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HIGH TECHNOLOGY AND INTRA-URBAN TRANSFORMATIONS: A CASE STUDY OF BENGALURU,

A dissertation submitted to Kent State University in partial fulfillment of the requirements for the Degree of Doctor of Philosophy

by

Rajrani Kalra

December, 2007

Dissertation Written by Rajrani Kalra B.A., University of , 1993 M.A., University of Delhi, 1995 B.Ed., University of Delhi, 1998 M.Phil. University of Delhi, 1999 M.A., The University of Akron, 2003 Ph. D., Kent State University, 2007

Approved by ______Chair, Doctoral Dissertation Committee Prof David H Kaplan

______Members, Doctoral Dissertation Committee Prof Emeritus S.M.Bhardwaj

______Dr Shawn Banasick

______Prof David McKee

Accepted by

______, Chair, Department of Geography Prof Jay Lee

______, Dean, College of Arts and Sciences Dean Jerry Feezel

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TABLE OF CONTENTS

LIST OF FIGURES vi

LIST OF TABLES x

ACKNOWLEDGEMENT xii

DEDICATION xvi

CHAPTER 1: INTRODUCTION 1

INTRODUCTION 1

BENGALURU: The STUDY AREA 5

WHY BENGALURU IS MY STUDY AREA? 10

BACKROUND OF THE STUDY 10

RESEARCH QUESTIONS 13

RESEARCH DESIGN AND METHODOLOGY 14

OUTLINE OF DISSERTATION 22

CHAPTER 2: HIGH-TECHNOLOGY IN INDIAN CONTEXT 24

INTRODUCTION 24

WHAT IS HIGH- TECHNOLOGY? 26

THEORETICAL FRAMEWORK OF HIGH-TECHNOLOGY. 28

HIGH-TECHNOLOGY AND REGIONAL DEVELOPMENT 34

HIGH –TECHNOLOGY AND DEVELOPING COUNTRIES 36

HIGH –TECHNOLOGY AND REGIONAL DISPARITIES IN INDIA39

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HIGH-TECHNOLOGY IN INDIA 43

WHY HIGH-TECHNOLOGY IN BENGALURU? 56

CHAPTER 3: URBAN LAND USE, REAL ESTATE AND HIGH TECHNOLOGY 63

INTRODUCTION 63

GROWTH OF BENGALURU 64

URBAN LAND USE 69

REAL ESTATE IN INDIA 78

REAL ESTATE AND HIGH TECHNOLOGY IN BENGALURU 88

REAL ESTATE AND LAND PRICE TRANSFORMATION 103

CHAPTER 4: HIGH –TECHNOLOGY AND CHANGING ECONOMIC LANDSCAPE 117

GROWTH OF INDUSTRIAL DEVELOPMENT IN BENGALURU 118

HIGH-TECH INDUSTRIES IN BENGALURU 125

HIGH- TECHNOLOGY AND SOCIO-ECONOMIC TRANSFORMATIONS 139

HIGH-TECHNOLOGY AND GOVERNMENT EXPENDITURE 163

CHAPTER 5: HIGH-TECHNOLOGY AND SOCIO-CULURAL TRANSFORMATION 180

HIGH TECHNOLOGY AND SOCIO-CULTURAL DISPARITIES 187

HIGH TECHNOLOGY AND SOCIO-CULTURAL TRANSFORMATION 201

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CHAPTER 6: CONCLUSION 226

RESEARCH OBJECTIVES 228

SUMMARY 231

CONTRIBUTIONS OF THE STUDY 234

FUTURE DIRECTIONS 236

REFERENCES 237

APPENDIX 255

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LIST OF FIGURES

1.1 Study Area (Hundred wards of Bengaluru) 8

2.1 Inter-Regional Disparities in India 42

2.2 Hardware and Software Exports in India: 1995-2001 43

2.3 India’s Software Exports 44

2.4 Growth of Indian IT and ITES (IT enabled services) 1997-2005 45

2.5 High-Tech Industries in India: 2000-2003 46

2.6 Share of Indian Cities in Software Exports: 2001 47

2.7 Share of Indian States in Export of Information Technology, 2005 50

2.8 Siliconization of India: A Home to 52

2.9 National centers of software technology parks of India 56

3.1 Birth of /Bengaluru City 65

3.2 Growth of Bengaluru: 1537-2001 67

3.3 Urban Land Use in 1895 70

3.4 Bengaluru Land Use: 1951 72

3.5 Changing Land Use in Bengaluru: 1961-2011 73

3.6 Urban Land Use of Bengaluru: 2004 74

3.7 Different Cores of the City of Bengaluru 75

3.8 The Future Growth of Cores of Bengaluru 76

3.9 Real Estate Acquisition Spree by Business Process Outsourcing 82

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3.10 Number of Shopping Malls in 2008 84

3.11 Housing Shortages in Indian Cities: 1991 86

3.12 Good Life Index of Indian Metropolises 87

3.13 Housing and its Shortages in Bengaluru, 1961-2011 90

3.14 Property Tax Collected in Bengaluru from 1991-2003 92

3.15 Information Technology Strips in 94

3.16 Bold Billboard Outside Mall in Koramangala 95

3.17 The International Tech Park at Whitefield 96

3.18 Forum in Koramangala 97

3.19 Food Court in Forum Mall, Koramangala 98

3.20 Posh High-Rise Apartments next to Forum Mall Koramangala 100

3.21 Billboards Advertising Tech Parks in Whitefield 101

3.22 Residential Land Values: 1997-2001 105

3.23 Commercial Land Values in Bengaluru in 1997-2001 108

3.24 Residential Land Values in 1997-2001 110

3.25 Commercial Land Values in 1997-2001 111

3.26 Real Estate Land Values in Bengaluru: 2002 113

4.1 Total Investment in Bengaluru by different agencies 124

4.2 Economic Landscape of Bengaluru 127

4.3 Share of Bengaluru to total software’s export 129

4.4 High-Tech Companies in Bengaluru 131

4.5 Multinational Corporations in 132

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4.6 Instrument: First multinational in Bengaluru in 1984 133

4.7 Information Technology Corridor in Bengaluru 134

4.8 Univariate LISA Results of High-tech Firms in Bengaluru 136

4.9 Direction and Gravitation of High-Tech Firms 137

4.10 High-Tech and the Non –High-Tech Landscape of Bengaluru 140

4.11 Residential Area of Koramangala 142

4.12 High-Tech firms in Koramangala 143

4.13 Brigade (shopping strip) Road in the central business of Bengaluru 149

4.14 MNC Motorola in Bagmane Tech Park 151

4.15 Infosys India’s information technology firm 159

4.16 Electronics City 160

4.17 International Technology park at Whitefield 162

4.18 High-Tech firms in Bengaluru 165

4.19 Infrastructure Expenditure in 2003 by Bangalore City Corporation 168

4.20 Infrastructure Expenditure in 2005 by Bangalore City Corporation 169

4.21 Expenditure on Infrastructure in Bengaluru 171

4.22 High-Tech firms and Expenditure Pattern, 2005 174

4.23 Revenue Trends in Bengaluru in 2005 176

4.24 High-Tech firms and Revenue : 2004 178

5.1 Population Growth of Bengaluru City Corporation: 1871-2001 181

5.2 Diversity of Domestic Migrants in Bengaluru: 2001 183

5.3 International Migration to Bengaluru 184

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5.4 Population Distribution in 100 wards of Bengaluru 186

5.5 Spatial Clusters of High-Tech Firms and Population 189

5.6 Spatial Clusters of High-Tech Firms and Literate population 191

5.7 High –Tech Firms and Illiteracy 192

5.8 Slum population in Bengaluru 195

5.9 Location and Ownerships Pattern of Slums in Bengaluru 197

5.10 LISA Results of High-Tech Firms and Slum Population 199

5.11 Socio-Economic Landscape of Bengaluru 200

5.12 Pizza Hut Chains in India 212

5.13 Increase in use of Vehicles (private use):1993-2005 216

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LIST OF TABLES

Page

1.1 Data Sources 16

1.2 Secondary Data Analysis 21

2.1 Percentage of World Gross Domestic Product in 2004, 2025 and 2050 38

2.2 Digital Awareness in South Asia and Developing Economies 39

2.3 Region wise estimated contribution of Export of software and Services: 2001 48

2.4 Engineering Colleges in India 53

3.1 Expected Returns in Investment in Real Estate in Indian Cities, 81 2006

3.2 Determinants of Commercial Land Value: 1997 116

4.1 Industry wise investment in Bengaluru 123

4.2 Distribution of High-Tech Firms amongst the 100 Wards of Bengaluru 126

4.3 Land use distribution in the High-Tech wards and information technology parks 146

4.4 Expenditure on Infrastructure to total expenditure in Bangalore Municipal Corporations 172

5.1 Voice of People: Is High-Tech changing Bengaluru? 202

5.2 Linguistic Diversity among the respondents 205

5.3 Occupational Diversity among the respondents 210

5.4 Recreational Activities of Bangaloreans 213

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5.5 Means of Transport used for Work by respondents 215

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ACKNOWLEDGEMENT

I have been interested in learning new ideas and teaching since my childhood. My friends in school used to call me a philosopher-- always lost in my own world. This juxtaposition of the urge to learn and thinking led to an interest

in research and teaching in an institution of higher learning. It takes the efforts of

several to train and provide the resources of higher education. I thank my parents

(deceased) and mentors for providing me guidance and support for

accomplishing this goal. I have been blessed to have had the opportunity to work

under the mentorship and nurturing guidance of a renowned scholar in urban

geography: Professor David Kaplan (advisor) at Kent State University.

I grew up in a family of academicians as my grandfather was the principal

of an engineering college and my late father O.P. Kalra was a literature enthusiast having earned two masters himself (English and Punjabi). My father wanted me to study economics, but I was more inclined to study geography as my grades were higher in geography as compared to other disciplines, and I had an interest in knowing different places. Thus, I ended up earning my BA (Hons.) in geography from Miranda House, University of Delhi, and BA in education from

University of Delhi , MA, M.Phil in geography from Delhi School of Economics,

University of Delhi , and MA in geography and planning from the University of

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Akron, . I was interested in travelling and always asked myself: why are cities and regions different from each other?

What causes the success and failure of regions in attaining higher or declining levels of economic development? What processes cause the growth and decline of urban systems? This curiosity led me to pursue further studies in geography and write a doctoral dissertation at Kent State University.

When I started at Kent State University as a graduate student, I approached Prof. David Kaplan for mentorship in pursuing graduate studies under his tutelage. He readily agreed and since then has read my dissertation draft several times and advised me on numerous occasions which led to the improvement of my writing and analysis. He has a good sense of humor and has been a fun person to work with under whose guidance I have learnt immensely.

He has been supportive in my academic endeavors such as attending all my presentations at the AAG meetings and supporting me in my Master’s thesis defense in December 2003 (University of Akron) when I had been at Kent only for one month.

I thank my other committee members Professor Emeritus Surinder

Bhardwaj and Dr. Shawn Banasick for providing useful suggestions to improve the quality of my dissertation research.

I also thank the cognate faculty representative (Economics) Professor

Dave McKee for providing useful suggestions to improve my dissertation writing.

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I am indebted to the department of geography at Kent State University and

the Chair, Jay Lee for providing me graduate assistantship for four years. I was

also awarded the international travel and research grants from Graduate Student

Senate, Gandhi Fund (Prof Surinder Bhardwaj) and Beck fund grants from Kent

State University which made several trips to Bangalore, India possible to visit my study area, collect data and conduct surveys on numerous occasions. I also want to thank Marylou Church our secretary who was always there to answer my queries and was very supportive and helpful throughout my stay at Kent State.

I am grateful to my former advisor, Professor Emeritus Ashok K. Dutt from the Geography and Planning department at the University of Akron who provided me the opportunity to study in the USA via a research assistantship during 2001-

2003.

My brother Prahlad Kalra (Chartered Accountant and Lawyer) and sister

Kiran S. Khullar (Ministry of Finance, Government of India) has been of immense support since my early years of education in Delhi, India. My mother Prem Rani

(deceased) would have been very happy to see me pursue graduate studies in the USA and would have been proud and joyful with my success in higher education. My brother and sister have provided encouragement, blessings, and have always been there when I needed them. My sister helped me in collecting data, and making arrangements for my stay in Bangalore.

I thank Naya (my niece) for being with me this summer (2007) and supporting me in my dissertation writing process. My eldest brother Onkar

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Narayan Kalra was always in touch with me calling every week all these years in my graduate school and showing his support and love and my second eldest brother Dhruv Narayan Kalra was always inspiring me by giving a warm welcome whenever I went back home.

Last but not the least I want to thank my father-in-law Baleshwar Thakur

(also my former teacher), a professor in geography at the Delhi School of

Economics, University of Delhi for general guidance with questionnaires, and editorial assistance. My mother-in-law Chanda Thakur provided great support in pursuing studies in the US and accompanied me to Bangalore during the data collection process. This dissertation could not have been completed without the encouragement, support, gentle nudges, and patience of my husband, Sudhir

Thakur. On many occasions the dissertation writing process took my attention away from him and he bore through it with patience and understanding.

I take this opportunity to thank the Bangalore Development Authority

(BDA) and Sri Gaurav Gupta and Deepak from Bruhat Bengaluru Mahanagar

Palike, Department of Information technology and Bio technology, Bengaluru for helping me with data collection at the level. The students from the Institute of Social and Economic Change (ISEC) Bangalore and geography students from

Bangalore University were very cooperative in completing the questionnaire. It is impossible to thank every individual who has directly and indirectly helped me in the dissertation writing process. I thank them all for their input and advice.

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Dedicated to

My Parents Om Prakash Kalra and Prem Rani Kalra (Jaiji and Mamma)

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CHAPTER 1

INTRODUCTION

Introduction

The emerging regional economies of countries, such as , ,

India and , also called ‘BRIC’, pose both a threat as well as an opportunity

to the established global firms. To safeguard from the threat and take advantage

of the opportunities, multinational corporations have progressed via three phases

in the past few decades (The Economist, April 7, 2007). During the first stage,

firms operate from their home country and sell products through overseas sales

offices. During the second stage, parent companies create miniaturized models

of themselves in nations around the world and implement their strategic goals of

increasing size and penetration of market. In the third stage, the global firm,

instead of replicating its own model, shapes its strategies and development goals

as a ‘single global entity.’ In this stage, the global firm out sources jobs

anywhere, depending upon the acceptable mix of costs, needs, and business

environment.

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To elucidate this phenomenon, Hymer (1972) eloquently proposed the

‘law of uneven development,’ and the ‘correspondence principle,’ which provided the rationale of these three stages. He argued that multinational corporations can provide benefits to developing nations but these benefits are spatially restricted.

Further his ‘correspondence principle,’ suggests that multinational corporations divide the world economy using a ‘pyramid of power,’ into ‘cores and peripheries,’ which is governed by ‘decentralized decision-making’ units but remains under an overall ‘centralized control’ (Pitelis and Sugden, 2002). The mantra of this ‘new economy is-faster, better and cheaper production of goods or delivery of services (Acs, de Groot and Nijkamp, 2002). Global firms desire to exploit the availability of cheap, high skilled and a pool of labor with knowledge of

English language to promote efficiency and productivity in these global enterprises.

The integration of the Indian economy with the world economy manifested several spatial changes, such as the increasing specialization of urban regions, growing urban interdependencies, new patterns in the spread of technologies, changes in the product-mix of regions and changes in the sector mix of the economy. In the process of urban economic development, cities interact and transmit productivity via inter-urban and intra-urban interdependencies. Banerjee-

Guha (1997) examined the impact of multinational corporations’ locations and uneven regional development in India during 1990. Her emphasis was on exploring the impact of spatial organization of MNCs upon regional disparity, 3

settlement system and corporate hierarchy in India. Madon (1997) argues that there are two classes of people in Bengaluru: skilled and unskilled. This internal social disparity will lead to an intertwining effect of globalization on local development whose outcome will be an increased interregional migration within

India with Bengaluru as a destination. Saxenian (2006) has developed the notion of an Argonaut-led development, which is a class of well trained and very highly skilled entrepreneurs engaged in creating a niche in the Silicon Valley in India.

The entrepreneur, who was a short term foreign born migrant from India to the

Silicon Valley in , gets the educational, technical and managerial experiences, invests in social networking with peers, takes the knowledge back home and becomes a catalyst in building local technological capabilities. Also,

Sohn et al. (2003) concluded that information technology had a positive and an influential effect on the agglomeration of economic activities in both and

Seoul metropolitan areas.

Large cities in India, such as Bengaluru, Delhi, and , have experienced a process of urban growth based on agglomeration economies. A process of concentration and centralization leads to the location of economic activities in large sizes in central areas. Two trends can be noted during this process of urban change: ‘urban concentration’ and ‘urban dispersal.’

Economic activities have a tendency to concentrate in central area or the downtown and disperse towards outer areas or suburbs. This takes place via three stages: concentration of economic activities in central areas and outskirts, 4

followed by population shifts towards inner and outer suburbs, and last location of manufacturing, retail and back office functions in the outer areas (Gaschet,

2002).

This process produces prosperity and disparity within urban areas since increased investment from high growth areas is expected to be located in the same region. This can be sustained only by larger urban areas showing a higher technical progress (Malecki and Varaiya, 2000). Hence, urban concentrations lead to a continued migration of capital, finance and skilled and unskilled labor from surrounding areas and other locations to concentrate in the urban areas.

This produces intra-urban disparities and transformations between the fast growing areas within cities and the lagging areas within these cities. The fast growing areas would tend to attract investments in social infrastructure, utilities, shopping malls, housing, roads, and schools while the slow growing areas experience congestion, dilapidated infrastructure and poor maintenance of public utilities.

This background leads to a set of overarching questions-- why do some urban regions grow and other stagnate in the global economy? Why do certain economic activities concentrate in some urban areas and abandon other urban regions? Does the location of high technology lead to deepening of existing disparities, and does it have an impact upon development at global, national and regional scales? 5

In this research, an attempt has been made to understand how high-tech firms have impacted the city of Bengaluru socially and economically, and how they have created intra-urban transformations within the hundred wards of

Bengaluru. Bengaluru was always considered to be a cosmopolitan city, but after

1991, it has become the software hub of creative and talented people. The rise of information technology firms have led to further create and deepen the intra- urban changes within the hundred wards of Bengaluru. These changes range in terms of social and commercial activities, such as educational, shopping, residential (types of houses) and other infrastructural facilities, such as roads, transportation, water supply and drainage systems.

Bengaluru: The Study Area

This study explores the impact of high-tech firms on the city of Bengaluru or Bengaluru. Bengaluru is the capital city and the largest city of Karnataka state in the center of Southern India. With a population of over five million, it is the fastest growing and the fifth largest city in India. The city of Bengaluru is located in the interior of Deccan Peninsula on semi-arid at an elevation of 3000 feet above sea level. It is located on 12 degree 58 minutes North latitude and 77 degree and thirty three minute East longitudes. Chennai, the major city in

South India, is located 223 miles to the east of Bengaluru; Mysore is 88 miles to the south; Mumbai is 697 miles to the north northwest, and is 385 6

miles to the north. Its inland location has provided good transport connections with sister cities. The city is well connected by five railway lines, five National

Highways and by a good network of country roads and a number of regular flights to major cities. The city contains excellent site and situation conditions which have propelled it to grow incessantly. Its altitude of over 3000 feet keeps it cooler than most Indian cities. It is blessed with a salubrious and pleasant climate throughout the year due to reduced day temperature. Because of its location on a comparatively level terrain and also ridge and valley topography in the middle of the plateau, the sharp topographic contrasts are lacking (Gist, 1957, 357). No major rivers flow near the city, except the city being the water parting area for the

Ponnaiyar basin in the east and the Vrishabhavti basin in the west (Mahadev,

1971, 244).

The local subdued landscape has provided imposing pink and grey granites, mild summers and cool winters, abundant and amazing greenery, colorful gardens and lakes, blooming golden acacias and splendid pink cassias.

Apart from the flora it also has rich history reflected in ancient forts, and temples with fascinating rich architecture. This in all has endowed Bengaluru with a distinctive, colorful physical and cultural landscapes of repute, attracting tourists from far and near. The situation of the city is equally good bordered by the

Western Ghats with tall peaks and lush greenery in the west, covered with coffee and tea plantations, sandalwood in the south and west, and rolling hills in the north and east (Kamath, 1996, 1). The hinterland of the city is rich in natural 7

resources, especially agricultural, mineral, and horticultural and forest. It is ironic that water constitutes one of the greatest obstacles to the city region’s future.

The productive resources of the hinterland make the city a commercial and industrial center and a large regional interesting and vibrant city. Like many cities of colonial and post-colonial India, the rise and growth of Bengaluru has been phenomenal and spectacular due to a combination of traditional, colonial and post colonial effects. 8

Fig.1.1 Study Area (Hundred wards of Bengaluru)

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Today, the urban landscape of Bengaluru is dotted with industrial firms and software and computer industry. It has earned the sobriquets of “Silicon Valley of

India” due to its favorable geographical location, climate and impact of economic reforms. It is truly a primate city in the State of Karnataka, and its dominance is awesome, not only at national but the international level.

But now no more would it be accurate to call Bangalore as Bangalore.

On the eve of the 50th anniversary celebrations of Karnataka’s State on the 1st of

November 2006, the name of the state capital has changed from Bangalore to

Bangalure or Bengalaluru/ Bengaluru the city name in Kannada (regional language of Karnataka)( Moritsugu, 2006 and Hindu, 2006; www.hindu.com).

