slum wise, illegal, non-conforming, and hence to be shifted.

Q: Which are the groups that oppose that kind of policy?

A: There is opposition from farmers, both large and small, and also at times from people involved in small firms and also residential areas on lands are being notified under eminent domain. We have now the mis-use of a system that was devised as a grand socialist project in the 1950s, where land which was deemed to be free or under state control could be notified for acquisition for “larger public purposes”. The problem is if that public purpose has a global vision at the cost of the locals, than the laws are structured increasingly in such a way that the local groups cannot effectively protest against their own land being taken over and being given to large business corporations. The law, just like planning, offers no protection, so the protest comes in form of political forums. You don't necessarily have a social movement kind of protest. It is a more quiet and subversive policy cantered on local government. For the local groups whose land is being taken over their access to politics is from municipal and elected village bodies. It is these arenas fighting with higher levels of government to control land that they did earlier before it was notified. These lands that are being taken over are not necessarily “agricultural” lands but as in the “World Bank's terminology” they would be of “lower productive value”: Housing, small clustering firms that form the bulk of Bangalore economy of the manufacturing, trade and services. Thus, land is not ‘neutral’ but is already loaded with a kind of economy which influences the contest when it is allocated at subsidized rate to global business.

Q: Do these investment policies relate to large development schemes, do they have anything to do with the development policies of the UN, WTO, World Bank, etc.?

A: There is definitely a connection. If you take the emphasis on what USAid or the World Bank would call the “rationalization” of markets, and marking cities as places of global investments, than the ‘policy makers’ need to upgrade infrastructure, so that cities can attract global capital and make cities competitive. You can see here, between the lines, a justification to basically subsidize high end firms, at the cost of everyone else. Not surprisingly, a lot of the policies involve public-private partnership, which is a “hot” kind of term, and serves to facilitate huge IT corridors, as in Malaysia, Singapore, and here in India. Another support comes in terms of looking at E-governance in a big way. Our research has looked into the Bhoomi programme, a huge programme for land-titling using digital databases for 20 million land records all over the state. This programme has allowed big business to move into areas that would traditionally be part of the small firm domain. Recently on the press, The Hindu of February 12, there is an interesting news report on the US pressing at the WTO, for its Financial Institutions to access in local ones, -- essentially to tap on the metro’s retail and land based economies. Today’s paper, has an announcement of FDI into malls and multiplexes and a special fund at the Min. of Finance to comfort the risks here. So you have a range of policies that are in accordance with the adaptation of markets to global competition, as in development schemes.

Q: According to a BBC report, Bangalore's top position in IT industry might soon be a thing of the past. Is the city actually losing its “IT crown” because of complaints about insufficient infrastructure? Is the “IT exodus” a fact?

A: That might be happening, but one does not know whether this is a kind of “red herring”: if you are not going to give us better deals in terms of lands and subsidies, we are going to move out. Almost all IT firms are driven by skill development. Bangalore still has a lot of skills, and while firms might open up offices in other places, the first move is into Bangalore to capture those kinds of skills. I suspect that this is an argument towards capturing subsidies and land-related deals these firms have been able to capture since 1998, and if that disappears, it is a problem for them. It also has to do with the implication of the planning process. There has been a dilution of certain forms of government as special purpose institutions were set up to make possible access to land in good location or high-grade infrastructure. When local governments start to re-assert themselves, then there is a real problem for corporate groups. There is another dimension, too, which is the fear of the larger firms of middle-and smaller-level IT firms. It is not only IT and non-IT it is also within the IT industry, there is a fear of small and the medium-sized businesses.

Q: Why would small and medium-sized businesses be feared by the giants?

A: When you talk about people getting better working conditions or even salaries, it is not necessarily in the largest of firms. They might join a large firm to get the option to go abroad. Many come back and start their own business, or start a middle-level one. People are not just leaving BPO because of psychological and stress factors, they are also starting to carve out their own space, and that becomes a serious threat to any kind of large firm.

Q: Bangalore is referred to as India's "Silicon Valley". How good a comparison is that? Is there a similar presence of defence industries, for example?

A: Bangalore has been a base for defense and aeronautic industries, which definitely helped the emergence of the electronics industry here in the 1960s and 70s. This led on to the growth of the IT industry. Today there are increasing connections between the military complexes here and other parts of the world. It is true that there is a large group of people employed in IT and IT-connected services, but they’re much greater number of people employed in garments, silk, and other trades. The city has multiple economies and cannot be reduced to what is being labeled as Silicon Valley. That’s just PR for one set of people.

Content type
Projects World-Information.Org
Date 18.02.2005


IT business call centres BPO Business Process Outsourcing cultural intelligence Europe Singapore Delhi India Malaysia UK Bangalore Bombay Philips ALF Alternative Law Forum Lawrence Liang BBC WTO World Bank UNO Solomon Benjamin
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