Bengaluru is not the only city which got rid of its English name, but it has followed the footsteps of other cities, such as Bombay to Mumbai in 1995; Madras to

Chennai in 1996; and Calcutta to in 2001, to name a few. In the case of

Bengaluru, there are two major factors for the change of name. The first is its political gain to protect the regional pride for the non-English speaking masses, and secondly, with rising migration within and out of the country to Bengaluru, it is becoming culturally and linguistically diverse and the local populations are feeling threatened (Moritsugu, 2006). But Bengaluru has brought the name of

India in the limelight and has made India the second largest software exporter in the world.

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Why is Bengaluru my study area?

The city of Bengaluru has been selected as the study area because of four reasons: firstly, the researcher’s deep familiarity, love for the south Indian culture, its people and landscape, as the researcher find it to be divine and serene where the majority of residents of the city in early morning go to the temple filled with jasmine flowers and pray to God and then go to work; secondly, it is the magnet for software and information technology industries and has drawn the attention of the whole world; thirdly, it is a suitable area for the scientific study of the impact of high-technology on economy and society within the city; and, finally, research questions addressed here have not been attempted and answered by other researchers.

Background of the Study

It is evident from the above that the city has been undergoing rapid change in both economic and socio-cultural landscapes. Several studies have investigated the geographical, historical, economic and technological aspects of the city and have documented the intra-city variations related to demographic change, spatial spread social structure and rise of the city as the information technology center. It is, therefore, imperative to discuss some of the substantive theoretical and empirical studies which have improved our understanding of the evolving city structure. Gist (1957) made an early effort to describe locational patterns of business activities, industrial developments, public and semi-public 11

institutions and residential segregation in different ecological zones of the city. A similar but a comprehensive sociological study of the ecological structure of the city, including historical background, demography, housing and industry has been presented by Venkatarayappa (1957). Based on field observations, Singh

(1964) presented a physical geographical approach on the city landscape from the origin to morphology and land use. His book provides an exploratory study in the mapping of the morphology and planning problems. The study analyses complex relationships between site characteristics and socio-cultural space. In a thought provoking and scintillating study in the mid 70’s, Prakasa Rao and

Tewari (1979) quantitatively measured the spatial variations in socio-economic characteristics of the city taking class, ethnicity, caste, family size and economic status into account. Based on sample survey, they collected a wealth of primary data. The ecological structure of the city revealed east-west zonation, more religion- based, historical imprint of the past and core-intermediary –periphery zonation of socio-economic status. The history and development of industry, population and the recent economic growth, which is shaping Bengaluru, has been dwelt upon by Gowda (1978). In this process of growth, Mahadev (1978) explores land use changes from purely administrative, military and resort to industrialization which has strengthened the economic base of the city. Several factors, separately and collectively, were found to be responsible for changes in the spatial growth and internal structuring of various activities of the city, the most important being the geographic, economic, social and historic. Recently, there 12

has been a rise in modern literature on India’s information technology and

Bengaluru.

Srinivas (2000) investigated the urban competitiveness of IT sector of

Bengaluru and discussed the socio-economic and physical determinants which have made Bengaluru an IT city. Kuttaiah and Sommers (2000) have revealed how the economic change in Bengaluru has impacted the built-environment of the city. Madon (2001) has drawn attention to three major issues: first, there exists gross inequality between groups of diverse socio-economic status within the city of Bengaluru and in the State of Karnataka; second, there is extreme poverty amongst the inhabitants; third, there is an acute problem of civic deficiency both in the city of Bengaluru as well as in the state of Karnataka which is a great cause of concern. Aranya (2002) has demarcated the inequalities in Bengaluru’s urban economy and explained the transforming spatial structure of the city with the growth of the information technology sector.

Upadhaya (2003) has reported that high technology’s well paid and cosmopolitan workforce is creating a new category of enterpreneurs who are emerging from the middle class.There has been a drastic transformation as the working and middle class are becoming suddenly rich and creating a widening gap between the workforce employed in high- tech and non-high-tech firms. This changing income disparity is reflected in the newly created commercial businesses, malls and recreational activities. Parthasarthy (2004) has tried to understand the social embededness in the city of Bengaluru and has argued that apart from a high 13

level of illiteracy and poverty, India has been ranked second in the software industry. He has emphasized that apart from the global explosion in software demand there has also been a drastic change in the character of the Indian state which has transformed Bengaluru. Eisebith (2002) studied Bengaluru as a model of high technology growth in India, and she demonstrated: firstly, its success is based upon the internal networks of technological actors, local relationships between innovation stimulation and support which characterizes successful regions in developed countries; secondly, Bengaluru is an example of an unplanned technology region which shows characteristic of industrial districts as identified in developed countries; thirdly, Bengaluru is also a model where regional relations construct the fabric of mutual encouragement, support and social coherence in order to attain innovation- based economic development. Dijk

(2003) focused on factors making Bengaluru an IT cluster and elaborated the role of national, state and local governments. He also discussed: will Bengaluru benefit or suffer from being a high-tech city? Heitzman (2004) examined the city as a network city with emphasis on the creation of information technology and the challenges it is facing.

Research Questions

Many studies have been conducted on inter-urban transformations, but there is still a gap in understanding the role of high–technology in creating socio- 14

economic transformations within a city. This study will try to understand the impact of high-tech firms on the city of Bengaluru. It will seek to uncover the extent to which high-tech firms have created a new socio-economic landscape within the second largest city of . In this research I propose that high technology is transfiguring and reconstructing urban and economic development at the macro level but is creating urban disparities at the micro level. I will examine and evaluate the socio-economic processes occurring within the city of

Bengaluru and answer the following questions:

1) Has the high-tech industry contributed to intra-urban (within the city) transformations in Bengaluru (ward level)?

a. Is the location of high-tech industries associated with the urban

infrastructural development of the Bengaluru city?

b. How have real estate prices been impacted by the rise of high-tech

industry in Bengaluru?

2) Have high-tech firms created social gaps within the different wards of

Bengaluru?

a. What are the changes in the life style (recreation, level of wellbeing,

material wealth etc) of the people in various wards of Bengaluru?

b. Has the high-tech firms created a new landscape of Bengaluru?

Research Design and Methodology 15

Data Sources

The research design of this study consists of a combination of qualitative as well as quantitative approaches using primary and secondary data. This approach has assisted the researcher in comprehending and investigating the intra-urban transformations (urban and socio- economic changes) in Bengaluru.

The secondary data has been collected from various governmental organizations, such as Bangalore Development Authority (BDA), Bengaluru

Mahanagar Palika (Bangalore City Corporation), Bangalore Transportation authority, Bangalore Agenda Task force, Census of India, and Department of

Information and Technology, Software technology parks of India, Bangalore and

NASSCOM, Delhi. The secondary data has been collected from various organizations on diverse indicators, such as the number of Information technology firms, call centers, software and hardware firms, business process outsourcing (BPO), real estate prices, number of educational institutes, research and development centers, number of civic amenities, workers, slums, literate and illiterate population, expenditure on infrastructure and revenue generated from

2002-2005 at the city and ward level (Figure: 1.1). The real estate land values were collected from secondary sources and Karnataka law publications for the year 1997 and 2001 and authentic websites like Bangaloreproperty.com. The infrastructure expenditure and revenue data was collected from 2002 till 2005 from Bangalore Mahanagar Palika or Bangalore City Corporation office in 16

Bengaluru. The researcher visited many non-governmental organizations like

Janagraha and Public Affairs Center.

Table:1.1 Data Sources

Primary Secondary Interviews Department of IT Field Observations Bangalore development authority Digital Images Software Technology parks of India Institute of Social and Economic Change Census of India, Bangalore

The primary data has been gathered by a well structured questionnaire,

interviewing various officials and visiting various governmental organizations,

educational institutes and software firms. Apart from the interviews, visits to

all the new urban infrastructures, such as the electronics city, technological

parks, research and development institutes, newly built malls and other urban

facilities has given a new stimulus to the research. I have also gathered

information through casual observation about how the city has transformed

spatially as well as socially (Clifford and Valentine, 2003). Casual

observations and field notes while visiting the firms and talking to the people

has facilitated the researcher concentrate on important issues and changes

(Clifford and Valentine, 2003) taking place in the high-tech city of Bengaluru.

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Methodology

Computation of data and its analysis has been done using softwares especially Arc view 3.2 and Arc map 9.1 and 9.2 , SPSS and GEODA. Digital camera facilitated for capturing the transforming urban and social landscape of Bengaluru. I have used diverse techniques to answer my research questions ranging from exploratory spatial analysis, cartogram, centrographic methods, spatial autocorrelation and multivariate regression. I also undertook some interviews and observations for supporting my statistical results and derived major themes which stood out as a result of the impact of high-tech firms on the transforming landscape of Bengaluru (Figure:1.2).

So firstly, to understand the spatial distribution of high-tech firms, I made choropleth maps using Arc map 9.1 and 9.2. These maps revealed the spatial spread of high-tech firms. Then to further exemplify the direction and strength of the firms, mean center and standard deviation ellipse were derived taking the high-tech firms in the study area using Arc GIS.

The mean center actually gives the average locations of a set of points. It is easily calculated when the coordinate systems are defined. As the mean center is basically derived by calculating the mean of the X coordinates and mean of Y coordinates of the high-tech firms. The coordinates for Bengaluru were derived using space stat and GEODA. The Mean center reveals the 18

center of gravity of the spatial distribution of 100 high-tech wards of

Bengaluru.

The mean center is closer to a particular ward if that ward has more high- tech firms than the other wards. The standard deviational ellipse is the standard distance circle which is an effective tool used here to illustrate the spatial spread of high-tech firms. The Standard distance ellipse is the logical extension of the standard distance circle and it captures the directional bias.

Mean center has been derived for many variables like population, slums, literacy and illiteracy to name a few to derive the center of gravity and

Standard distance ellipse for measuring the directional biases. Thus the standard deviational ellipse gives the direction of the growth of the high-tech firms in the study area. Therefore, the centrographic methods assisted in understanding the spatial cluster of high-tech firms, population and other variables.

Secondly, GEODA software is used to identify the spatial pattern of high- tech industries in the varied wards of Bengaluru (Lee and Wong, 2001) by calculating spatial autocorrelation. Spatial autocorrelation facilitates one to determine whether the high-tech firms have a clustered, random or dispersed pattern. Spatial autocorrelation is a method for detecting spatial patterns of distribution at both global and local level by taking into account both the location of units and their attributes. This helps one measure and test how clustered and dispersed are these high-tech firms in space with respect to 19

their attribute values. If spatial autocorrelation is positive, it reveals that firms

with similar characteristics tend to be located near each other, and if it is

negative, it suggests that the firms in that location tend to have unlike

characteristics or they are dispersed (Lee and Wong, 2001). This concept is

related to Tobler’s first law of geography: everything is related to everything

else but near things are more related than distant things (Tobler, 1970).

The spatial autocorrelation statistics which I have used in my research is

Moran’s I, also called the global measures of spatial autocorrelation, as one value is derived for the entire study area. But since the degree of spatial autocorrelation varies by location, so to further measure the spatial heterogeneity of spatial autocorrelation one has also to depend on the spatial autocorrelation at the local scale and that can be measured by a local indicator of spatial association (LISA) and local G Statistics (Lee and Wong, 2001). The LISA indicates local instability and the local deviations from global pattern of spatial autocorrelation (Anselin, 2003). Thus spatial autocorrelation facilitates the identification of the location of wards which are dominant in high-tech firms and helps understand their role and impact in the local economy.

Thirdly, to understand the impact of high-tech firms in creating intra-urban disparities, I have used multivariate regression to estimate a series of model taking the high-tech firms, literacy as an independent variable and real estate prices, number of slums and slum population, revenue and expenditure on infrastructure collected for four consecutive years from 2002-2005 as dependent 20

variables. I have used many models using various combinations as dependent and independent variables. In case of various wards, it becomes important to identify and test the presence of spatial drift in the relationships between these variables across the wards rather than assuming that there will be no differences.

As each and every ward has special characteristics and in particular it has allowed me to identify and map them.

While quantitative analysis revealed the intra- urban disparities within the

100 wards, the qualitative analysis helped comprehend the hidden themes which were revealed in the statistical analyses. As there are many social and cultural changes that are taking place in the city of Bengaluru for which there is no available data, so the researcher collected the data to give more depth to the study. The fifth stage involved visiting and surveying those wards which were the spatial clusters and outliers of high-tech firms demarcated by computing spatial autocorrelation and centrographic measures. Many structured interviews with 50 respondents representing all income groups (high, medium, low) and ranging from academicians, software professionals, real estate agents, business men and women, college graduates, retired people are conducted. I interviewed respondents from both high tech and non high tech wards.

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Table 1.2 Secondary Data Analysis

Techniques Soft wares Arc View 3.2,Arc Map

Mean Center 9.1 Standard Deviation Ellipse Arc map 9.1 and 9.2 Spatial Autocorrelation GEODA Regression SPSS

These respondents were selected after undergoing a detailed literature review and following the researcher’s preliminary visits to Bengaluru.

The main questions have been related to the respondent’s length of stay in Bengaluru, education of self and children, impact of Information technology in their everyday life, family system, expenditure behavior, status of civic amenities, impact (socio-economic) of multinationals, language use, and other related and open ended questions which helped the researcher identify the changes and derive the major themes which revealed the impacts of high-tech in the city and life of the people of Bengaluru. The researcher has also used many anecdotal evidences to capture and analyze the transforming Bengaluru. A content analysis of the interviews from all the respondents has been done to derive the visible and hidden themes (Hay, 2000). Major themes and issues were derived from all the fifty respondents and further categorized them, which helped capture the transforming image of Bengaluru. Thus, the research design is a combination of quantitative and qualitative techniques and has also used digital images in many cases to give the impressions of the transforming landscape and the rising gulf between the high- tech and the non-high-tech wards. 22

Outline of Dissertation

This research is divided into six chapters including Chapter 1 which gives an introduction to the research, study area, research questions, research design, significance and background of the study.

Chapter 2 reviews work done by other scholars in the field of high- technology, debates and define the definition of high-technology and present the importance of high-technology diffusing in developing world and creation of a high-tech city in Bengaluru, India.

Chapter 3 examines the changing urban land use of Bengaluru , it discusses the real estate change and how it has impacted with the rise of high- technology in high-tech, non- high-tech wards of Bengaluru.

Chapter 4 discusses the economic landscape of the city and emphasizes on case studies one each from an high-tech ward, non- high-tech ward, uprising high-tech ward and IT parks. It further delineates the economics behind the high- tech success of Bengaluru and how the government and its expenditure pattern and revenue led to create intra-urban disparities.

Chapter 5 reveals how the economic growth has led to the socio-cultural transformation of the wards of the city. It examines the demographic transition and the socio-cultural characteristic, such as literacy, slum, scheduled castes and scheduled tribes of the high-tech city. Finally it reveals how the distribution of high-tech firms have led to create socio-cultural disparities in the 100 wards of 23

Bengaluru and it lists and reviews the changes which the city has undergone and is undergoing.

Chapter 6 is the conclusion of the research, its contribution in the field of academia, to the people of Bengaluru and its government. It also delineates the challenges which the city of Bengaluru is facing and asks if the Bengaluru model of success can be an exemplar for the rest of the Indian states and other developing countries. It also outlines the limitations of the study and gives future research directions.

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Chapter 2

HIGH-TECHNOLOGY IN INDIAN CONTEXT

Introduction

Today, the world is globalizing and the term nation-state is a little irrelevant since the tastes of human beings have become analogous and are satisfied through the provision of standardized global products created by global corporations who owe no allegiance to any nation, state or place.

Another dimension of globalization has been the new phenomena of:

“high-technology, increased trade, concentration of capital, migration of people, development of advanced technologies, and changing values and norms”

(Marcuse and Kempen, 2000). Globalization has its appendages spread in all parts of the world and is shrinking the world through what might be called the functional integration of economic activities and increased international connectedness across firms and various manufacturing, quaternary, quinary and producer service sectors. While this phenomenon has led to an increased spatial interaction amongst various regions and people in different parts of the world, it has also led to an increased uneven development which can be observed in developed-versus -developing nations.

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25

A feature of the global economy is the dispersion of the economic activities across the cities of the world by spreading economic activities by what

Massey (1995) calls ‘spatial division of labor,’ where the decision-making jobs are retained in the developed nations and the routine jobs are outsourced to remote locations in underdeveloped nations, thereby, creating a core-periphery pattern of development.

There are contrasting views about the concept of globalization that it is creating socio-economic and cultural disparities, especially among the developing countries. The optimists are of the view that globalization is a great improver of the remuneration, but the pessimists view that it is creating disparities, segregation, declining standards of living and social welfare programs leading to uneven spatial development. Globalization is, in fact, a combination of high-technology with increasing trade and increased focus on economic control exerted by multinational corporations around cities which offer least-cost of production and markets (Short and Kim, 1999). An interesting question that emerges, then, is what high-technology is, how cities are impacted due to the presence or growth of high-technology, and how does this change the geography and development of the region? High-technology has reduced the distance and shrunk the world and made it more compact and dense. It has resulted in change which can be perceived all over the world.

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What is High-Technology?

High-technology has multiple definitions. It can be considered as a category consisting of particular industries or as a complex set of processes involving automation. Schmookler (1996) defines technology as the social pool of knowledge of the industrial arts. The Organization for Economic Cooperation and

Development (OECD) (1985) considers these industries to be high-tech: aerospace, computers and office, communication equipment, semiconductors, electrical machinery, pharmaceuticals and science instruments. Malecki (1983,

1997), on the other hand, views it as technological change administered by the construction of knowledge, its application and diffusion in the economy. He argues that the intensity of research and development and the technical workers in the work force are the best indicators of high-technology.

So the typical high-tech industry includes jobs in electronics, high-tech electronics manufacturing, software and computer related services, telecommunications, data processing, information services, biomedical, electro- medical services, research and development, percentage of technical workers

(scientists, engineers and technicians) and the degree of novelty and invention

(Atkinson and Gottleib 2001; Choi, 2003, Malecki, 1997). Later, Chapple et al.

(2004) defined high-technology as manufacturing and service producing industries with nine per cent of the workforce in science, engineering and computer professional jobs. Thus, there are many definitions of high- technology(HT), but in this research, high-technology is defined as a combination

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of information technology, hardware, software and services, business process outsourcing, computer chips, telecommunications, data processing and electronics industries, all of which are reasonably predominant in the city of

Bengaluru. Technology and technological progress has always been an essential factor in a region’s economic growth. Many empirical studies have been completed to understand the role and impact of high-technology in reconfiguring regional development. It is been revealed that cities with higher concentrations of skilled workers and professionals have high probabilities of high-tech agglomerations (Malecki, 1997).

Today, any high-technology city needs to satisfy the following conditions:

1) linkage with universities to provide highly educated and technically skilled labor, 2) a modern and developed infrastructure including effective telecommunication capabilities, 3) a cost effective transportation infrastructure connecting with national and international markets, 4) flow of capital to support a strong research and development base; 5) an attractive living environment and a good standard of living, 6) and last, it needs to have an assertive economic development force that comprehends how technology generates growth

(Edwards, 1999).In the modernizing world, leading cities are linked to one another by the flow of goods, information and people which forms a major part of the configuration of the world urban economic structure (Shin and Timberlake,

2000). The technological revolution today is centered on information technologies

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and is redesigning the society, creating a new bond among the economy, state and society (Castells, 1996).

Theoretical Framework of High-Technology

There are various theories and approaches of regional economic growth which emphasize that growth is a result of a combination of various factors, such as labor, technology, and knowledge. In today’s competitive world for maximizing production growth and efficiency, entrepreneurs are racing against each other. In such a pursuit, technology plays an influential role in increasing competition.

Technological change since the 1950s has been considered a major determinant of profitability and growth and still prevails and, in fact, has speeded the process (Sheppard and Barnes, 2003).

Recent literature on the geography of Research and Development (R and

D) locations has focused on the factors and mechanisms that explain the spatial dimension of High-technology and Research and Development. Traditionally, several regions in the world, such as Silicon Valley, Route 128 in USA, have been models of high-technology based regional development. There are several other high-technology regions in Munich (), Grenoble (), Western

Crescent (Great Britain), Kyushu () and Bengaluru (India) as models of

High-technology regions (Sternberg, 1996).

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There is disparity in growth among regions regarding the issues of innovation and adoption. The dominant theory of technology is emphasized by the triadic relationship between innovation, adoption and invention. Research and development (R & D) is also a crucial component of technological development. It is argued that technological innovation through a process of

‘creative destruction’ leads to increase in production and, hence, profits and new processes of production. A case is made that first with the adoption of technical innovations there would be an increase in production, but if the rate of innovation declines or slows down, it would impact the productivity. Hence, it is just not one factor but a combination of all factors that improves productivity. Technology plays a very important role and can attract new capitalists, but for the growth to continue restructuring, it is necessary which has an advantage from the technology and other innovations thus leading to creative destructions of old ideas and new ideas taking the form of technological change. Storper and Walker

(1989) have used technology as the main factor for explaining industrial growth.

They defined it as the general capabilities of human society to transform nature into useful products, using knowledge. They analyzed the broad aspect of technology and how it transforms regions and increases the productivity and leads to economic growth. Further, Harvey (2001) emphasizes the importance of

‘circulation of capital’ which keeps the production going. The circulation of capital symbolizes a healthy economy where surplus is produced and leads to positive growth. He posits the importance of how the capitalist mode of production is a

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technologically dynamic process as it creates competition and keeps competition alive amongst the capitalists. This process also leads to unemployment of labor and impacts the labor class and their life style (Johnston, 2000). Harvey highlighted how technological change and capital are intertwined as they play an important role since technological change requires investment. Hence, his view remains that to keep up with the supply of new technology there is a need of surplus capital and labor.

Storper and Walker (1989) also argued that technology is the result of fusion among “development of knowledge, economic necessity, and innumerable cultural and non- economic factors.” In the developed countries, the result of industrial revolution has been the rapid technological change and growth.

Technological change, hence, is a result of knowledge, better equipments and labor practices. They viewed that technical change is produced through practical activity and is shaped by the various structure of industries. It is argued that capitalism works on three core concepts, i.e. accumulation/investment, competition and technological change. Storper and Walker agree that the triadic relationship of production (innovation, invention and adoption) does play a very influential role, but they make a case that technological change functions under human labor (technology). Technical change emerges only where there is supremacy over human technological powers. Computer hardware and software industries are considered the savers, since they employ larger numbers of technically skilled labor, they are considered to be technologically sophisticated.

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Storper and Walker (1989) argued that any technological development is not possible without the human effort and defined technology as the art of transforming nature to human ends, which consisted of knowledge, equipments and practices that transforms human labor into a defined outcome. Marxists have very well taken into consideration that technology just doesn’t come directly from the lab, but it needs the input of human labor. A region can be developed anywhere with industrialization and technological development. Hence Storper and Walker (1989) considered that present day prices can never forecast where technology will become apparent in the future. Technological change is directly linked to the extent of investment in research and development.

Technology plays a dominant role in shaping the industrial spread as localization, clustering, dispersal and shifting centers are major factors in producing uneven geographical development. There is a drawback of technology, too, as argued by the Marxist as just spending on research and development of any technology will not yield results if that particular technology has no further prospect of development, and it has spread all over the world in a very uneven manner. Storper (1997) has highlighted two major schools of thought which explain the role of high-technology and regional development. One is the American school of High-technology regional development which explains the growth of Silicon Valley and Route 128 in USA, and second is the regional politics approach which has a critical reaction to the first one. As the authors of the regional politics approach didn’t agree that universities alone are a major

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factor for the high-tech agglomeration, but instead they emphasized the historic and political factors of the region matter as well. There are other contrasting views as well regarding the role of universities in generating high-tech growth.

Eto and Fujita (1989) also did not find that universities help foster high- technology firm growth and Choi (2003) confirmed that there is no one single formula which describes the growth of high-tech firms in a particular location.

Apart from the above mentioned approaches and theories of high- technology and regional development, a European approach has been developed by the GREMI (Groupe de recgercge europeen sur les mileux innovateurs) who are basically a group of Franco-Italian and Swiss regional economists group. They developed the concept of milieu. The milieu is a territorial version of embeddedness of social and economic processes. They emphasized that it is very circulatory as innovation occurs due to milieu and milieu exists where there is innovation (Storper, 1997). They view that technology is not new: it existed before, and it is a synonym for industrialization, and it is attached to various localities, such as homes and families. The various industrial classes provide a technological milieu which includes all the knowledge and various techniques of increased industrial production. They argue that to gain larger profits and to maximize the surplus, the capitalist will always become attracted to new technologies. But it also brings some important issues as it leads to over accumulation which starts the vicious cycle of overinvestment and debt, recession and depression and misery of the labor class.

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There is a new debate emerging about the rise of ‘creative class’ (,

2002) and the search for talent (Economist, 2006) which is becoming harder day by day. Florida (2002) mentions creative class as the new class which includes scientists and engineers, university professors, poets and novelists, actors, designers, research analysts, and other opinion makers inclusive in this class set. It is also elucidated that wherever there is abundance of creative class it is directly correlated with high-technology. It is also explicated that there are three

Ts of creative places and they are technology, talent and tolerance which become the core and super cores of regional growth and development.

This research has been motivated by the economic geographic approach of three scholars: Edward Malecki, Michael Storper and Richard Walker. Malecki

(1979 and 1985) has examined the location patterns of high technology industries in the US. He concluded the major reason for the attraction of high technology to large cities was the agglomeration economies and the ability of the city to sustain creativity at high levels. Storper and Walker (1989) in their book

The Capitalist Imperative: Territory, Technology and Industrial Growth propose a political-economic theory of geographical and territorial industrialization. They also attempt to make the concept of ‘spatial division of labor’ a more rigorous approach to explain the capitalist process of growth. They argue that new industrial districts such as high technology areas have a tendency to “leapfrog” in space, thereby establishing growth centers and new boundaries that are self- contained and are insulated from the existing development districts.

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Further Malecki (1997) states that the Indian economy has focused more on the internal market rather external market which has harmed India’s potential to exploit technological capabilities. Restrictions on technology imports and licensing during the 1960s-1980s were the prevailing policy and discouraged and delayed the potential of high technology center such as Bangalore to grow and mature in to today’s High-Tech city.

High-Technology and Regional Development

The high-technology industries are transforming the physical, economic, culture and the social setup of the cities. Hence, cities are becoming wealthy; opportunities are rising and multinational firms are increasing due to the availability of the various factors in that city such as investment capital, skilled labor, institutions of higher learning, good climate and transport infrastructure.

There are various controversies regarding the high-tech firms and their impact, but Glasmier (1987) observes that the high-tech industries do not only lead to the formation of various new Silicon Valleys but, in fact, give rise to production complexes which have experienced varying levels of economic integration and which is an attraction for the newly industrializing and developing countries.

However, high-technology not only transforms the region but also poses challenges for developing countries as they need to have appropriate infrastructure facilities (Udo and Edoho, 2000). Shachar and Felsentein (1992)

35

found that high-technology is located only in those regions which have the added local advantage, such as the availability of educational institutes.

High-technology not only results in increased growth but also increased inequity and impacted innovation especially in developing countries (Kaushik et al. 2004). Many developing countries are characterized by rapid urbanization, macrocephalic urban systems, high urban densities and various socio-economic and environmental problems (Lipton, 1997; Scott and Storper, 2003). As a result of these issues, high-technology may not necessarily bring the same level of benefits. There are dynamic benefits in terms of information technology as it increases growth especially in the field of education. Pohjola (2000) did a cross country regression analysis and found that information technology had positive impacts on the developed (OECD) countries but not in developing countries.

A very recent report by the OECD (Organization for Economic

Cooperation and Development), considered to be the guild of rich countries, revealed two major industrial shifts by analyzing the world’s 250 largest technology firm’s revenues. The first is there more predominance of software and service companies as compared to manufacturing and hardware companies

(which was the case in the last five years) and, secondly, the Asian firms are pushing aside the American ones which have shocked the global analyst

(Economist, 2006).

Today, state and local governments all around the world are playing a vital role in encouraging high-tech economic development (Choi, 2003). But the

36

developing countries need to be incredibly cautious in adopting and further adapting western technology. Socio-economic and cultural conditions in the host country are distinct and so the high-technology innovation may stress the existing urban and social infrastructure giving rise to a totally new mismash culture

(Melih, 1996). Rice (2003) has examined the need for concentrated efforts in human capital development in less developed countries or risk a widening gap between the developed and developing countries.

He posited five major barriers in less developed countries in the adoption of high-technology: economic, financial, organizational, institutional and human resources. On the other hand, the high-tech industries are generating and constructing regional disparities at the inter-regional and intra-urban level in terms of income, purchasing power, life style and other socio-economic indicators (Joseph, 2002).

High-Technology and Developing Countries

The transfer of high-technology industry to developing countries has become attractive to transnational corporations. Newly industrialized countries often offer a labor force that is both educated and cheap. The corporations retain the know-how and profit of their technologies and get the labor- oriented work performed at a lower cost. The diffusion of high-technology in many less developed countries in Africa, Asia, and Latin America was quite low in the early

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1990s, but with rising economic globalization, these countries are beginning to catch up with technology.

Currently, the companies from China, and India have appeared in 2006 ranking for the first time, and ’s number has been trebled according to the recent survey conducted by the OECD (Economist,

2006). Today, many of the less developed regions have emerged in Asian countries. , , Hong Kong, and Taiwan have become examples of such technology- induced transformations. At its brightest, high- technology is leading poor nations to prosperity as has been the case in China,

India and Malaysia (Chesnais, 1986; Malecki, 1997). Today China is considered to be the world’s largest exporter of technology goods (much of the job is on behalf of foreign firms). But it has been declared that at this moment, China has now become the world’s sixth largest buyer of high-tech goods and has been forecasted that by 2010 it will be in the third place following America and Japan

(Economist, 2006). China and India are the two Asian nations which are considered to be tomorrow’s technology titans, but there are discernible contrasts in their technological development. There are many challenges for both the countries before they reach the superpower positions. A survey of China and

India was done by Business Week (2005) where they compared and contrasted the strengths and weaknesses of both. They argue that, at this time, China and

India account for a mere six per cent of global gross domestic product, i.e. half that of Japan. However, it is, verbalized by Engardio that “the balance of power

38

will shift to the east as China and India evolve” (Business Week, 2005; Table:

2.1).

Table: 2.1 Percentage of World Gross Domestic Product in 2004, 2025 and 2050 Countries 2004(%) 2025(%) 2050(%) USA 28 27 26 European Union 34 25 15 Japan 12 7 4 China 4 15 28 India 2 5 17 Others 20 21 10

Data Source: Business Week, 2005.

High-technology has led to a decline in the manufacturing sector and has

increased the dominance of the service sector, not only in the Western World but

also in many Asian cities in addition to , Singapore, Hong Kong, Nanjing,

and . Consequently, this trend has impacted Indian cities, too,

especially Bengaluru in Karnataka and Hyderabad in Andhra Pradesh. A UNDP

study has identified Bengaluru as one of the world class technological hubs

which has, no doubt, emerged to pose a competition to the Silicon Valley (USA)

and various other centers in Europe and Japan.

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Table: 2.2 Digital Awareness in South Asia and developing economies

Internet Countries connections PC per 1000 India 16 7 238 119 46 49 98 82 44 28 230 106 Thailand 78 40 73 45 China 46 28 Ireland 271 421 2 3 10 4 11 13

Data Source: National Association of Software and Services Companies (NASSCOM), 2005

Thus, even after being one of the global leaders in information technology, the Indian economy has underinvested in information technology capital which is very unevenly distributed in the country. Regarding personal computers(PCs) and internet connections, India lags behind all the newly industrializing countries and when compared to South Asian neighbors, it leads in the number of internet connections and is second only to Sri Lanka in terms of number of PCs (Table

:2.2) .

High-Technology and Regional Disparities in India

India is a country with a population of more than 1 billion (Census of India,

2001). Almost 27 per cent of its population lives in poverty, but today it is

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becoming one of the information technology hubs of South Asia. India is an excellent example of how it is a success in software industry apart from poor infrastructure and education levels. India is a subcontinent with varying degrees of inter-regional and intra-regional disparities and inter and intra-urban disparities.

India attained independence in 1947 from the colonial rule. Since 1951 the Indian government has embarked upon the planning strategy for the country, and various efforts have been made by the Central and the State governments to tackle the socio-economic disparities at urban and regional scales (Fig. 2.5). A comparative analysis was done by Kurian (2001) of the fifteen emerging states of

India. These states represent 95.5 per cent of the total population of the country which are divided on the basis of socio-economic indicators into two groups, i.e. forward and backward. The forward group comprises the states of: Andhra

Pradesh, Gujarat, Haryana, Karnataka, , , Punjab and Tamil

Nadu, whereas the backward group consists of Assam, , Madhya Pradesh,

Orissa, , and . These two groups of states are at different stages in terms of the diverse socio-economic indicators. But as mentioned earlier, full efforts are being taken by the public and private sectors to minimize the increasing disparities. At the time of India’s Independence, more than 80 per cent of the population was engaged in agriculture which has now reduced to almost 60 per cent. Also, the percentage of people below poverty level has declined from 51.3 in 1977-78 to 26.10 per cent in 1999-2000 in India

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(Kurian, 2001). But, India still remains a poor country with almost 27 per cent of its population living below poverty level and with levels of human development that classifies India in the same category as Sub-Saharan Africa (Singh, 2004;

Kambhampati, 2002). Looking at India’s economic growth and urban landscapes today, one can find tremendous gaps and disparities at socio-economic level which provoked the researcher to take this topic for further research.

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Fig. 2.1 Inter-Regional Disparities in India

Source: Thakur, 2007

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High-Technology in India

Today, India is the second largest software producer and exporter (Fig:

2.3) after the of America and is continually marching forward to become an information society (Singh, 2005). It exports 63 per cent of its software to USA, 23 per cent to Europe and to other parts of the world (Fig.2.3).

India today has made its mark in the high-technology world by its high quality and cost-friendly squad of skilled knowledge workers which has been continuously rising from 6800 information technology workers in 1985-86 to 650000 in March

2003 (Singh, 2005).

7

6

5

4

Hardware Software

US$ Billion US$ 3

2

1

0 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 Year

Fig. 2.2 Hardware and Software Exports in India: 1995-2001 Data Source: Statistical Year Book of Indian information technology and Electronics Industry, 2000-2001.

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Rest of the world 5%

Europe 23%

Asia 5% USA 63%

Japan 4%

Fig. 2.3 India’s Software Exports Data Source: Software Technology Parks of India, Bengaluru, 2006.

45

30

25

20

15 US$Billion US$Billion

10

5

0 1997-98 1998-99 199-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 Year

Fig. 2.4 Growth of Indian IT and ITES (IT enabled services) 1997-2005 Data Source: NASSCOM, 2005.

In the midst of the triumph story of India becoming a favorite hotspot of multinational corporations, its domestic market has been greatly ignored (Fig.

2.3). Though the domestic annual spending has definitely increased at 14.78 per cent per year since 1997-98, but it still has been less than 38 per cent of the annual growth rate in its exports (NASSCOM, 2005)

As mentioned earlier, the distribution of HT firms is very uneven in India.

Bengaluru and Delhi are the two leading cities which are leading in the information technology industries followed by Mumbai, and Chennai (Fig.

2.5). The share of Bengaluru in total Indians export of software is remarkable. It has played a significant role in shaping the Indian economy (Fig.2.6).

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200

180

160

140

120

2000 100 2002 2003

No. of companies 80

60

40

20

0 Bangalore Chennai Delhi (incl. Hyderabad Kolkata Mumbai Pune Other Noida & Gurgaon) Cities

Fig. 2.5 High-tech industries in India: 2000-2003 Data Source: NASSCOM, 2005

47

8000

7000

6000

5000

4000 In ten millions 3000

2000

1000

0

u d ar ar ur tta a um ag aip Pune galur raba J Mohali Noida ndr Chennai de Kolk Mumbai a Ben y i riv andhin H T G Nav Bhuvaneshw Year

Fig. 2.6 Share of Indian cities in software exports: 2001 Data Source: Department of Information Technology, Bangalore, 2005.

There are discussions about why there has been a slow information technology growth in India and the three reasons which dominate are: firstly,

India’s economy is poor; secondly, apart from economic and trade liberalization, the imported hardwares are subjected to very high taxes which are quite visible with the rise in the price of PCs. This further reduces the business and decline in household information technology; thirdly, apart from government information technology polices, dealings are neither competitive nor transparent (NASSCOM,

2005). Another major weakness of Indian information technology is that it imports

48

high-tech gear and focuses more on software and services which require the least interference from the bureaucracy as compared to the physical goods.

The major hurdles according to National Association of Software and

Services Companies (NASSCOM) and a study done by Business Week (2005) reveals that information technology plays a vital role only in few developed states and creative cities of the country (Florida, 2002). Their growth just further deepens the existing disparities.

Table: 2.3 Region Wise Estimated Contribution of Export of Software and Services: 2000-2001

Exports in Region Million dollars East 119.57 North 1918.48 South 2987.39 West 952.83

Source: Statistical Year Book of Indian information technology and Electronics Industry, 2001-2002

It would be apparent from Table: 2.3 how well the different regions of India are contributing to the export of software and services. The southern states are leading followed by north and west. The east comprising of Bihar, Jharkhand and

West Bengal is contributing the least of all. Overall, there is a regional concentration of the HT firms and is limited in a few large cities, especially in the western and southern parts of the country. The rural areas are left out. Recently, there has been an increase in MNC all over India, emphasizing not only the call centers or the low level tasks, but leading to many research and development labs with concentration in Bengaluru (Taeube, 2005). Thus, one finds an uneven

49

clustering of information technology firms with most of them concentrated in

South India, i.e. Bengaluru, Hyderabad and Chennai, Western India, i.e. Mumbai and Pune , and in and around Delhi covering Gurgaon and Noida (Fig.2.7).

50

Note: Value in million dollars.

Fig. 2.7 Share of Indian States in Export of Information Technology 2005 Data Source: NASSCOM, 2005

51

This reveals that the southern states comprising of Karnataka, Andhra

Pradesh, and Kerala are the leaders in information technology export

(Fig.2.7). In fact, they have become export enclaves, and with the rising elite class, it is deepening the already prevailing inequality in the country

(Balasubramanyam and Balasubramanyam, 1997, D’Costa 2003; Vijayabaskar &

Krishnaswamy 2003) and keeps rising with the incoming of MNC in these regions

(Dossani 2002; Kapur and McHale 2002; Saxenian et al. 2002). It would also be evident from Fig. 2.7 that the state wise export contribution of information technology are the southern states of Tamil Nadu, Maharashtra, Karnataka, and

Uttar Pradesh and followed by other states of Andhra Pradesh, Gujarat and

Punjab. This reveals that there is a transformation taking place, especially in places like Uttar Pradesh where it has also one of the largest investments of R and D institutes and the results are discernible. There are many contrasting views regarding the growth of information technology in India, but the question can be argued whether they are just becoming an export enclave or do they really have a major impact on the local economy (Balasubramanyam and

Balasubramanyam, 1997)?

52

Fig. 2.8 Siliconization of India: A Home to Outsourcing

Source: Map Courtesy from Aspden, 2006.

53

It can be observed and argued that inter- regional disparities are visible not only at the export contribution and the location of high-tech firms but also at the number of engineering colleges which are dominant in the southern region

(Table 2.3 and 2.4).

Table: 2.4 Engineering Colleges in India

No. of Engineering Region Colleges Central 50

East 25

North 140 West 140 South 308 Total 663

Data Source: Arora and Athreye, 2002.

The availability of information technology agglomeration in southern India seems to be related to the abundance of skilled labor (Aranya, 2003). But, apart from this, it seems to be related to inter-regional disparities. Every year India produces around 2.5 million university graduates including 400,000 engineers and 200,000 information technology professionals (Economist, 2006). Therefore, these facts reveal that there is a strong correlation between education and high- technology performance of these regions, and there is a hidden impact of this milieu which is being created in these regions. But amongst all these regions, the major cities of India, Bengaluru, Mumbai, Delhi and Chennai, are the ones which have essentially become the hubs of software industries (Figure 2.8).

54

The government of India has played a significant role in shaping the export landscape of information technology in India. It has instigated the process of economic reforms through the policies of globalization and liberalization. This economic energy is picking up, and India is becoming a nation on the move. This is evident from Figure 2.2 which indicates that the share of exports of software has increased from 3.5 per cent to almost 18 per cent in less than a decade

(Electronics and Computer Software Export Promotion Council, 2000-2001).

There has been a drastic increase in gross domestic product with the rise of the information technology sector. It has grown over the six year period by a factor of

9 whereas the GDP has slightly doubled. Currently the Indian economy is in its fourth successive year of growth at around 8 percent. Additionally, in the first two quarters of this year, the GDP grew at rates of 9.3 per cent and 8.9 per cent over the same phase in 2005.

The 1991 liberalization policy has also transformed the business face of

India. Now, the objective of Indian companies has become go global. The new trend of the Indian firms is purchasing western establishments (Economist,

2006). The main motivating force lies in the combination of three: firstly, a domestic boom; secondly, a rush to achieve global scale; thirdly, a new self- confidence which is inspiring the Indian entrepreneur to attract more investments and managerial value (Economist, 2006, 69-70).

The Ministry of Communications and Information Technology has started a non-profit society to promote and facilitate software exports from India. Set up

55

in 1991, it is called the Software Technology Parks of India (STPI). STPI has three main focuses: establishing and managing the infrastructure resources, such as the data communication facilities, promoting development and export of software services and training professionals, and encouraging design and development in the field of software. The STPI started with three autonomous societies at Pune, Bengaluru and Bhubaneswar and later merged to one organization. Today, it has spread to approximately 39 cities (Fig. 2.9), and many have been constructed in a very short span of time--two years (STPI, Bengaluru,

2004).

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Fig. 2.9 National centers of software technology parks of India Source: Software Technology Parks of India, Bengaluru, 2004

Why High-Technology in Bengaluru?

Over the past two decades, India has become one of the world’s leading centers for information technology and is pulling in various multinationals and foreign investments from all over the world. A World Bank (1992) study reports that almost 30 major software companies located in US and Europe favored India and especially Bengaluru as compared to other emerging markets like China,

Mexico, and for their onsite and offshore development. Today

57

Bengaluru has become the most sought after high-technology center in India

(Rosenberg, 2002).

Historically, Bengaluru has been one of the largest trading and manufacturing centers in South India even before the British period. After independence in 1947, many new schemes were launched by the Central and

State governments and it was later acknowledged as the science and technology capital of India. One major reason for the emergence of Bengaluru as a center for manufacturing after Independence was to locate strategically susceptible industries away from borders and coastlands. Hence, it was selected as a location to establish the base of the Indian air force and other major industries concentrating in major textile mills, silk industry and aircraft industry and many other public undertakings.

The employment in Bengaluru has remained service oriented rather than manufacturing which is also reflected in the composition of gross domestic product of Karnataka. Today Bengaluru is facing a drastic change with the rapid growth of software and computer industry and is acting as a magnet attracting software multinational companies from all over the world (Schenk, 2001). Hence,

Bengaluru plays a prominent role in international electronics, telecommunications and information technology contributing almost 40 per cent of India’s production in high-technology industrial sectors (Madon, 1997). The major factors of attraction for the MNC to locate in Bengaluru will be discussed in the next few paragraphs.

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Geographical Factors

Bengaluru has favorable climatic conditions. Temperate conditions are neither too hot nor cold which makes for a year round pleasant climate and adds to its charisma. The historic gardens are also a pulling factor for the foreign investments in the city. The study area and geographical conditions of Bengaluru is further discussed in detail in chapter three.

High Standards of Science and Technical Education

Bengaluru has very high quality technical and business schools, such as the Indian Institute of Management, Indian Institute of Science, Institute for Social and Economic Change, and Bengaluru University. The university trains software engineers and business graduates with technical and engineering knowledge and skills (Patibandla, 2002). The University is a key institute of the creative economy and is an effective contributor to regional growth (Florida, 2002). The

Bangalore university is truly magnetic and is attracting talent, technology and creating a climate for growth which is booming in the high-tech city of Bengaluru.

In fact, the Indian Institute of Science is a world class scientific research facility which was founded in the year 1909 (Patibandla, 2002). In addition, the city boasts of its Indian Institute of Management, 14 Engineering and 47 Polytechnic schools which have played vital roles in training the labor force with technical knowledge and skills. This has indeed attracted the MNC’s to the city of

59

Bengaluru where they get a pool of English speaking and skilled labor force to work in these international firms.

Infrastructure Facilities

The State Government has played a vital role in improving its infrastructure and is visible in the sector of information technology. The

Karnataka Government has announced its own infrastructure policy in the year

1997, which invested almost $20 million Rupees in improving power, roads and water supply (Madon et al., 2001). Today, it has a strong telecom and electronic base and contributes over 32 per cent in computer hardware and about one-third of software exports from the country.

State Government/Public and Private Partnerships/Role of Mahiti IT Policy

The State has provided the facility for establishing various software technology parks and in keeping the MNCs attracted in Bengaluru (Benjamin, 2000). Various public and private partnerships have also amplified the process of creating many Information Technology Parks, such as Space City and Cyber Park. Especially, the Karnataka Government had a vital role to play as in 1996 it became the first state to come out with the information technology policy which has motivated many other state

60

governments of the country to adopt information technology policies. It has, no doubt, played an influential and domineering role in making Bengaluru the high- tech city. The software industry of India has attained the global recognition because of the timing of the policies and the simple procedures which were laid down by the government. The industry responded to it also in a very positive manner. The software industry in Bengaluru has resulted because of the combination of the partnership between the government and the industry. To mention a few, the main objectives of the millennium information technology policy are to utilize the power of information technology in the removal of poverty, empowering women, to reduce unemployment by absorbing the educated youth into the information technology industry (Department of Information technology,

Bengaluru).

Human Resources

India and especially Bengaluru is considered to bring advantages to the information technology market. They are the ones who happen to work when the west sleeps and they speak splendid English (Economist, 2006, 9). English speaking information technology professionals have been a great source of attraction as English is the lingua franca of the country. Bengaluru’s literacy rate is quite high, around 81 per cent according to the 1991 census as compared to the national average (52 per cent) which makes it more attractive as a business

61

center. The lack of a strong local labor movement and the availability of well qualified and cost effective talent has been a centripetal force for various transnational corporations to get attracted to Bengaluru. No doubt, the core of the success of information technology and outsourcing are the lower salaries for college graduates, and they are the cause of success of these national and multinational firms (Economist, 2006).

Real Estate Boom

The city of Bengaluru became popular in the late 1980s and mid

1990s with its real estate boom. The developers from Delhi and Mumbai invested in Bengaluru to transform large plots with colonial bungalows into multi –storey apartments. They were, in fact, to serve the high income, wealthy and rich class.

Several investors from other metropolises were investing in real estate for land and house values to appreciate for potential future sales. Hence, the corporate and executive image of Bengaluru was in the making in the early 1990s. A comparative study of Bengaluru and other large cities, such as Delhi and

Mumbai, show that the land rents are low in Bengaluru and hence that has a strong appeal. Many interesting issues need to be probed. How are the high- tech firms in Bengaluru changing the image of Bengaluru? How are they impacting the city socially, economically and culturally? Will the Siliconization of

Bengaluru bring unity, economic growth and raise the social standards or lifestyle

62

of the people? Or will Siliconization further tighten the already existing gap between the rich and the poor?

****************************************************************************

CHAPTER 3

URBAN LAND USE, REAL ESTATE, AND HIGH TECHNOLOGY

Introduction

This chapter discusses real estate development and its prevalence in

India, highlights changing structure of urban land use in Bengaluru from 1895-

2001, and elucidates the impact of high-tech revolution on the real estate prices in different parts of the city. The liberalization policy in 1991 has opened the doors for multinational corporations and the rise of private investors responsible for the created space. It also focuses on new types of infrastructural and architectural transformations which have taken place in Bengaluru landscape, like the rise of the retail sector, construction industry and the real estate boom.

There has been a simultaneous rise in the development of posh and luxurious residential suburbs, and information technology parks which are spreading on a large scale. It is recognized that high-tech firms are not the sole factors but the results are unintentional. Such creation of urban landscapes which continue to grow in popularity are not entirely understood.

63

64

Growth of Bengaluru

Bangalore or Bengaluru took birth as a tiny village in the 12th century. As

mentioned in the earlier section, the change of Bangalore to Bengaluru is not a

new name, as the former was the anglicized form of Bengaluru. There is a

popular belief that Bengalu is derived from the word Benda kalu (boiled beans)

and uru means a town.

There is a story associated with the Hoysala King Veera Ballala II in the

12th century, who was hunting and got lost in the jungle. After long hours of

wandering, he happened to reach an isolated hut, where an old woman offered

him cooked beans so he was pleased with her hospitality. There the king

established a small township, located to the north past Kodeigehalli, and is now

known as old or hale Bengaluru named Bedalaooru (the town of boiled beans); today’s Bangalore or Bengaluru. Nevertheless, the foundation of modern

Bengaluru is attributed to Kempegowda I (1537), the scion of the

chiefs (Census of Karnataka, 2001). The history of Bengaluru has a very

significant role to play in its socio-cultural and economic success of today. The

city basically consisted of two major parts: one was the city proper on the

western side, called the pete and the cantonment (Bengaluru) on the eastern

side. The western part was founded by Kempegowda I in 1537, who built a mud

fort and later his son marked the city boundaries by erecting four watch towers

(Fig. 3.1). But, today, Bengaluru has grown well beyond those four towers into a 64

world famous metropolis, whereas the eastern side was established by the

Britishers at the beginning of the 20th century and was an attractive spot for the

retirees due to the pleasant climate (Census of India, 2001).

The eastern part of the city also attracted population by trade and other

employment opportunities and even today the Information technology corridor is

more dominate towards the eastern part of the city as compared to the west.

In 1862, two municipal boards were formed; one was for the city and the other for the cantonment. After independence in 1949, these two municipalities were

merged under the Bengaluru City Corporation. The city of Bengaluru can be traced through three phases of development from 1600-1800: formation of

Bengaluru as a fort, settlement market (Pete), and a large pond or a tank

(Srinivas, 2004). This researcher completely agrees that Bengaluru is indeed a

tale of two cities: western part, i.e. Pete and is referred to as Bengaluru and the

eastern part or the cantonment is considered no more than two centuries old

(Nair, 2005; Fig. 3.2). In 1949, the city and the cantonment were brought under one single administration but their integration into one city still seems to be a far dream.

65

Fig. 3.1 Birth of Bangalore/Bengaluru City: 1597 Data Source: Shashidar, H. (Census of India, 2001)

66

The visit to Bengaluru reveals that the western part of the city is still quite similar or could be easily compared to a small town of any state like Bihar or

Uttar Pradesh, whereas the eastern, especially , Airport,

Electronics City and International Technology Park Limited (ITPL) in Whitefield, and in the southeast, Jayanagar and Koramangala look like any emerging

Western city or the Silicon Valley not only in physical infrastructure but they also have the land use pattern and layout of commercial establishments. Nair (2005) argues that there are two distinct linguistic, political and economic cultures and their spatial identities are, still, an unfinished task. Bengaluru has spatially developed and the central business district has been continuously expanding horizontally (Fig. 3.2). 67

Growth of Bengaluru: 1537-2001 Fig. 3.2 Data Source: Shashidar, H. (Census of India, Karnataka, 2001) 68

The concept of Urban Agglomeration was introduced in Bengaluru by the

Census of India for the first time in 1971 and since, then, it has been expanding and increasing its constituent units (Fig. 3.2). Finally, Bengaluru and the cantonment, in the year 1949 merged into one Bengaluru City Corporation (BCC) which is a part of Bangalore/Bengaluru Urban Agglomeration. The Bengaluru

City Corporation started with just seven divisions in the year 1949, but later increased to 60 and in 1971 and 1981, it had 63 divisions. But in the year 1991, it increased to 87 and now in the latest 2001 census, it has reached to 100 wards

(Census of India, 2001). This research study area includes the 100 wards of

Bengaluru and also includes the two high-tech parks, i.e. Electronics City and

Whitefield which doesn’t come under the 100 wards but under Bangalore

Development Authority.

Recently, with the change of Bangalore to Bengaluru, on 1st November

2006 came another change, and it was the constitution of Bruhat Bengaluru

Mahanagar Palike (BBMP, Greater Bengaluru municipal body) on 2nd November

2006 and became effective from 16th January 2007. The Bruhat Bengaluru

Mahangar Palike is formed by merging the existing area of Bengaluru City

Corporation (study area, 100 wards) and eight urban local bodies and 111

villages of Bengaluru Urban District (City Development Report, 2007). The

reason behind the increase in the number of wards and municipal boundary has 69

been the rising population of Bengaluru, centrifugal forces of the city and its transformation from a garden city to the high-tech capital of India.

Urban land use

Bengaluru has transformed from the garden city to high-tech capital of

India. There is a rich accountable history of the transformation of urban architecture. The change has altered gardens, small settlements, ponds, high rise residential buildings, hotels, and luxurious recreational sites to City

Corporation and now to the high-tech parks (Srinvas, 2004). The city has expanded by causing loss of prime agricultural land, encroachment and increasing the built- up area.

Hence, land use in the city of Bengaluru has evolved through time with historical forces, supply of land, economic demand and technological stage.

These factors either combined or individually have determined the patterns and trends of land use. At local level, the micro site conditions of the ridge and valley topographic features have also shaped the intensity of land use. Every site has areal variations with land use and this relationship is determined by the ability of the user to pay for it and derive maximum utility.

The urban land use of the city in 1895 was spatially organized around two nuclei where population was concentrated and was the city near the Pete (Fort) and the general bazaar near today’s MG Road of the city (Fig.3.3). The low 70

density bungalows were more scattered near the central business district (CBD), in the south and south- east. The city had more of green spaces and tanks which added to the city’s image.

Urban Land Use in 1895 Fig. 3.3 Source: Shashidar, H. (Census of India, Karnataka, 2001.)

71

The pattern of urban land use has changed since 1891 till today and there were many social and economic forces which have shaped them (Fig.3.3). From the years 1895-1951, enough land was allotted to parks, huge compounds and parade grounds and one could observe dense population concentrated in the

Pete and general city area. The rest of the city was sparsely populated with much open space rightly called the Garden City.

Today the Bangalore city corporation has a population of around 4.5 million accounting for almost 76 per cent of the total population of Bengaluru urban agglomeration (BUA). The concept of Bangalore urban agglomeration was introduced in the year 1971 for the first time which included many constituent units including the Bangalore city corporation as the population kept growing.

72

Bengaluru Land Use: 1951

Fig. 3.4 Source: Venkatarayappa (l957)

In the year 1951 and 1961, i.e. after independence (1947), the city grew outward (Fig.3.4). Prakasha Rao and Tewari (1979) emphasized three types of outward spread; 1) extension and residential quarters along the radial roads and commercial land use; 2) leapfrogging establishment by few public sector industries like electronics and aircrafts; 3) leapfrogging of educational institutes like Bangalore University which is engulfed with infilling of residential and commercial land use. 73

50

45

40

35

30 1961 1972 1981 25 1983 Percent 1990 20 2011

15

10

5

0

l l e tia ia ion n rc blic e u fence id i p s spaces e mme Industrial gricultur o sportat A R C n d Sem ra n T a lic b Unclassified/de Pu Parks and open Land use

Changing Land use in Bengaluru: 1961-2011

Fig. 3.5

Data Source: Prakasha Rao and Tewari, 1979 and Revised Comprehensive Development Plan (1995, 2005) Bangalore Development Authority, Srinivas, 2004.

Fig. 3.5 reveals the changing land use pattern of Bengaluru, from 1961-

2011. It shows an increase in land allocated to residential use from 1990 to 2011 and was truly marked as a best place to live. But, surprisingly, the allocation for commercial land doesn’t show major changes. Whereas, land under transportation use shows decline which leads to the question: why is there a decline in land use under transportation? One would assume it should be really higher when the high-tech firms are being located in the suburbs, i.e. in 74

Electronics City and Whitefield. Even the industrial land use has declined after

1981, due to shifting emphasis on the high-tech industries and software parks.

However, land allocated to the parks and open spaces has increased, which indicates that Bengaluru’s cultural and social demands and living styles are rising. The middle class today are not satisfied with mere basic necessities, but in a true sense, they are becoming self made millionaires and a consumerist society.

Urban Land Use of Bengaluru: 2004 Fig. 3.6 Source: Revised Comprehensive Development Authority, 2004

75

Fig. 3.7 Different cores of the city of Bengaluru Source: Revised Comprehensive Development Plan 2015, 2004

76

Fig. 3.8 The future growth cores of Bengaluru

Source: Courtesy map from Revised Comprehensive Development Plan 2015 Bangalore development authority, 2004.

Thus, like many other Indian cities, Bengaluru also combines a deep- rooted historical heritage with colonial and post-independent forms. One can argue after a review of the land use from 1895 till today that the land use is spatially organized around three focuses: city market, cantonment and high-tech dominated corridor area (Fig. 3.2). There is civilizational unconformity among three nodes with respect to business functions, demographic structure, social ecology and transportation facilities. Among these three nodes, leapfrogging development has taken place, such as public sector undertakings, industrial 77

establishments, educational institutions, high-tech firms, residential localities, shopping complex, transport center, traffic flows and slums. The growth pattern of land use reflects the outcome of the urbanization process under different periods which have been elaborated and discussed in the previous sections. The three focuses are interdependent for various socio-cultural –economic and political functions which tie them together.

The Bangalore development authority has recently demarcated the land use of Bengaluru into five zones: The 1st zone is Core area or the central

business district which includes the traditional core, administrative center and the

Central Business District. It includes from industrial region to

Koramangala and has good infrastructural facilities. The south and west part of

the city has mixed and commercial land use. The 2nd Zone is the semi peripheral

area which includes old but planned residential areas. The 3rd zone is the

shadow areas or the recent extensions of the city (past 3-5 years) extending from

both sides of the outer ring road and this area lacks in infrastructural facilities.

The 4th zone also called as the new layouts. They have recently developed in the

peripherals of the city which has some vacant and agricultural lands. Many areas

in the periphery, some legal and illegal, have developed near the Hour Road,

Whitefield (ITPL) and Yelahanka,

This is the area where the Bangalore development authority and

Bangalore metropolitan regional development authority are allotting lands for

developing information technology parks, tech malls and excellent luxurious 78

apartments with all infrastructural facilities. The 5th zone is the green belt and

agricultural area in the outskirts of the city which includes many small villages.

This region is also attracting urbanization and rise of new cities, a spill over impact of high-tech zone (Figures: 3.6, 3.7, and 3.8; City Development Plan for

Bangalore, 2006).

Real Estate in India

Real estate is a great business and is booming in all parts of the world.

Cultural and economic globalization has made real estate more global, modernized and very competitive. Real estate is a multifaceted business which involves various activities from the purchase of land, construction, renovating and sale of land to others. The real estate developers are the ones who create, imagine, fund, and coordinate the process of building from the beginning to the end. Especially, after the rise of high-tech firms in late 1990’s, the real estate land prices have increased and many new developers are making residential and commercial complexes at international standards due to the clientele and rise in money. Thus, the land use has drastically changed in the past hundred years but the most vital change has been observed after the growth of high-tech firms.

India is a land of heterogeneity, not only in terms of language, religion, topography, economic and social conditions but also in real estate. With the opening of Indian economy in 1991, it has brought drastic change in the Indian 79

cities which led to urban restructuring and change the built- environment (Shaw and Satish, 2007). Real estate in India has transformed drastically; it is getting organized and has emerged as an industry with a lot of investment at stake. A recent study by Associated Chambers of Commerce and Industry of India on the future of the real estate investment in India revealed that the real estate market is around US$16 million and is expected to rise by US$ 60 billion by the year 2010.

There is no doubt that the real estate in India is booming, and all the credit goes to the rising economy and the government of India, especially when it opened the construction and development sector in February 2006, and allowed 100 per cent foreign direct investment which led to the rise of foreign investors (www.ibef.org).

This real estate boom has attracted many foreign players, such as American

International Group, High Point Rendell, and many international realty agents like

J.P. Morgan India Realty. Peninsula Realty and Horizontal International have become interested in Indian realty projects and are a great success (The Hindu,

2007). Jones Lang LaSalle in its report reveals the risks in Indian real estate, which could be reduced by a careful selection of location and segments like residential, commercial and retail. It also forecasts that suburban offices, retail and residential sectors are likely to offer the greatest opportunities over the short and long-term periods (Sinha, 2006).

The success of real estate is also credited to its openness to transparency which has contributed to the rise of domestic and financial institutions which finance 80

real estate developers (The Hindu, 2007).But one cannot undermine the local and global forces acting in the restructuring of the Indian cities.

Population growth has also led to a direct impact on the goods and services which has led to the creative extension of the city (Shaw and Satish,

2007, 149). It is indeed difficult to measure and separate the global influences on the growth of Indian cities. But, today, the high-tech firms, automobiles, pharmaceuticals, bio-technology, hotels, and recreations are transforming the urban landscapes which also create demand for more office space and technology parks (Shaw and Satish, 2007).

To argue that real estate and high-technology are directly correlated wouldn’t be wrong. The information technology has been the major push factor for the rise in the real estate sector. The demand includes not only office space from information technology firms, but also from Business Process Outsourcing, and they, currently, account for the largest absorption of land than basically any other city (Business World, 2006).

Real estate and retail further deepen the gulf among Tier I, Tier II and Tier

III cities (Just, 2006). Delhi, Mumbai and Bengaluru are denoted as Tier I, whereas Hyderabad, Pune and Chennai as Tier II, and Kolkata, Nagpur,

Ahmedabad and other million cities as Tier III cities (Just, 2006). These cities are divided into these three tiers on the basis of urban development, urban population, and contribution to the Indian economy. The expected returns on the investment are going to rise around 13-19 per cent in Bengaluru, as compared to 81

the others and the least in Chennai (Table: 3.1). There has been a great investment in the metropolises.

Table: 3.1. Expected Returns in Investment in Real Estate in Indian Cities: 2006

Investment returns Cities (% per year) Delhi 11-18% Mumbai 12-18% Kolkata 12-17% Chennai 10-15% Bengaluru 13-19% Hyderabad 10-14%

Data Source: Just, 2006

The growth and demand for office space has dominated and doubled in

the past three years especially in the metropolis of Delhi National capital region

(Gurgaon), Bengaluru, Mumbai, Kolkata and Chennai (Business World, 2006).

The growth is not limited to big cities alone; it is quite visible in the small cities

like Shimla, Mussoorie and Dehradun since the multinational corporations are

making resort and vacation homes in the hill stations as well. Another impact of

the rise in real estate price in the metropolis is the rising gulf among Delhi,

Mumbai and Chennai as they have created a spillover impact in the smaller

cities.

The emergence of Gurgaon near Delhi, Pune near Mumbai, Mysore near

Bengaluru are a few to mention. The rise of real estate demand for commercial

and residential space has led to the construction boom, and to the demand of

building materials like cement, steel and related ancillary industries. This 82

pressure has raised the land price of not only commercial but also residential properties (researchandmarkets.com).

3.5

3

2.5

2001 2 2002 2003 2004 2005(E) 1.5 2006(P) In million Square Feet In million Square

1

0.5

0 Mumbai Pune NCR of Delhi Kolkata Hyderabad Chennai Bengaluru Cities

Real Estate Acquisition Spree by Business Process Outsourcing 2001-2006

Fig. 3.9 Data Source: Business World, 2006

Fig. 3.9 reveals that the office space consumption by business process outsourcing is greatest in the city of Bengaluru, followed by Mumbai, Pune and

Chennai. Thus, high-tech firms have not only led to great demand for the office space, but also for the number of housing units. Research done by real estate international companies reveal the focused trend in India: 1) financing new 83

satellite cities; 2) retail shopping malls, and 3) residential localities. These are the three major areas where real estate in India is heading and is quite successful.

Various initiates like India property forum, real estate educational institutes and the government have formed a confederation of real estate developers association of India. This association controls the activities of the organized real estate (Malhotra, 2007). It also leads to regularization in the market which enforces more security and confidence in the real estate sector in India.

The real estate sector in India is expected to witness an exorbitantly high price rise. A study by a US - based NAI, an international company which is a commercial real estate and consulting service, argues that there is going to be a demand for more than 200 million square feet of office space in the next five years (Business Line, 2004). The high-tech firms have opened up doors for more office space in India, especially in Bengaluru. According to an estimate by Jones

Lang LaSalle (2005) a real estate agency, around 70 per cent of the office space have increased by 7000 high-tech firms in India. A recent survey on real estate trends by Merrill Lynch, an international renowned realty agency, declared that the number of shopping malls in Mumbai, Bengaluru, New Delhi, Hyderabad and

Pune are going to rise to around 250 by 2010. The leading malls are in Delhi and Mumbai followed by Pune, Bengaluru and other Indian cities (Fig. 3.10).

Many specialized malls are coming, e.g. the Gurgaon Mall is going to be the biggest in the world, and an Auto Mall is in the process of being built in the suburbs of Delhi and Bengaluru which are going to be an exclusive furniture mall. 84

120

100 96

80

60 No. of Malls 55 Number

40

19 20 14 12 10 6 7

0 Delhi Mumbai Bengaluru Chennai Kolkata Hyderabad Pune Cities

Number of Shopping Malls in 2008 Fig. 3.10 Data Source: Just, 2006.

The rise in population, urbanization and transforming socio-economic

patterns in the developing countries has led to a great demand for housing

(Sivam, 2002).The dominant factors in the housing shortage, apart from rising

population are: 1) rise in disposable income; 2) rise of middle class

entrepreneurs; 3) affordable home loans; 4) level of urbanization; 5) return of

expatriates; and 6) rise of money in younger age group. Apart from the

aforementioned factors, there are some constraints, too, which hinder the ability

and willingness to spend on housing and getting financial assistance. The major

constraints which have affected the efficiency of residential market and land delivery for housing are finance, affordability, land tenure, legal system and the 85

government policies and regulations (Sivam, 2002). Amongst all the Indian cities, Delhi, Mumbai and Kolkata face acute shortages followed by Chennai,

Ahmedabad and Bengaluru since Delhi, being the capital city and a Hindi speaking hub, attracts people from all the neighboring states which all are in a

Hindi speaking belt. Mumbai is the financial capital and the commerce capital of the country and home to Bollywood (Hindi) film industry and often can be called a creative city. Kolkata is also a presidency town like Mumbai and thus attracts people not only from the eastern Indian but also from the north eastern states and neighboring countries like , Bangladesh, and (Fig.

3.11). Thus all the above three cities face extreme shortage of houses. Chennai and Bengaluru are the upcoming high-tech cities and are a magnet for professionals and software workers from all over the country and the world thus leading to shortage in housing. 86

3000

2500

2000

Total household 1500 No. of Houses Housing Shortage Congestion factor Numberthousand in 1000 Obsolescense factor Total shortage

500

0

i i d u d lh a r a ne bai) na lu u De n ab m ga d P Kolkata he erab n C e me B h ay(Mu Hyd b A

ter Bom a e Gr Cities

Housing Shortage in Indian Cities: 1991 Fig. 3.11 Data Source: Central Statistical Organization, 1997

87

45

40

35

30

25 Best quality of life Number Best Infrastructure 20 Most Courteous people Most Cosmopolitan Women feel safe in 15

10

5

0 Bengaluru Mumbai Kolkatta Delhi Chennai Cities

Good Life Index of Indian Metropolises Fig. 3.12 Data Source: Indian Market Research Bureau (www.fernsbuilders.com)

It is not only the location and price, but also the quality of life in Indian

cities which plays a vital role in attracting foreign direct investment, multinational

corporations and domestic firms which further impact the real estate prices.

Recently, a global level survey of cities was done by the Worldwide Quality of

Living Survey in 2007 by Mercer Human Resources Consulting. The survey

revealed that Bengaluru and Mumbai topped as compared to Delhi and Kolkatta.

The Indian cities need a makeover of its civic amenities and infrastructural

facilities. Thus, the Government of India has started the Jawaharlal Nehru

National Urban Renewal Mission to improve the urban infrastructure of selected

63 Indian cities. This is a great hope not only to the people but also the 88

future national and international investors in the city (Deutsche Bank Research,

2006).The Government of India has selected Bengaluru as a Category A city for assistance under the Jawaharlal Nehru national urban renewal mission.

Real Estate and High-Technology in Bengaluru

High-tech has transformed the real estate and is prevalent today in all the metropolises of India. The information technology revolution has created the best period for Indian realty. The domestic RE industry is expected to grow from $12 billion to $50 billion by 2010 suggests a study by Merrill Lynch (Kulkarni, 2006).

The rise of call centers, business process outsourcing and other information technology -related jobs has ascended to more than 7,85,000 not sure what this number is new jobs in the country. New commercial real estate has drastically transformed the construction of new shopping malls all over the country. The main factors responsible for the rise of real estate in Bengaluru is the information technology boom, openness of liberalization policies, rise of disposable income in the younger age group (18-40), rise of outsourcing which has further led to a more consumerist society, and rushing to be more globalized in the name of development. Bengaluru was a great attraction spot for the multinational corporations because of high real estate prices in other cities like Mumbai and

Delhi, but now the scenario is changing and the information technology firms are moving to Tier 2 cities like Pune, Gurgaon and Hyderabad. The high-tech firms 89

have transformed the real estate in design, architecture, price and space effectiveness in Bengaluru and other high-tech cities of the country.

The rising demand from information technology is transforming the urban landscape of Indian cities, especially the commercial, which is further impacting the residential price. The demand for urban land has been escorted with rising land values. The land price has tremendously increased during the past 30-40 years. The analysis for the 35 year period from 1950-85 shows that the registered land price of cities has increased by almost 42 per cent (Mitra,1990).

The cosmopolitan history of the city including rise in its population and migration has played a vital role.

Housing Shortages

The rise of multinational corporations and the new economy, especially after 1991, has produced a new middle class with increased purchasing power.

This has moved them to buy more properties, increasing consumption and subsequent demand for luxurious housing (Vaidya, 2006). Figure 3.13 illustrates the need for houses since 1961, but the shortage has increased more from 1991 to 2001, presumably, with the economic liberalization in the Indian economy and the rising information technology firms in Bengaluru

90

1800000

1600000

1400000

1200000

1000000 Houses required No. of House available 800000 Number of houses of Number

600000

400000

200000

0 1961 1971 1981 1991 2001 2011 Year

Housing and its Shortage in Bengaluru 1961-2011 Fig. 3.13 Data Source: Comprehensive Development Plan, 2004

The shortage particularly in residential areas may impact the land values and also the housing styles. Therefore, more residential apartments are visible as compared to single storey; consequently, many people have converted their homes from single storey to multi-stories in today’s rapidly transforming

Bengaluru.

In the case of information technology corridor Koramangala, the land value in 2006 ranged from $44.72 to $74.53 per square foot which was $13.91 91

in 1985-86 (1 dollar is equal to rupees 40.25 and 1 rupee is equal to 0.0248 dollars on August 2007) despite being located 7 km from the city center. Today, the high-tech has transformed the real estate of Bengaluru which is in the process of becoming a world class business center due to the rise of western style buildings and the presence of all major multinational corporations in the city.

Increase in Property Tax

The property tax is an important local source of revenue and is often not completely utilized as a source for financing local expenditures (Lall and

Deichman, 2006). The studies done on the property tax by Rao and Ravindra

(2002) reveal that there are low rates of tax collection in the city of Bengaluru, only 55 per cent in Bengaluru followed by 50 per cent in Kolkata and 57 per cent in Mumbai for the year 1998-99. The recent budget for the year 2007-08 released by the BMP, now the Bruhat Bangalore Mahanagar Palike, has revealed that tax on commercial properties would be raised by 20 per cent and those properties which were not taxed earlier would be taxed now (Economist, 2006;

Gupta,2007).

It would be evident from fig. 3.14 that property taxes are constantly rising since 1991-92. There is a 33 per cent increase in revenue between 1991 and

2001 as there was a rise in the collection rate and the number of assessed properties (Lall and Diechmann, 2006). The property tax of Bengaluru has 92

increased from less than 50 crores (1 crore is equal to 10,000,000) to almost 200 crores which shows that there has been an increase in the fees and fines for commercial and residential properties which are on the rise, and the local government is more active in collecting the taxes which is one of the important sources of revenue in the city. This revenue is used for future welfare of the city’s infrastructure.

250

200

150

100 In tenmillions US$

50

0 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 Year

Property Tax Collected in Bengaluru from 1991-2003 Fig. 3.14 Data Source: Nilekani (2003).

Property tax is one of the revenue generations for the city corporation.

Analysis done on the fiscal and distributional implications of property tax by Lall and Deichmann (2006) reveals that the reform efforts have brought assessment 93

of property tax base closer to market value. It has also significant impacts on revenue generation.

Earlier, the cheap land values and real estate prices were an attraction for the high-tech firms to locate in Bengaluru as compared to other metropolises. But the rise of high-tech firms has essentially increased population. This means the outcome is congestion and acute pressure on the infrastructural facilities resulting into the movement of information technology companies to Tier II and

Tier III cities.

Changing Urban Landscape

The increase in software industries has impacted the physical spatial structure of the urban landscape of the city. There is a change in the physical setup of the city and its architecture, for example in Koramangala the ward with the highest number of high-tech ward is an excellent case of intra-urban disaprities (Fig.3.15). The luxury housing complexes and the glass office buildings are on the rise which modifies the infrastructure of Bengaluru. Its supporting infrastructure (transportation, civic amenities etc) in the city is drastically changing. 94

Information technology Strip in Koramangala

Fig. 3.15 Photograph by the author

The city is expanding outward forming software and industrial parks, such as and ITPL (International Technological Park) in Whitefield

(Fig.3.17).These software parks and industrial units are facilitated with work facilities, recreation and residential activities all at one place (Madon, 1987).

Many multinational corporations’ laboratories are located which provide a new outlook to the suburbs or the nerdistans of the city (Malecki, 2006). These corporations construct technology centers which produce new infrastructures, further transform and create a new international work environment. These efforts 95

also generate a new global clientele and the effect is the creation of expensive restaurants, pubs, bold billboards and shopping plazas (Fig. 3.16).

Bold Billboard Outside Forum Mall in Koramangala

Fig. 3.16 Photograph taken by the author 96

The International Tech Park at Whitefield Fig. 3.17 Photograph taken by the author.

New Retail Destinations and Shopping Malls

Bengaluru has become the young, vibrant, cosmopolitan and the most sought after city for retail destinations. Since it is the hub of the information technology corridor, there is a rise in the population of young software professionals with disposable income. 97

Forum Shopping Mall in Koramangala Fig. 3.18 Photograph taken by the author.

The most fascinating change in urban landscapes is the shopping malls and information technology parks. The new shopping outlets in central business district (Richmond town) are Bengaluru Central and Garruda Mall near MG Road, which have recently opened in the city. The information technology hub of

Koramangala contains Globus and Forum Malls which are already discussed and are one of the favorite spots for shoppers and non-shoppers of all age groups

(Fig.3.18). These malls are air-conditioned, have all the retail outlets and food courts with national and international cuisines all under one roof (Fig. 3.19). 98

Food Court in Forum Mall, Koramangala Fig. 3.19 Photograph taken by the author.

Rise of Residential Luxury Complexes and Quality Builders

The changing status of Bengaluru has not only impacted the hotels which

are around 3000 in number, but there is a shortage of hotels in the city.

Government and private builders are constructing many new apartments in and 99

out of the city corporation. There is a construction boom going on in the city near the information technology corridor and the information technology parks, i.e.

Whitefield and Electronic City. The construction industry has become a very lucrative business as the price of real estate has increased in the past 5-10 years and there has been a rise in quality builders. The builders are innovative and create an internationally renowned place of residence and commercial places and focus on theme-based housing enclaves. Many prominent quality builders have increased in Bengaluru like Sobha Developers who are the preferred builders for India’s Infosys; the Prestige Group (Forum Mall); Puvarankara ;

Akme Projects Limited; Gopalan Enterprises; Kristal Group; Canopy Dwellings;

Galaxy Constructions; Value Design Build; Concorde Group; ACAS Group and

Oceanus Dwellings (Antony,2006).The new builders of today are shaping and creating the new landscapes of Bengaluru with life transforming lifestyles, international concepts in design and construction with exceptional transparency.

They are pulling not only the multinational corporation’s high income couples but also the expatriates who are returning and require homes with all facilities. They are their foremost customers for whom money is not a problem but require only quality and design. Many billboards today advertise luxury apartments which have become an urban landmark of the city (Heitzman,2004).

100

Posh High Rise Apartments Next to Forum mall in Koramangala

Fig. 3.20 Photograph taken by the author 101

Billboards Advertising Tech Parks in Whitefield Fig. 3.21 Photograph taken by the author

Role of Quasi-Government

The Bangalore Development Authority (BDA) plays a vital role in shaping up the land use and improving the urban landscape of the city. There is tremendous pressure on Bangalore development authority, especially after the rise of high-tech multinational corporations and domestic firms, to maintain the optimal conditions for the high-tech companies. The Bangalore development authority came into existence on 6th January 1976, with a mission to develop 102

Bengaluru, improve its infrastructural facilities, provide sites and services to house the needs of the city, make it an ideal global city, and have a sustainable and planned development through participative and innovative approach.

The revised Comprehensive Development Master Plan in 2005, prepared by the Bangalore Development Authority has devoted around 2500 hectares to information technology. With the rise of multinational corporations, the

Department of Information Technology and Biotechnology has added 3.75 lakhs

(1 lakh is equal to 100,000) additional jobs and the Bangalore development authority has allotted land and houses for both commercial and residential land use. It has allotted 53 sq km till 2015, 25 sq km for high-tech industries, 15 sq km for traditional industries like chemistry, metallurgy, food processing, automobiles and 13 sq km for logistics, i.e. wholesale markets and their offices. New office spaces have been planned, especially in southeast between Whitefield and

Electronics City. Bangalore City Corporation, now the Bruhat Bangalore

Mahangar Palika ( Municipal Body) and the Karnataka

Industrial development board have also played a vital role especially in creating industrial infrastructure (Shaw and Satish, 2007).

Rise in Real Estate Investment

High-tech firms have caused the real estate industry to blossom and bloom not only in Bengaluru but also the million cities in the country. With the information technology revolution, the well paid information technology workers have turned out to be a goldmine for the developers and the real estate industry. 103

It is not just the information technology firms which are demanding more office space but also their young paid employees who have now started investing intelligently in real estate (Kulkarni, 2006). Today, especially the real estate sector is booming as an investment opportunity which gives the highest returns.

There are several factors for the change which real estate is facing today: firstly, the rise of disposable incomes in hands of information technology workers; secondly, no family responsibilities; thirdly, it’s a big incentive for tax benefit; fourthly, the presence of working couples with double income is also leading them to invest in second homes too; finally, with good home financing loans

(Kulkarni, 2006; Lakhotia, 2006).

Real Estate and Land Price Transformation

The high-tech industry is not only transforming the landscape of the city, with new architecture and international design, but is also influencing the land prices in the city. The rise of high levels of investment in the corporate sector and multinational corporations have also triggered the secondary effect in terms of demand for residences. The main factors for rise in real estate in Bengaluru has been the high income of information technology professionals, private equity, foreign direct investment, easy bank rates, large number of Non- Resident

Indians and high net worth individuals, who are investing in real estate and thus demand is persistently rising (Sundar, 2004; Sinha,2006). Another vital factor in 104

the rise of real estate is the government, which has also partially relaxed foreign direct investments regulations in February 2005 (Sinha, 2006). Since 2000, the city of Bengaluru has seen a drastic and sustained increase in real estate prices in spite of the poor infrastructure and apprehension about the high-tech companies shifting their future investments to other cities (Sundar, 2004). A rise in the land prices in and around the city has taken place between 1992 and 1996, and it has been revealed that in the earlier months of 1995 the land prices were at their highest rising from 50 percent to 300-400 per cent in some areas

(Heitzman, 2004). Surprisingly, the residential land values in the information technology corridor in 1997 and 2001 have led to a completely new scenario.

Figure 3.22 reveals the residential land price in 1997 which shows an increase in upper outliers all around central business district and the information technology corridor. Apart from the information technology corridor, land values also near the

Mysore road have increased as it is becoming an information technology hub too. 105

Residential Land Values: 1997-2001 Fig. 3.22 Data Source: Puliani, 2004.

106

Figure 3.22 indicates that there has been a rise in the residential land values especially in 1997 as compared to 2001 in Basavangudi and Jayanagar which are in the information technology corridor. The 2001 residential land values have increased almost in the same area, i.e. around the central business district and towards the information technology corridor. But the land price rise can also be seen towards Mysore Road where information technology clusters are coming up. There has been a change in land prices in Koramangala (ward with largest high-tech firms) but the government records didn’t have the data whereas the

Bangalore Property.Com reveals there has been some change in land values in the information technology corridor.

A very important factor which reveals why land prices in some of the information technology corridors has not yet been impacted is due to the availability of customized and independent offices at comparatively lower capital values. Many information technology companies today are relocating their offices in the suburban districts of , Koramangala and Airport Road. It has no doubt led to an increase in the commercial transaction volumes in the region. But the rental values in the information technology corridor are also stable due to the sustained demand for office premises from information technology companies.

The demand for commercial leasing is anticipated to improve since many companies are expected to source their office requirement over the next quarter.

However, in the wake of the existing oversupply situation, rental values are expected to decline marginally (Bangaloreproperty.com). The figure 3.23 reveals 107

that the commercial land values, are not high, especially in the information technology corridor except the Airport ward in the east in the 1997. But in 1997 and 2001 the commercial land values are high in the Central business district and surrounding wards. The impact of increase in land prices has not yet reached the suburban areas. As in the early nineties, multinational corporations came to the central business district and established their offices, but later in the decade, it has started moving towards the information-technology park,

Whitefield, and Electronics city because of space and inexpensive land and today it is becoming the hub of high-tech firms (Srinivas, 2004). Thus, all the information technology firms and the multinational corporations are now moving to the outskirts of the city. The Bangalore development authority has also allocated land for commercial and residential purposes in the suburbs since it has more open space for the information technology parks and is becoming another important focus of the city. The 1997 commercial land price reveals an S shaped curve illustrating the five upper outliers from the outskirts in the northeast to the central business district i.e. Richmond town, Basavngudi and only one ward has high-tech firm but they are the heart of the city, i.e. the political and commercial hub. 108

Commercial Land Values in Bengaluru in 1997-2001 Fig. 3.23 Data Source: Puliani, 2004. 109

But looking at Fig. 3.23, it is very clear that the clustering of high commercial land price is around the central business district, but there is a movement towards the information technology corridor and especially toward south west part of the city. The results have to be interpreted with caution, since some data limitation, such as land values in high tech areas, was not available; hence, a generalization cannot be made.

The builders are making residential and commercial complexes in

Whitefield and near the electronics city area as it has ample land. This is also further leading towards infrastructural development. The transformation which this pattern is bringing is the suburban development and transformation of the traditional bazaar based model of the South Asian city with more of peripheral development and probably will later lead to urban sprawl. 110

Fig.3.24 Residential Land Values in 1997 and 2001 Data Source: Puliani, 2004. 111

Fig. 3.25 Commercial land Values in 1997-2001 Data Source: Puliani, 2004.

112

Thus, the change in the land value, with the rise of high-tech firms is yet to be visible especially in the government documents, but it is already noticeable on the ground level, with the real estate agents, when one goes to purchase land for residential or commercial purpose (Bangalore property.com). The change is definitely going on with the commercial land use which is directing towards the north east where lies the information technology corridor, but the mean center for both residential and commercial use remains at the center for the year 1997 and

2001. The standard deviational eclipse for the residential value is having a trend more towards south east. Arguably, here that the land use value had yet to be revealed in the data but there remains a gap between the reality and the statistics till it gets updated (Fig. 3.24 and 3.25). A surprising change which results from the statistics from Bangalore development authority in 2005 is the real estate values. It reveals that there is an increase in the land value, especially in the core of the city taking one major road, i.e. the MG Road but doesn’t show an drastic increase in the information technology corridor (Fig.3.26). The western part of the city has the least rise in the land value, but quite surprisingly, the information technology corridor reveals no change according to the planning agency in Bengaluru.

The high-tech firms also lead to telecommuters, which does not require the workers to commute or require a typical office, but this cannot be generalized with all workers since all are not telecommuters.

113

Real Estate Values in Bengaluru: 2002 Fig. 3.26 Source: Courtesy of Bangalore Development Authority 2005

Fig. 3.26, based on the government documents and the Bangalore development authority, reveals that there has been a rise in the real estate prices in and around central business district, Richmond Town and Gandhinagar, which is also called the golden triangle. The real estate website

BangaloreProperty.Com shows a rise in the land value in the information technology corridor. It is argued that the current land price which is high in the central business district will not fall in the future, as there is a scarcity of land in the core of the city and the demand in the core would continue to increase due to the rise of information technology firms (Sundar, 2006). 114

The wards Vasanthanagar, Shathinagar and Sampangiramnagar extension are good favorable locations for residential and commercial land uses and here the rental values are not very high. But the land values in the western part of the city are very low due to low social image and depreciation of industries.

The statistical dataset for Bengaluru consists of information on 100 wards for fifty variables such as: population, literacy for both male and female,

Scheduled caste and Scheduled tribe population, distribution of workers by categories, total number of household by slums, literacy in slum population, revenue earned, number of high technology forms, expenditure on infrastructure, commercial and residential real estate values at the ward levels. Insignificant relationships were observed for most of the linear regression models due to the limitation of information compiled at the ward level which contains several zeroes for various entries. Information is usually not collected by the various government offices at this geographical unit and existing information is not detailed and exhaustive to give a statistically significant relationship. Many of the variables for which information is available are not relevant.

A linear regression model was run to examine the determinants of commercial land value at the ward level in Bengaluru city. The regression analysis showed the following results for 1997. The model was run with commercial land values (COMM97) for 1997 as dependent variables and four independent variables: HT (number of high technology firms), SP_ILL (slum 115

illiterate population) and P_LIT (persons literate), RESI97 (Residential land values,1997).

The 1997 regression model shows that the four independent variables explain more than three quarters (77.7%) of the variability in the commercial land values in Bengaluru. As expected the coefficient for the number of high technology firms shows a positive sign. The high-tech coefficient of 2.611 suggests that on an average with a one unit increase in the number of high tech firms, there is an expected increase in the commercial land value by Rupees

2.61(one Dollar is equal to 43.54 Rupees as of August 19, 2007). Further with an increase in slum illiterate population, there is an expected decrease in commercial land values by 0.007.

Table: 3.2 Determinants of Commercial Land Value in Bengaluru: 1997

Variables Coefficients R Square Constant 321.294 0.776 HT (Number of High Technology Firms in 2005) 2.611 SP_ILL (-)0.007 P_LIT 0.001 RESI97 0

The last two variables percent literate (P_LIT) and residential land values

(RESI97) show a negligible to a no cause and effect relation upon commercial

land values during 1997. The data set to run the regression model has

limitations. It is data set compiled at the ward level (neighborhood level) for the

Bengaluru city. Out 100 wards 72 wards have no high technology firm location thereby suggesting an agglomeration of these forms in specific areas. The high 116

technology variable has zero entries for several ward level information thus making it less amenable to statistical treatment.

The high-tech firms in Bengaluru are to be credited in shaping and creating a new urban landscape of the city. The real estate prices have been impacted by the rise of foreign direct investments, non-resident Indians, expatriates and the establishment of multinational corporations. The price in the central business district is very high as compared to the outskirts and the information technology companies are agglomerating on the periphery of the city and world class residential and commercial complexes are rising. The real estate boom is leading to the rise of ancillary industries, construction boom and quality builders. The information technology revolution has created the rise of disposable incomes and real estate is considered to be the best intelligent investment, by the software workers and high net worth individual and the expatriates. The rise of real estate is also leading to suburban development, international designs with world renowned builders and is ultimately shaping and raising the geography of lifestyles and incorporating cultural globalization in all sense not only in

Bengaluru but other high-tech cities of the country.

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CHAPTER 4

HIGH-TECHNOLOGY AND THE CHANGING ECONOMIC LANDSCAPE

The Indian information technology industry has become the ‘role model’

for other developing countries and emerging economies (Taeube, 2002). But the

question remains: can this model be easily emulated? The high-tech firms in

Bengaluru have raised the rank of India in terms of becoming the second largest

software exporter of the world after the USA. There are many questions being

raised regarding how the Indian information technology has been a success story

in spite of many social and economic hurdles.

This chapter tries to understand and uncover the economic aspect of high-

tech firms in Bengaluru, highlights the socio-economic landscape using a few case studies and, finally, evaluates the role of government expenditure and revenue in deepening disparities in high-tech and non-high-tech wards.

117

118

Growth of Industrial development in Bengaluru

Bengaluru has always been an attractive destination. It is not just because of growth of information technology (IT) or coming of the first multinational corporation, i.e. the Texas Instrument in 1984, but even before it was called the science capital of India.

History witnesses that the major industrial development in Bengaluru started after Independence (1947) when it began concentrating on major textiles mills, silk industry, and aircraft industry. Historically, Bengaluru’s employment has remained more service-dominated than manufacturing. Even today the formal sector of Bengaluru economy contains the largest number of textile workers followed by the public sector undertakings and central and state government institutions (Srinivas, 2004). Bengaluru’s industrial makeup has been very diverse ranging from textiles, oil industry, heavy machinery, soaps and detergents, electric, aeronautics to information technology. Today, it is facing a drastic change with rapid growth of software and computer industry and is becoming a magnet attracting software multinational companies from all over the world (Schenk, 2001). Since the 1990s, the city has earned the reputation of specializing in the areas of research and development, electronics and software production. The presence of the Indian Institute of Science (IISc) along with increasing investments by the Central government in R & D establishments, such as Indian Space Research Organization (ISRO) provided the city the acronym as 119

the science city (Heitzman, 2001). The industrial growth of the city can be divided into four following phases:

Pre Independence

The Bengaluru industrial scenario before independence was a textile town. It had many textile mills which were located in the western part of the city.

In early 1600s, there were around 12,000 weaver families who settled from Tamil

Nadu., a Wodeyar ruler of Bengaluru, has played a significant role in introducing industries and modern techniques for producing sugar, glass etc

(Chittaranjan, 2005). In this period, there were many household industries like carpet manufacturing, basket making, pottery making etc (Srinivas, 2004).

During the British period, laying of railways had a significant role in setting up of

Bangalore woolen, cotton and silk mills Ltd (BINNY) not in 1884 and Mysore

Spinning and Manufacturing Company in 1894.

So the economic growth of industries in Bengaluru was carried forward by

Sir M. Vishweshvaraya as chief engineer who shaped the industrial landscape

of the city for five decades. The Government Soap Factory was established in

1918 for manufacturing perfumes and soaps using sandal and jasmine and it is

still an attraction for the tourist who visits Bengaluru. In 1919, the Minerva Mills

were established which produced cloths especially the traditional ones, and it was followed by the Government Electric Factory in 1934 to produce electric 120

transformers, motors etc. The industrial activity also expanded during the Second

World War and made it self-dependent as the raw materials couldn’t be imported

(Chittaranjan,2005; Dittrich, 2007). Many of the earlier factories were located in the western part of the city whereas some factories also were located in the city

(pete) and the cantonment area (Srinivas, 2004). The year 1940 can be recalled as a textile era but later became quite significant for the Indian public sector as

Hindustan Aircraft Factory, later called Hindustan Aeronautics Limited, was established ushering a new era of modern industry.

Post Independence: 1947- 1970

With independence in 1947, Bengaluru received many public sector industries as it was selected as the venue for many central government enterprises. This era was more inclined towards industry, research and development. The three major public sector units were Indian Telephone

Industries (1948), Hindustan Machine Tools (1955), and Bharat Electronics limited (1955). This was when the first Prime Minister of India decided to locate strategic industries like defense and electronics (Chittaranjan, 2005; Dittrich,

2007; Nair, 2005). The major reasons for these industries were the distance from the border area. This was a very important and transitional phase of Indian growth as it had already seen two wars, i.e. Partition of India and Pakistan, Indo-

China war in 1962 and the Indo-Pak war in 1971. Around the early sixties and 121

seventies, Bengaluru was acknowledged as the hub for public sector investment and attracted many other units; Hindustan Machine Tools (1972) and Bharat

Heavy Electrical Limited were established. This further led to the creation of industrial estates where the infrastructural facilities were provided by the state government and led to the formation of Peenya Industrial region in the western part of Bengaluru (Srinivas, 2004).The sixties and seventies were considered the golden period for the success of state government, bureaucracy and state run enterprises (Dittrich, 2007).

1970-1990s

In 1972, Indian Space Research Organization (ISRO) was established and in the early eighties the first multinational corporation entered, i.e. Texas

Instrument (1984). The seventies is often called the era of the emergence of middle class with the rise of research organization, formal sector industries and being a seat of power and rise of educational organizations. The 1990s was the period after the economic liberalization when private entrepreneurs became the growth factories (Dittrich, 2007).

The economic structure of city for the 1990s is delineated by urban and rural districts. The most capital intensive sectors were the large- scale production of chemicals although the number of the workers engaged in these plants was 122

not so large. Similarly, the second largest capital investment was the automotive and transportation sector which reflects the presence of the Hindustan

Aeronautics Limited (HAL) employing the largest number of people in the city.

The third largest sector was electronics which included firms like Bharat

Electronics Limited and Bharat Heavy Electrical Limited (BHEL). The fourth largest sector was the engineering and manufacturing firms including Hindustan

Machine Tools (HMT) with the myriads of watch factories. It also exemplifies that most of the capital investment and employment is found in the large- scale and urban district of Bengaluru City as opposed to small-scale and rural district of the city. Later the rise of all these industries gave impetus to good neighborhoods like Jayanagar, which are the high - tech clusters of today, the hub of middle class and one of the best residential localities of the city (Srinivas, 2004).

1990s till Today

The 1990s can be considered as the take off stage for Indian Information technology sector. This was the period when many multinational corporations as well as domestic information technology companies made Bengaluru their home.

At this point Bengaluru was already rich and renowned for its best educational talent, facilities and skills and truly was called the science city. Today there are more than 80 multinational corporations and around 1550 information technology companies in the city (BangaloreIT.co. in). Table 4.1 reveals that 24 per cent of investments are in information technology, research and development sector 123

followed by power, oil, gas and petroleum. Roads and other infrastructures and automobiles investment have also risen to 18 per cent from 1995-2005. So, in all

28 per cent is allocated to secondary and manufacturing industries and around

70 per cent to services and the quinary sector which is a great success in the economy of the city.

Table: 4.1 Investment (Industrial) in Bengaluru: 1995-2004

Sector In % Power, oil, gas and petroleum 21.84

Pharmaceuticals and medical systems 0.07 Biotechnology 0.43 R&D, information technology and software, call centers and electronics 22.2 Hotel, recreation, commercial ,retail and hospital 10.08 Automobile and auto ancillaries 17.5 Metals,machinery,engineering,electrical and other manufacturing 5.83 Food and Breweries 2.85 Textiles and garments 2.16 Roads, railways, and infrastructure 17.04

Data Source: Shaw and Satish, 2007.

124

70

60

50

40 Central Govt Rupees in Billion State Govt Private(Indian) 30 Private(Foreign) Cooperative Joint Sector

20

10

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year

Total Investment in Bengaluru by Different Agencies Fig. 4.1 Source: Shaw and Satish, 2007

Figure 4.1 reveals that in Bengaluru, though, there are different types of investments but foreign direct investment and private investment have been dominating compared to the central and state government. They have increased but at a very slow rate. Even if one ranks country wise, the cumulative investment by foreign investors from 1995-2004 is dominated by Bengaluru followed by Delhi and Pune, whereas Mumbai’s rank is very low with Surat city in Gujarat taking over. Looking at the overall investment by different sources,

Chennai is leading followed by Mumbai, Delhi and Surat (Shaw and Satish, 125

2007). The United Nations Human Development Report 2001 has ranked

Bengaluru City fourth along with Austin (USA), San Francisco

(USA), and (Taiwan) as the top technology hubs of the World.

Public Sector Undertakings and the textile industry initially drove Bangalore’s economy, but the focus in the last decade has transferred to high-technology service industries.

High-Tech Industries in Bengaluru

Every week around two to four high-tech firms start in Bengaluru and almost 30-40 foreign firms set up their businesses in India (Aspden, 2006; STPI,

2005). The information technology corridors in Bengaluru have been demarcated by the Government of Karnataka. The information technology corridor includes

Whitefield, Indiranagar, Koramangala, , HSR Layout, Electronics

City, JP Nagar and . But in this research the information technology

(IT) corridor includes Koramangala, Jayanagar, Airport, , J.P.Nagar,

Basavangudi, Rajajinagar, B.T.M.Layout and wards, according to the presence of the number of high-tech industries (Fig. 4.2 and Fig. 4.7). Amongst the hundred wards of Bengaluru, -two wards which have no high-tech firms, listed according to the department of Information technology and

Biotechnology in 2004. Table: 4.2 show inequality and spatial disparity of high- tech firms in the city. Though there are more than 1500 high tech firms as 126

mentioned in this research by other sources, but this study has taken only the

100 wards of Bengaluru ie the Bangalore City Corporation and not the Bengaluru

Urban agglomeration. Thus, this data is to be carefully scrutinized and cannot be conclusive as they are all the information technology firms who have registered with the department of Information technology and Biotechnology, Government of

Karnataka.

Table: 4.2 Distribution of High-Tech Firms amongst the 100 Wards of Bengaluru

High-Tech Frequency of Firms wards 101 1 68 1 33 1 18 1 17 2 16 1 11 1 7 3 6 2 5 1 4 3 3 4 2 5 1 2 0 72

Data Source: Department of Information Technology, Bengaluru, 2006.

127

Economic Landscape of Bengaluru Fig. 4.2 Source: Courtesy map from Dittrich, 2007 128

Whitefield (International Technology Park Limited) and Electronics City are not in the study area, i.e. they are out of the City Corporation and will be discussed in later sections. Since these companies are located in the information technology corridor, their employees have a good reason to live in the areas adjacent to it which impacts those wards adjoining the information technology corridor. Thus, wards like the Airport, Richmond Town, M.G.Road, Cunningham

Road, Infantry Road, Hosur Road, Koramangala, J.P. Nagar, Jayanagar and

HAL are the choices of most professionals (Fig.4.2). Here several questions need to be answered, such as :1) do high-tech firms cluster near educational institutes where there is high literacy; 2) do high-tech firms agglomerate near commercial sites and infrastructural facilities?

The growth and impact of information technology industry shows a dramatic rise in its exports (Fig. 4.3) There has been a rise in the foreign equity companies from 79 in 2002-03 to 110 in 2003-04 (Software Technology Parks of India,

Bengaluru, 2004). Today, Bengaluru’s US$ 47.2 billion economy makes it a major economic centre in India, and as of 2001, Bengaluru’s share of US$ 3.7 billion in foreign direct Investment made it the 3rd highest recipient of FDI for an

Indian City (JNNURM – City Development Plan for Bengaluru, 2006).

Today, Bengaluru accounts for almost one- third of the software employment and exports of the country. It contains around 1200 information technology- related companies and over 260,000 employees in the year 2004

(Saxenian, 2006). The information technology sector, according to Karnataka 129

Udyog Mitra, reveals that there are almost 3 lakh (one lakh is equal to 100,000) professionals working in information technology and exports amounting annually to $8.4 billion and is expected to reach $10 billion by 2007 (Hindu, 2006) and $18 billion by 2010.

7000

6000

5000

4000 Bangalore

India 3000

Million dollars

2000

1000

0 1991- 1992- 1993- 1994- 1995- 1996- 1998- 1999- 2000- 2001- 92 93 94 95 96 97 99 2000 01 02 Year

Share of Bengaluru to Total Software’s Export

Fig. 4.3 Data Source: National Association of Software and Service Companies, 2005

There has been a rise in the high tech companies at private, public and multinational corporations levels since 1991 with the liberalization and the information technology policy in Karnataka, which was the first of its kind in India. 130

Karnataka became the first state to have the IT policy (Mahiti IT Policy) in 1996.

Thus the information technology policy has opened the doors of many high-tech firms in Bengaluru. The Fig. 4.4 reveals an increase in information technology firms from 1991 till 1998 but from 1998-99 to 1999-2000 there has been boom of high-tech in the city which has become just unstoppable. The major driving force behind this kind of rise of high-tech firms is the Mahiti IT Policy and IT friendly government. In 1998 the International technology park limited began in Whitefield which provided infrastructural support for all the information technology companies.

131

1400

1228

1200 1154

1038

1000 928

782 800

High Tech Companies Number 600

400

267 207 200 163 125 79 53 13 29 0 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2004- 92 93 94 95 96 97 98 99 00 01 02 03 05 Year

High-Tech Companies in Bengaluru: 1991-2005

(Note: 2004-05 figures are from Karnataka IT Directory) Fig. 4.4 Data Source: Department of IT and Biotechnology, Bangalore, BangaloreIT.com

The Department of Information Technology considers Bengaluru to be number one in drawing domestic high-tech firms and multinational corporations and claims that there were 1584 information technology firms and office locations in Bengaluru in 2005 and around 512 were multinational corporations (Fig.4.5).

Multinational Corporations (MNC’s) play a significant role in shaping the information technology landscape of Bengaluru. The growth and development and success of Bengaluru high-tech city would be considered to be incomplete 132

without the setting of multinational corporations. The contributions of Indian-born engineers and software workers from the USA and all around the world who came back are also commendable. The USA dominated the multinational corporations followed by UK, Japan and Germany (Fig. 4.5).The existence of multinational corporations not only impacted the diversity of migrants but is also transforming the working as well as the cultural landscape of the city. The mentor and former CEO, N.R. Narayana Murthy of Infosys is of the view that the multinational corporations have created competition and has forced to build a local infrastructure (Saxenian, 2006).

OTHERS 10%

FRANCE 6%

US 42% GERMANY 13%

UK 15%

JAPAN 14%

Multinational Corporations in Karnataka Fig. 4.5 Data Source: Department of Information Technology and Bio technology, Bangalore, 2006. 133

Tata Consultancy Services were India’s first company which pioneered the

Indian software and consultancy (1960) and, later, they started exporting software services to American customers. In 1984-1985, Hewlett-Packard and

Texas Instruments established their development offices at the invitation of the

Government of India (Saxenian 2006). Now, many billboards are seen in the city saying thanks to Texas Instruments and Hewlett Packard (HP) for locating its offices in Bengaluru.

Texas Instrument: First Multinational in Bengaluru in 1984 Fig. 4.6 Photograph taken by the author. 134

An interesting question now arises as to where the information technology firms and professionals would prefer to locate. Malecki (2006) argues that wherever the information processing companies, related services and skilled professional will choose to locate, that will shape the geographic importance of future cities and communities (Kotkin, 2000). Similarly, in Bengaluru, information technology parks, information technology corridors and wards adjoining it are growing at a much faster rate than other wards (Fig. 4.7).

Note: The dark grey color is the agricultural zone.

Information technology Corridor in Bengaluru Fig. 4.7 Source: Courtesy Map from Bruhat Bangalore Mahanagar Palike (City Development Plan, JNNURM) 135

The spatial location of high-tech firms is correlated to each other. The

Moran’s I explain the strength of high-tech firms and demonstrate that they are clustered. But to verify whether there is any impact on the surrounding areas, a univariate local indicators of spatial autocorrelation (LISA) is run with the weight matrices (Queen’s Contiguity). The results in Fig. 4.8 show that at the local level there are clusters of wards which are housing high-tech firms that are spatially associated to each other and are significant at the 95 per cent level. These results are completely opposite with Frenkel’s (2001) hypothesis which emphasized that the high-tech firms concentrate in the core of the metropolis rather than the outskirts of the city, but in Bengaluru this is not true. The Moran’s

I results illustrate that the high-tech firms are clustered and examining the local indicators of spatial autocorrelation map it is evident that they are clustered in the southeast and northeast and are completely absent in south, north, and west and also in the core of the city. It reveals spatial heterogeneity (Fig. 4.8). But there is limitation with the statistics as the data was collected from the Department of

Information Technology, Bengaluru in 2004, and with time in few years (2007) they might have changed.

136

Univariate LISA Results of High-Tech Firms in Bengaluru

Fig. 4.8 Data Source: Department of Information Technology and Biotechnology, Bengaluru. 137

Direction and Gravitation of High-Tech Firms Fig. 4.9 Data Source: Department of Information Technology, Bangalore. 138

Fig. 4.9 unveils the center of gravitation (mean center) inclined towards the southeastern part of the city especially towards the information technology corridor (Fig. 4.9).

It is observed that the high-tech firms are agglomerated and are clustered on the outskirts of the municipal corporation. Two famous major information technology enclaves are the Electronics City and Whitefield. It is apparent that the southeastern part of the city with directional shift has the new emerging residential localities, concentration of population and high literacy rate. Frenkel

(2001) argues that the high-tech firms are located where there is high prestige and this generalization holds true for some wards of Bengaluru e.g. in

Koramangala.

Aranya (2003) examined the inequalities in Bengaluru’s urban economy and also explained transformation of spatial structure of the city with the growth of information technology sector. She has analyzed the spatial disparity in

Bengaluru and has divided the evolution of information technology sector into four phases: first, phase of startups and location of multinational subsidiaries

(mid 1980s-1991); second, phase of establishment of brand capability (1991-

96); third, phase of Y2K related boom and dot com bust (1996-99); and, finally, phase of business recovery and peripheral spatial growth (1999-till today), thereby comprehending the spatial spread and the inequities in the urban economy. 139

Does this convergence of high-tech firms also lead to the concentration of population, slums, educational and other infrastructural facilities? Are these high- tech firms the sole factor of further deepening the existing disparities or are there other forces which are dominant? The next section highlights a few case studies which the researcher has divided into high- tech, non high-tech, uprising high- tech wards and information technology parks wards. It evaluates the socio- economic conditions and to what extent the high-tech firms lead to the creation of disparities in the 100 wards of Bengaluru.

High-Technology and Socio-Economic Transformations

The city has diversity of people, language, religion, food, industries and also the number of information technology firms varies across all the wards. On the basis of the interviews and data analysis, the researcher selected wards ie

Koramangala and Jayanagar as the high-tech wards (they have the largest number of information technology firms), the central business district of the city in and around Richmond Town and the non-high-tech wards like Chandra Layout and Gandhinagar. The information technology parks, though not a part of the study area, the researcher still finds it imperative to discuss them as this research remains incomplete without mentioning Electronic City and the

International Technology Park Limited (ITPL), Whitefield. All the above 140

mentioned wards are compared with respect to what extent the presence and absence of high-tech firms have impacted and transformed the city.

High-Tech and the Non-High-Tech Landscape of Bengaluru Fig. 4.10 Note: Uprising high-tech ward: They are the wards which have recently added high-tech firms (Richmond town and Sir C.V.Raman Nagar) Data Source: Department of Information technology, Bangalore. 141

High-Tech Wards

There are approximately 28 wards containing high-tech firms and the discussion concentrates on high-tech firms located in wards adjacent to the information technology corridor. Malecki (2006) argues that locational freedom is a vital factor in the traditional economy. But Mitchell (1999) suggests that locational freedom doesn’t mean locational indifference. It is argued that a good location will be those where it has a pleasant climate, great scenery, attractive residential areas, unique architectural environment and cultural traditions

(Mitchell, 1999). Koramangala, Jayanagar, Airport and the information technology corridor and upcoming information technology wards like the

Bagmane Tech Park in C.V. Raman Nagar are all upscale residential localities and are accessible (Fig.4.12). Climate is another plus factor for Bengaluru high- tech image. Prof Vinod Vyasulyu, a noted economist, argued that climate is not the only reason for information technology to be located in Bengaluru, but the history of the city as a science city and its educated pool are the real attraction, said in an conversation with the researcher.

Koramangala

This ward is located near the core of the city. It is at the intersection of

Hosur Road and 20th Main Road. It is surrounded by elite residential areas like

Richmond Town in the north and Shanthinagar in the northwest. It was basically 142

featured as a residential ward with individual bungalows and high-end apartments. The Bengaluru Development Authority (2004) has demarcated

Koramangala as a planning district which covers three more wards, i.e. Eijipira,

Austin Town and Neelasandra. It is surrounded by slums near the residential quarters and the independent villas near the drain that crosses through till Koramangala (Revised Comprehensive Development Plan 2015, 2004).

Residential Area of Koramangala Fig. 4.11 Source: Photograph taken by the author

143

It is called a high-tech ward with 101 firms, the largest number of firms in the study area (Figure 4.12; BangaloreIT.co.in). The important factors for the location of firms in the Vth block of Koramangala were the lower cost of leasing space as compared to the city core, its accessibility to the airport as compared to other areas, and basic infrastructural facilities (Aranya, 2003). Koramangala was basically a residential ward (44%), became an information technology ward and is now turning into a shopping and entertainment district (Table:4.2) Today, it is of great appeal to the migrants and people from all walks of life from the city.

High-Tech Firms in Koramangala Fig. 4.12 Source: Photograph taken by the author 144

Koramangala is a transformed ward today because of the location of high- tech firms. Its adjacency to the airport has really put pressure on this ward. The high-tech strip has attracted a lot of development and commercial activities, such as the shopping malls Forum and Globus, international chains of diverse eateries and luxurious and expensive high–rise residential apartments. There has been a drastic rise of various entertainment and commercial facilities which have become a great source of attraction for people of all ages. The main impact of Koramangala being an information technology ward apart from fancy malls is that it has attracted people from all over the world which adds to the already diverse population.

Indeed, it is a beautiful reflection of cultural globalization visible in the malls and bold billboards. The stores have formal and informal traditional clothes where some of the women’s dresses have become quite common with the coming of multinational corporations which was not there five years ago. A dire change in the commercial landscape has been taking place in this quiet residential ward. Koramangala retail stores and shopping malls have made the shopping experience a great pleasure with all departmental stores together saving from heat and rain and a nice environment where one can window shop without being singled out or pressured to buy.

This researcher visited the famous Forum shopping mall on a weekday and on weekend. There was no place to park the car and it looked as if one was in some city fair where all were visiting this mall. The mall was very crowded and 145

congested. Some stores had long queues which were quite an unusual scene in an Indian city, especially when there is no sale or festival going on. Visiting these malls and other non-high-tech wards like Gandhinagar or Chandra Layout is a complete cultural shock and an incredible experience.

Koramangala was basically a residential area (Fig. 4.11) and its infrastructure was not really ready for this kind of change; thus, the commercial facilities and activities have imposed lots of pressure on the residents and on the ward as a whole. Many workers in information technology firms live here as paying guests in the residential areas as Koramangala is close to the Airport and near the information technology corridor and information technology parks.

Therefore, individual villas are converted now into double and multistoried homes as the property is becoming expensive, and people are renting their rooms to the software workers and the concept of paying guests is becoming a very common and popular feature, especially in Koramangala and the wards which adjoin the information technology corridor. The main reasons for staying there were good residential houses, commercial activities and proximity to work especially those who worked in and around information technology corridor and information technology parks. Special buses run from the information technology parks to the residential areas and most of the employees use the bus and some ride motorcycles and few drive cars. Driving is stressful because of jam-packed roads and numerous red lights; such development has disturbed the peaceful residential areas. 146

Table: 4.3 Land use distribution in the High-Tech wards and Information technology parks

Central Business District (Richmond Electronics Land use Koramangala Jayanagar town) City Whitefield Residential 44.50 52 26.5 5.4 14 Commercial 4.70 5.8 20.9 0.5 0.9 Industrial 2.80 1.8 0.9 9.7 14 Public and Semi Public 19.30 7.4 15.1 0.8 1.9 Parks, Playgrounds and open spaces 3.30 5.3 6.9 0.5 0.5 Transportation 14.20 17.5 11.7 4.2 6.4 Other spaces(agricultural, vacant) 11.00 10.1 17.2 78.7 62.1 Public Utilities 0.1 0

Data Source: Revised Comprehensive Development Plan 2015, 2004

Jayanagar

Jayanagar is the second largest ward in terms of high-tech firms according to the Department of Information Technology (IT), Bengaluru. The planning district of Jayanagar (Jayanagar, BTM Layout, Yediyur, J.P. Nagar and

Pattabhiramanagar wards) is considered as a distinct and high class residential area supported by good urban amenities (BDA, 2004). It is also called one of

Asia’s largest residential extensions. It has historic bungalows established in

1948 (Bangalore Development Authority, 2005). It is well developed on the plans of Garden City and has tree lined roads with diverse religious and historical buildings. It makes it a very livable community. Jayanagar is a residential ward, 147

but with the rising information technology firms, it is transformed and becoming crowded (Table:4.3). But the residents have protested and Bengaluru

Development Authority is making plans to maintain the quality of residential areas and to stop the rising infiltration of high-tech offices which are putting tremendous stresses on the prevalent infrastructure in the quiet and peaceful neighborhood and influencing the lifestyle of the people (BDA, 2004).

Surprisingly, Koramangala (101) and Jayanagar (68) are the best residential communities of Bengaluru with the largest number of high-tech firms in the study area and both lead a higher social index when compared with other wards of

Bengaluru.

Upcoming High-Tech wards

Central Business District of Bengaluru (Richmond Town, MG Road)

A SWOT (strengths, weakness, opportunities and threat) analysis done by JNNURM, 2006 reveals that there is a lack of a clear central business district in the city and is polycentric. Richmond Town (RT) can be denoted as the central business district of Bengaluru. Historically, the city was divided into two parts with the formation of the cantonment area in the east in 1809. The eastern part was more service-oriented, whereas the west remained more of a trade and manufacturing center. This division into east and west is separated by MG Road. 148

The cantonment area was attracted by various retails, entertainment centers, and old book shops like Higgins Boothams and Gangarams. But, today, it is dominated by bars and brand name shops, such as Nike, Adidas and diverse eateries. It has become a famous strip of the city which is heavily crowded. The

MG Road has become congested, and it is a major hub not only for shopping but for eateries, joints and theaters. Together, the MG Road and the are a great pull for the shoppers and strollers of all ages, According to Bangalore

Development Authority (2004), this ward also enjoys the highest social index.

However, the new urban structure is in working with the technology (Hall,

2001). Traditionally, the central business district of Bengaluru was served primarily by the services of banking, insurance, hotels and government, but in the past few years, it has become increasingly dominated by new business centers and newer services: media, information technology related firms, and public relations. Consequently, Richmond Town and the nearby areas are undergoing transformation. Table: 4.3 shows that Richmond Town has 27 per cent of commercial activities and one can observe the changes taking place. The residential areas, especially old bungalows, in the central business district are changing to modernized high-rise commercial facilities and luxurious apartments.

Many major streets like MG Road, Brigade Road, Richmond and Residency

Road are now being converted from the residential streets to shopping strips

(Fig. 4.13). 149

Brigade (Shopping Strip) Road in the central business district of Bengaluru

Fig. 4.13 Photograph by the author

Shoppers are attracted to the new air-conditioned malls, such as Garuda

Mall, Bangalore Central and Eva Mall. They have become new features of not only Bengaluru but also other mega and metro cities. In this location, rents are rising due to the increasing population. Many commercial offices related to information technology and non-information technology firms are rising on MG

Road and Richmond Town to have the advantage which the central business district provides. Richmond Town has not only the best of educational facilities, but also it is home to entertainment facilities, such as elite bars which attract 150

people from different walks of life, especially the software workers. Western designed food world shopping marts have been opened, and many coffee shops like Café Coffee Day and Barista have also been started which are quite new in the Indian cities.

Thus, there is plenty of evidence to support that the growth of high-tech firms is one of the major factors for the congestion of central business district.

Most significantly, with the rise of income and standard of living, the use of private vehicles has increased and has led to parking problems. The MG Road has become congested and has high traffic especially during the peak hours. The

Bangalore Development Authority (2005) has been planning for the infrastructural development of central business district and also emphasizing a parking management plan so that private business can take care of the problem and promote other areas as central business district to encourage development.

CV Raman Nagar (Bagmane Tech Park)

As discussed earlier, there are almost 72 wards out of 100 which have no high-tech firms according to the Department of Information Technology,

Bengaluru (Table:4.1). Two of the wards, i.e. the central business district and the

CV Raman Nagar are the new upcoming high-tech wards. Bagmane Tech Park is located in CV Raman Nagar (Fig. 4.13) and has many multinational firms like

Motorola, Texas Instrument, Samsung, etc all in one row. Other retail 151

multinational showrooms are moving in, such as Target. Bagmene Tech Park is close to the Airport. C.V.Raman Nagar Planning District (and also a ward) is located to the east of the Richmond Town (central business district) and is almost on the periphery of Bengaluru Municipal Corporation. Thus, the wards which are near the information technology corridor and the major roads and information technology Parks have the potential of becoming a high-tech hub. This ward is growing rapidly as it borders the information technology hub of Whitefield and almost 23 per cent of land being residential, is in great demand for housing

(Revised Comprehensive Development Plan, 2004).

MNC Motorola in Bagmane Tech Park Fig. 4.14 Source: Picture taken by the author 152

The increase in land value because of its location near the airport and

Whitefield is observed.

The central business district location has also attracted many high-tech offices and other commercial activities related to information technology. But

Bagmane Tech Park is, still, in its evolution and growing (Fig. 4.14). At this stage it just cannot match the central business district which already has all the infrastructural facilities. The rise of high-tech firms has increased the pressure on the amenities and led to traffic congestion. It can be argued that the non- high- tech wards can be an attraction for high-tech firms, or their movement to the peripheral areas. This choice completely depends on the high-tech firms, the government and the planners. Over all, Bengaluru’s 97 wards out of 100 have high literacy rates which reveal there is good potential in all other wards.

Non-High-tech wards

Chandra Layout ()

Chandra Layout comes under the planning district and is often called the green hinterland of Bengaluru. It is the home to Bangalore University and the Institute of Social and Economic Change (ISEC) campus. It is a quiet ward compared to other high-tech wards of Bengaluru. It is a hub for students 153

and youngsters but is far away from the hustle and bustle of the city. It lies on the periphery of the study area on the extreme west (Fig. 4.10).

This ward has no high-tech firms and has around 61 per cent of land under agriculture and 18 per cent is vacant. Around seven per cent are allocated to residential area and 3.6 to public and semi-public activities (Table: 4.2; Revised

Comprehensive Development Plan 2015, 2004). Thus, this ward is quite rural, especially in the west and south; but is becoming transformed since 1990 as a new layout has been developed and is also attracting new population (Revised

Comprehensive Development Plan 2015, 2004). Another characteristic feature is that it is the major economic gateway to Mysore Road. This road right now is unorganized and needs planning but will definitely be impacted as information technology parks are now also open in Mysore. The campus of Jnana Bharathi

(Bangalore University) houses an excellent university and students are attracted from all parts of the city and many stay in nearby areas and others commute. The

Institute of Social and Economic Change (ISEC) is a residential campus which houses faculty and students on the campus. Thus, the whole environment is quite appealing and peaceful but it is rural in nature as compared to central business district and high-tech ward of Koramangala. In Chandra Layout, one doesn’t find big shopping malls, fancy retail stores and diverse eateries. A visit to the Bangalore University and ISEC (Institute of Social and Economic Change) campus gives a feeling of arriving in a small town away from the city with not many commercial and retail establishments. 154

To summarize, one gets a cultural shock moving from the western to the eastern part of the city. This ward though has ample number of health and educational institutes. However, it is not at all essential that wherever there are educational institutes there needs to be an information technology hub. The same is also true for the world famous Indian Institute of Science campus in

Kodandaramapura ward which has no high-tech firms. As a result, it can be argued that high-tech firms are not leading to a rise in educational institutes and vice-versa.

Gandhinagar

Gandhinagar is named after Mahatma Gandhi. In the fifties, it was called

Gujarati Colony and Filminagar. Almost 90 per cent of the population here came from Gujarat where the father of the nation was born (Jagadeesh, 1998). This ward was formed in 1921-1931. It is the hub of major administrative and educational facilities. It is surrounded by Sampangiramanagar ward on the east and Majestic on the west; both have contrasting features. Sampangiramanagar has many government buildings, educational, medical institutes and is the seat of power and has the famous landmark, i.e. the . The majority of the population in this ward is basically government servants, students and shopkeepers. Most of them reside outside the planning district of Gandhinagar, whereas Sevashram on its west is the hub of commercial activities. Gandhinagar 155

is considered to be a major city level transit nodule and a hub of large formal and informal market (Revised Comprehensive Development Plan, 2015, 2004). It is a busy ward and crowded and congested as it has thoroughfare traffic which is going to the famous Kempe Gowda bus station.

Thus, Gandhinagar is basically a hub of old residential areas, shops, hotels, restaurants and theaters. It is a famous shopping bazaar with reasonable prices for clothes, books and electronic goods. It has Asia’s largest book store called the Sapna Book House. There are informal markets, too, which are of great attraction for the resident and transient population. It has very crowded shopping streets with people who are Hindi as well as Kannada speaking. It is a true reflection of a crowded traditional Indian core with no modernized architecture. It does have many high rises filled with hotels and restaurants and some government offices, but it is basically a commercial hub. It has all local retail activities and is available at reasonable and affordable prices.

As mentioned earlier, people migrated from Gujarat and the residents are

Gujarati, Hindi, and Sindhi speakers in the Dravidian region which make it very diverse. There is no high-tech firm in this area, but it is unique and contrasts with the information technology hub or the information technology park. It does not have modernized and fashionable buildings and is far from the hype culture which is seen in the central business district, tech park mall (International technology park limited) and high-tech wards. This may encourage closer geographical relationships. Is it just the high-tech firms which make the 156

difference? Or are they only measures or indicators of economic growth? Are they creating major changes in the city?

Information Technology Parks

There are two major information technology parks which are located on the outskirts of the city, Electronics City (EC) in the southeast and International

Technology Park (ITPL) in Whitefield in the northeast. They have become the major information technology enclaves of Bengaluru and others are in the making. A drastic change has been noticed in these information technology parks with respect to the number of firms, commuter population, new commercial and retail establishments.

It is apparent that technology creates quintessentially polycentric cities and edge cities located on the axis of airports (Hall, 2001).The outermost

(peripheral) city complexes are also formed for back office and Research and

Development and they are mostly located 20-40 miles from the center of the city.

Kotkin (2000) states that the winners in geography are the new peripheral communities and he names them nerdistans which are self-contained high-end suburbs which grew to serve the needs of rising high-tech industries and their workers. Kotkin further argues that they cannot be denoted as edge cities or suburbs as they don’t depend on the central business district for the employment and other traditional functions of urban core (Kotkin 2000, 39). 157

These nerdistans are rising and the residents try to eliminate many distractions like crime, traffic and commercial blight (Malecki, 2006). Are the information technology parks in Whitefield (WF) and EC the nerdistans of

Bengaluru? Tthe next few sections will typify the growth of Electronics City and the International technology park limited in Whitefield.

Electronics City (EC)

The EC is also called KEONICS (Karnataka State Electronics

Development Corporation limited) Electronics City is the first of its kind in India.

KEONICS was formed in 1976 to plan, organize and promote electronic industries in Karnataka (Kamath,1990). The Government established EC on 332 acre area in and Doddathogur village and Begur Hobli

Bengaluru south taluk in 1978 to KEONICS. It was decided that this land should only be utilized for information technology related activities or electronics

(www.keonics.com). Today, according to KEONICS, the EC is home to more

than 100 information technology and electronic companies and employs more

than 30,000 personnel. The Electronics City has a city road, i.e. Hosur Road,

which is a major attraction for many industrial activities. This divides the city into

two main zones, i.e. the eastern and western. The western part is growing with

the rise of information technology firms, where around 59 per cent of the lands

are agricultural (Fig. 4.10 and Table: 4.2). The industrial district of Electronics 158

City was formed in 1978 and now is dominated by high-tech firms like Infosys,

Wipro, Motorola, Siemens, Hewlett Packard and Software Technology Parks of

India (STPI). Educational institutes like Indian Institute of Information Technology are a great pull to attract the population to Electronics City. The EC is just 11 miles from Vidhan Soudha (near Gandhinagar) and nine miles from the Airport and it can be called the nerdistan of Bengaluru.

Infosys in Electronics City is one of the top domestic high-tech firms of

India in Bengaluru and is an excellent example of fusion of the east and west architecture, culture and facilities including health clubs, swimming pool, grocery stores, and eco-friendly bike paths for travel around the huge campus. They make it an ideal place to work in a green environment (Fig.4.14). 159

Infosys India’s first information technology firm Fig. 4.15 Photograph by the author

Many of the high-tech firms have started their own chartered bus to facilitate travel for the software workers. EC is well equipped with infrastructural facilities but the traffic congestion on the Hosur Road (NH7) is a cause of concern, as there is inadequate public transport and many unauthorized buses operate within the EC and in the city of Bengaluru (Revised Comprehensive

Development Plan 2015, 2004).

160

Electronics City Fig. 4.16 Source: Photograph taken by the author

There are many striking contrasts in EC between agricultural land, on the one hand, and the best multinational corporations and domestic information technology firms, on the other (Fig.4.16). Many high rise apartments and gated communities are established near the EC. The very new concept of peripheral development and similar growth is spreading as it is occurring in Delhi and

Mumbai, too. The high-tech landscapes and its high-tech culture are spreading to

Bengaluru fast especially in the educated middle class. The BDA is planning for

EC to make it a more information technology dominated zone, especially the 161

stretch from EC to Whitefield. Additionally the BDA wants to avoid unorganized development on the west.

Whitefield (WF)

The International Technology Park in WF had 41 high-tech firms in

Bengaluru in the year 2001 and has increased to more than 100 in 2005 according to Software Technology Parks of India. The idea of International

Technology Park Limited (ITPL) was founded in 1994 as a result of the consortium between the Indian and Singaporean Prime Ministers who met in

1992. Finally, it was opened in the year 1998 and is a “work-live-play” business environment (www.intltechpark.com). It is a city in itself which has spread to

almost 28 hectares and has more than 20,000 employees (Department of

information technology, Bengaluru).The International technology park limited is located eight miles from the airport and 11 miles from the central business district. Its accessibility has increased the number of high-tech firms in these wards (www.intltechpark.com).

Many other high-tech firms which are growing in this information

technology block of Whitefield and multinational corporations like Dell have

established their offices. Whitefield has, presently, around 62 per cent of the land

under agriculture and is vacant, but the State Government is playing a vital role

in improving major roads joining the information technology park and Electronics 162

City, and this is impacting the real estate prices in and around information technology park (Table:4.3; Aranya,2003).

International Technology Park at Whitefield

Fig. 4.17 Photograph taken by the author

The International technology park limited is connected by Tech Park Mall which has diversity of amenities, recreational facilities and offers a business lifestyle. It has more than twelve banks and ATMs (national and multinational), diverse supermarkets and food courts (Fig.4.17; www.intltechpark.com).

The information technology parks of Electronics City and Whitefield are

concerned about their employees’ health, and this is evident as they provide 163

recreational facilities, such as health clubs and aerobics studios. Many other cultural and social events are organized for the overall growth of software workers. This has also led to the improvement in the quality of workers, their work and work environment which is the real core of productivity and quality of services. Many cultural events and activities are frequently organized which brings the employees of all companies in the park not only to participate in the events but also gives an excellent network opportunity. Finally, not surprisingly, we find that the newly built Bagmane Tech Park, information technology hubs like

Whitefield, Electronics city or Koramangala derive lots of money and are important sectors of economy driven towards export and create middle class millionaires. It brings money, lifestyle changes and a global culture which is revealed in the information technology architecture, working environment, types of houses and entertainment which is being promoted by the software workers and provided by the domestic and international retailers and is in great demand as it displays high social life style index.

High-Technology and Government Expenditure

The role of high-technology and its creation of intra-urban disparities can also be understood by the role of the state and the local government expenditure pattern. The expenditure on infrastructure and revenue in the 100 wards of 164

Bengaluru illustrates in the next sections whether the government budget is biased towards high-tech wards and ignores non high-tech wards.

Expenditure on Infrastructural Facilities: 2001-2005

A question arises as to what extent the high-tech firms are associated with urban infrastructural development in Bengaluru. Arguably that there would be a direct correlation between the expenditure on infrastructure and rise in the land values near the information technology corridor or in the high-tech wards. The following analysis reveals very significant results. A noteworthy issue is the high- tech firms located in Bengaluru spatially associated with infrastructural facilities or the revenue collected. In the forthcoming section an attempt is made to understand the relationship between high-tech firms and infrastructure expenditure and revenue from 2002-2005 for the 100 wards of Bengaluru. The upper outliers of high-tech firms are all clustered around south and southeast and there is a small cluster in the north and north west and around the central business district of the city (Fig. 4.18). 165

Fig. 4.18 High-Tech Firms in Bengaluru

Data Source: Department of Information technology, Bangalore 166

It is visualized that there will be more concentration of expenditure on those wards which are near the information technology corridor or the adjoining information technology wards. A four year analysis of expenditure on infrastructure from 2002-2005 reveals that there has been no clustering of expenditure in just the information technology corridor, but yes, they have been given a major share apart from the central business district of the city and also on the southern and northern peripheral regions. But, as mentioned earlier, due to the sudden rise of Bengaluru as a high-tech city the pressure has increased on the infrastructural facilities on the city and the city was not ready for it. Therefore, the pressure has increased on the government and private multinational corporations and information technology companies that the infrastructure of the city should be improved to maintain the economic growth of software companies in the city. The budget for 2007-08 has allocated more money on infrastructural developments. The concentration of expenditure on infrastructure from 2002-

2004 was clustered around the peripheral areas and the central business district of the city.

In 2003, the expenditure on infrastructure is more tilted towards east and north east and including the uprising high tech ward Sir C.V. Raman Nagar and many high –tech wards like Airport and Ulsoor. The neighboring wards of high tech firms are also benefiting, such as Gurrupanalaya and Ganeshmandir and lakkasandra and Eijapura adjoining Koramangala which has the largest number of high-tech firms. The north eastern wards adjoining high tech wards and 167

International tech park are also benefiting. The expenditure is sporadic but clustered in a few patches in northeast. But one cannot here conclude that they are clustered near the IT corridors as the IT wards still require a lot of investment especially with rising population and clustering of IT firms. 168

Fig. 4.19 Infrastructure Expenditure in 2003 by Bangalore City Corporation

Data Source: Bangalore Municipal Corporation (Now called Bruhat Bangalore Mahanagar Palike)

169

Fig. 4.20 Infrastructure Expenditure in 2005 by Bangalore City Corporation

Data Source: Bangalore Municipal Corporation (Now called Bruhat Bangalore Mahanagar Palike) 170

Figure 4.19 and 4.20 reveals the infrastructure expenditure for the year

2003 and 2005 by the Bangalore city corporation revealing that it is not concentrated in the information technology corridor but is spreading towards the east and the western part of the city. The total percentage of expenditure no doubt varies in all the wards and it can vary, as here only the infrastructure expenditure has been calculated to the total expenditure in the hundred wards for the year 2003 and 2005. There has been investment to improve the information technology corridor and the central business district, but still, there is a gulf between the plans which is quite visible when one visits the city as it really lacks well developed infrastructure. Overall, the government expenditure on infrastructural facilities has also been invested in core and peripheral regions near the Pete, the central business district and the information technology parks.

Fig. 4.21 illustrates that the mean center for infrastructural expenditure for the year 2002-2005 has not much changed. Basically, they are overlapping each other and are concentrated in the core of the city because it is the seat of governmental and commercial offices and is distant from the mean center of high-tech firms. But, surprisingly the standard deviational ellipse cross the mean center of high-tech firms and looks more of a standard distance circle than the ellipse and all seem to be clustered around the core of the city, especially

Gandhinagar and Sampanigramnagar. It doesn’t reveal that the expenditure pattern is coupled with the location of high-tech firms (Fig. 4.21). 171

Fig. 4.21 Direction and Gravitation of Expenditure on Infrastructure in Bengaluru SDE: Standard Deviational Ellipse Data Source: Bangalore Mahangar Palike (Now called Bruhat Bangalore Mahanagar Palike)

172

Another interesting phenomenon is how the infrastructure expenses in the

Bangalore Municipal Corporation have altered the information technology

Corridors. Table: 4.4 reveals percentage of infrastructure to total expenditure in the information technology wards for the year 2002-2005 and reveals a very interesting pattern. First, the Airport ward had the maximum expenditure on the infrastructure facilities. This expenditure was the highest during 2002-03 and

2004-05. Another ward which had the highest expenditure on infrastructure was

Ulsoor which was adjacent to the information technology corridor. Thus, the expenditure pattern on infrastructure varies among the wards; however, a concentration can be observed near the airport and information technology corridors (Kalra, 2006).

Table: 4.4 Expenditure on Infrastructure to Total Expenditure in Bangalore Municipal Corporation

Information- technology Corridor 2002-03 2003-04 2004-05 JP Nagar 74.86 90.79 80.90 Jayanagar 77.99 20.62 50.79 Koramangala 23.63 88.78 70.87 Airport 95.30 85.21 95.95 Ulsoor 93.39 92.58 91.23

Data: Data provided from Bangalore Mahanagar Palika, (Now called Bruhat Bangalore Mahanagar Palike) Bengaluru. (Note: All numbers are in per cent) Data Source: Kalra, 2006.

The multivariate local indicators of spatial autocorrelation (LISA) analysis,

by considering high infrastructural expenditure also reveals clustering especially 173

near the southeastern part where there is a concentration of firms. These wards also have concentration of infrastructure expenditure but this was not revealed through Fig. 4.21. The Moran’s I reveal that there is clustered spatial autocorrelation (SAC). Therefore, it can be concluded that there is spatial heterogeneity as the pattern reveals with an element of randomness involved

(Fig. 4.22).

The local indicators of spatial autocorrelation (LISA) results reflect that there is a link between the location of high-tech firms and the expenditure on infrastructural facilities in the southeastern part which is adjacent to the information technology corridor. This reflection is not valid for all the wards. Thus the association is true only for the two wards; but surprisingly only one ward out of three has seven high-tech firms; the rest two of them has zero high-tech firms.

It cannot be argued that the government is biased towards high-tech zone but for

Bengaluru to maintain its high-tech position, the infrastructural facilities need to be improved overall in the city.

174

Fig. 4.22 High-Tech firms and Expenditure Pattern 2005

Data Source: Bangalore Municipal Corporation (Now called Bruhat Bangalore Mahanagar Palike) and Department of Information Technology, Bangalore.

Revenue Collection: 2002-2005

The wards which have the largest number of high-tech firms generate high amounts of revenues. Revenues collected here are in the form of fees, fines, property tax, penalties and miscellaneous receipts. The wards which are the highest revenue collectors (Fig. 4.23) are in the central business district, high- tech zone and the uprising wards like Sir C.V. Raman Nagar. The revenue earning wards are also dominant in the central business district of the city where the governmental offices and commercial buildings are located. It is found that 175

the revenue generated is along the information technology corridor but also concentrated in the central business district. Surprisingly, in Bengaluru both the revenue and expenditure have declined as percentage of the state figures, i.e. from 2.7 per cent in 1992-93 to 2 per cent in 1995-96. 176

Fig. 4.23 Revenue Trends in Bengaluru in 2004 Note: The value in Rupees in Lakhs 1 Lakh =100,000 Data Source: Bangalore Municipal Corporation (Now called Bruhat Bangalore Mahanagar Palike) 177

In case of revenue collected the multivariate Moran’s I indicate that there is positive spatial autocorrelation but the local indicators of spatial autocorrelation

(LISA) results reveals that there is a random spatial autocorrelation or spatial heterogeneity. The clusters are spread in the southwest which reveal a negative spatial autocorrelation. There are clusters of high-high in the central business district and in the southeastern city which are statistically significant. It concludes that there is a strong positive spatial autocorrelation between the high-tech firms and the revenue in the year 2004, i.e. the location of high-tech firms and the collection of revenue is clustered together. The limitation is that even one outlier in high-tech firms changes the trend of spatial autocorrelation and one needs to consider while making any conclusion. However, it reveals that there is an association between the revenue generated where there is concentration of high- tech firms, stating that statistically the revenue generated is linked with the high- tech firms but it varies with time. Thus for the year 2004, the result seems to be directly associated with information technology firms and the revenue collected apart from the central business district of the city (Fig. 4.24). These wards, especially which are high revenue earners and have a cluster of high-tech firms, have a lot of commercial activities like office spaces, entertainment complexes, shopping malls and a variety of restaurants.

178

Fig. 4.24 High-Tech Firms and Revenue (2004) Data Source: Bangalore Municipal Corporation (Now called Bruhat Bangalore Mahanagar Palike)

The expenditure pattern results that the money spent on infrastructural facilities is not enough by the government on these information technology corridors at least during the year 2002- 2005. Therefore, the multinational corporations and the high-tech firm owners are also investing their own money in many respects to improve the infrastructural facilities. The congestion and growing traffic in the information technology corridor and the central business district reveals the dire need to improve the infrastructural facilities. It clearly demonstrates that the high- tech firms have not led to any change in the past five years in expenditure pattern, but the trend in the revenue pattern has seen a 179

drastic change from the year 2002 to 2004 as in 2004 it has changed its direction more toward the information technology corridor.

This chapter has reviewed the economy of Bengaluru before

Independence and through today, i.e. its evolution from a textile city to the high- tech hub in less than 50 years. The city has all the economic, historic and politico factors which have shaped its journey of economic growth. The revenues have increased from the central business district because of the location of high-tech firms and many offices of public sector electronic based industries and administrative functions. The government expenditure pattern has revealed that they are not concentrating only in the peripheral zone. The spatial expansion of the city has revealed three foci’s of growth, i.e. Pete, Cantonment (central business district) and the high-tech zone (including information technology corridor and information technology parks).

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CHAPTER 5

HIGH-TECHNOLOGY AND SOCIO-CULTURAL CHANGE

Bengaluru has transformed from a pensioners’ paradise to the high-tech city of the country, and today, almost every week there are five to six information technology companies establishing in the city. This is the city with the largest number of high-tech firms and the largest share of exports in India’s economy.

The rise of information technology firms is shaping and transforming the demographic profile of the city. Its rise has attracted migrants to the city, and consequently, its population has grown. According to a recent study by Kalra

(2003) on Indian language dissemination and diversity, Karnataka is religiously and linguistically diverse followed by the state of Maharashtra. The dominant languages prevalent in Bengaluru are Kannada (regional language), Tamil (Tamil

Nadu), and Marathi (Maharashtra) and, surprisingly, the regional language

(Kannada) speaking population comprises just around 41 per cent (Kalra, 2006,

Srinivas, 2004).

As a consequence, with the rise of multinational corporations, the city of

Bengaluru has not just grown spatially but even its population has been grown from 1, 89, 485 in 1911 to 42,92,223 in the year 2001 (Census, 2001). There has been a phenomenal increase in population especially since 1951.

180

181

This was the census year after Independence that India started getting stabilized. And in 1941, the cantonment area was added to Bengaluru City

Corporation (Fig. 5.1).

50, 000,00

45, 000,00

40, 000,00

35, 000,00

30, 000,00

25, 000,00

Population20, 000,00

15, 000,00

10, 000,00

50,0000

0 1871 1881 1891 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 Year Fig.5.1 Population Growth of Bengaluru City Corporation: 1871-2001

* After 1941 cantonment area was merged in the Bengaluru City Corporation, Data Source: Census of India, 1991.

An interesting pattern emerges when one looks at Fig. 5.3 which reveals the per cent increase of population in the metropolitan and corporation area illustrating the rise of population in the corporation area since 1991. After 1947, major large-scale public sector undertakings were set up in Bengaluru like the

Hindustan Aeronautics Limited (HAL). This not only increased the prospects of economic development but also impacted the population growth. In the decade 182

1941-1951, the government established high- tech industries related to aircraft, telephones, machines and electronics. Later in 1970, high-tech industries, institutes of higher learning, such as the Indian Institute of Science helped

Bengaluru become the science capital of the country, followed by the information technology firms which made Bengaluru the high-tech city. This further led to migration from all over the country not only because of information technology companies, but educational and employment opportunities played a vital role, too. Bengaluru is a cosmopolitan city. It is a multilingual city where people understand all the major languages. This researcher knew only Hindi and English but easily adapted in the metropolis. However, on many occasions it was difficult to converse and mingle. Therefore, to know the regional language is always an added advantage.

Fig. 5.1 reveals that especially after 1991, i.e. with the economic liberalization and the constant rise of multinational corporations and business process outsourcing, the population of the corporation area (study area) increased at a very alarming rate (70 per cent) from 1991 to 2001. Later, in this chapter the researcher analyzes, if the high-tech firms are spatially linked with population distribution? But looking at the growth of population in Bengaluru, three main factors can be mentioned as: 1) natural increase, 2) jurisdictional change, 3) national and international migration (inter and intra). There were changes in the administrative boundary of the municipal corporation as well due to the Bengaluru urban agglomeration. It would be evident from Fig.5.1 that the 183

South Indian states (Tamil Nadu, Andhra Pradesh, and Kerala) are the ones from

where people have migrated most to Bengaluru. Amongst the dominant states

was Andhra Pradesh, followed by Tamil Nadu and, Kerala. North India leads

after South India and the foremost state is Rajasthan (42,885) and Uttar Pradesh

(24,229). Thus, it can be concluded that one of the important factors contributing

to the rise in Bengaluru population is migration and the resultant employment (30

per cent), family movement (29 per cent), marriage (18 per cent) and education

(6 per cent) (Bangalore Development Authority, 1995).

800,000

700,000

Population 600,000

500,000

400,000

300,000

200,000

100,000

0 North India East and NE India West India South India Regions Fig.5.2 Diversity of domestic migrants in Bengaluru: 2001 Data Source: Census of India, Karnataka, 2001.

184

10,000 9,344

9,000

8,000

7,000

6,000

5,000 Population 4,000

3,000

2,000

1,000 834 822 708

124 0 Asia beyond India Africa North America Oceania Europe Continents

Fig. 5.3 International Migration to Bengaluru Data Source: Census of India, 2001

It is not just the migrants from North and South India who are making

Bengaluru their home, but also migrants from other countries of Asia, Africa and

North America (Fig.5.3). The Asians are surpassing others and dominant among them are from Nepal (3,549) and from Pakistan (1,584). Nepal is the largest migrant population as the language is not a problem in the city. Nepali language is one of the scheduled languages in the Indian constitution and Nepalese don’t have to have a visa to come to India and vice versa. So this has made the entry of Nepalese population very frequent, especially in terms of occupation and businesses. Second largest after Nepal is Pakistan, a part of Undivided Indian till

1947. It also shares the same language and culture apart from the borders. The 185

USA (408) leads in North America followed by African and European countries

(UK) (Census of India, 2001). This reveals that with the incoming of multinational corporations, people are migrating from all over the world and bringing with them their global culture and creating demand for world class services and global ventures (Business Week, 2005).

Thus, Bengaluru is a diverse city with people from all parts of the world. A city with 100 wards has been growing but population is very unevenly distributed.

The concentrated pockets of very high population are in the southern part of the city in wards like J.P.Nagar, Jayanagar, BTM Layout, Hebbal, and C.V.Nagar.

These wards contain high-tech industries with good residential localities. The surrounding wards also contain high population, except in the north.

There is another cluster of high population in the ward called C.V Raman Nagar, which is one of the uprising high-tech wards. The Peenya industrial region has also moderate population with concentration in south, southwest and northern part of the city having good residential and educational institutions. 186

Fig. 5.4 Population Distribution in 100 Wards of Bengaluru Data Source: Census of India, Karnataka, 2001.

The Fig.5.4 reveals that the central business district comprising of

Richmond town in the center of the city and Sampanigaramnagar, the 187

surrounding ward, has less than 0.8 per cent of the population. They are the wards which are commercial and business in nature and don’t have high density apart from the upper class and upper middle class who live in these two wards.

Two visible pockets of clustered population can be seen: one is the western part and the other is the northern part. The southern part also has residential areas, such as Koramangala, Jayanagar, and J.P.Nagar, which are not very crowded but are considered to be very good residential colonies. The north eastern and south eastern parts are sparsely populated and are now the targets of the high- tech hubs.

High-Technology and Socio-Cultural Disparities

High-Tech Firms and Population

The population of Bengaluru Municipal Corporation, which covers 100 wards, contains 75 per cent of the total population of Bengaluru Urban agglomeration and is very unevenly distributed (Census of India, 2001; Fig.5.3).

With the rise of Bengaluru as a high-tech city, there has been tremendous migration from within and outside the city. The Fig 5.5 reveals the local indicators of spatial association and divides into four categories. Amongst all the wards

Madivala and JPNagar have strong positive spatial correlation between the high- tech firms and population distribution at 95 and 99 per cent significance level.

But there is a limitation as one would have different clusters of wards which have 188

high, high-tech firms and population as the Fig. 5.4 reveals using the Queen’s

Contiguity. Also, using Rooks quintiguity and K Nearest Neighbors give us a different pattern emphasizing on JP Nagar and BTM Layout.

Thus it can be argued that the different weight matrices (Rooks, Queen nearest neighbors) would show a different set of wards according to their neighboring impact. One can also observe low clusters of high-tech firms and population as it is the old part of Bengaluru, i.e. the palace area on the western outskirts are less developed, as compared to the eastern part developed by the

British as the cantonment. It also reveals an uneven pattern as 72 wards have no high-tech firms at all. Therefore, the population concentration and high-tech firms are clustered together, as the high-tech firms are located especially in the upper class residential localities where there are well developed infrastructural facilities. 189

Fig. 5.5 Spatial Clusters of High-Tech Firms and Population Data Source: Department of IT, Bangalore and Census of India, 2001.

High-Technology and Educational Status

As discussed in Chapter 2, many theorists have stated that educational institutes are one of the major site factors for high-tech firms located in

Bengaluru. Accordingly, it is argued that the high-tech firms are located only in those wards which have educational and technical institutes and, consequently, the level of literacy will be high in those wards. It is to be seen whether this argument really fits the case of Bengaluru, and, if so, is this really leading to further deepen the already prevailing disparities in Bengaluru? 190

Bengaluru has an 85 per cent literate population. It has one of India’s highly rated and largest numbers of science and technical colleges. Karnataka and Andhra Pradesh states in India were the first to start private engineering colleges and were allowed by the Government of India (Saxenian, 2006).

Secondly, as mentioned in Chapter 2 there are inter- state disparities in terms of educational institutes. An important characteristic, for such a location is a strong regional dimension through 400 engineering colleges in Southern states and 77 engineering colleges in Bengaluru which produce 29,000 graduates annually

(Saxenian, 2006). Bengaluru has a diverse ethnic make up because it is home to all of India’s famous educational and technical institutes which draws a drastic migration of students, information technology workers or the new Argonauts from all over the country to Bengaluru (Saxenian, 2006). Seen in this way, the locational freedom is related to human capital in the urban and regional economy where it is the skill possessed by the population which shapes the landscape

(Malecki, 2006). Today Bengaluru is considered to be one of the hotspots of the information technology sector and credit goes to high quality and uniform educational standards prevalent in the city (Desai 2006; Saxenian, 2006). 191

Fig. 5.6 Spatial Clusters of High-Tech Firms and Literate Population Data Source: Department of IT, Bangalore and Census of India, 2001.

The high-tech firms are basically under constant pressure to create products and services, and they further depend on the skilled professionals for creativity and, thus, get attracted to regions with many amenities. These amenities are not just limited to the physical environment but also include diverse opportunities for consumption and interaction (Malecki, 2006). This is true, especially in the case of Koramangala, Jayanagar, J.P.Nagar, Airport and the information technology corridor since the information technology firms are attracted to these wards which are already rich in literacy and have good infrastructural facilities required for setting up any information technology firm. 192

The Morans, I analysis result into a clustered pattern of high-tech firms and the percent literacy prevalent in Bengaluru. But the LISA results reveal the clusters of high-tech firms and literacy rates are positively spatially correlated in IT corridor and the neighboring wards. Surprisingly, high illiterates and high-tech firms are also found especially down in south and southeast of Bengaluru (Fig. 5.6 and

Fig. 5.7). This implies that an illiterate population is also present where the high- tech firms are located, so they do not completely locate in those wards which are rich in literacy, but are influenced by the prevailing amenities of the wards.

Fig. 5.7 High-tech Firms and Illiteracy Data Source: Department of IT, Bangalore and Census of India, 2001.

193

High-Tech Firms and Slums

Bengaluru, due to the rise of high-tech firms, can be labeled as a prosperous and modern Indian city, but it is won’t be proper to say, as extreme poverty prevails in many parts of the city (Madon, 1997). The prosperity of the city due to its scientific community has not benefited the poor population directly or indirectly. The slum population in 1991 was 0.52 per cent which rose to 0.79 per cent in the year 2001, but it is still less as compared to other metropolises like Delhi, Mumbai, Kolkata and Chennai. According to various non-governmental organizations, the recent internationalization of industrial activities had a negative impact on the poor as less money was spent on improving public services for their benefit (Madon, 1997). A large segment of the urban poor population is engaged in informal sector activity. This class of marginal workers has not benefited from the increasing high-technology activity. Instead, this has led to polarization among social classes in the city.

Interesting results have been derived from the spatial autocorrelation analysis of literate and illiterate population in the city. It reveals that high-tech population is concentrated in those wards which have high literacy as well as illiterate population. Therefore, it cannot be confirmed that the high-tech firms are associated only where there is high literacy, but its presence is quite significant as the spatial clusters reveal (Fig. 5.7).

In contrast, there is large number of slums as well as illiterate population where high-tech firms are located (Fig 5.7). The main reason is that the high-tech 194

firms are not only clustered but most of them are located on the outskirts of the city (municipal corporation limit) and this was also the historic place where the

British came and settled. There are clusters of slums near the high income localities as the wealthy people employ a lot of servants, and low income people do not want to spend huge amount of time commuting. In an interview with

Professor Surinder Bhardwaj (2007) he emphasized that “the slum dwellers find it easier to locate very close to the high income localities, unless the municipal corporation clears their concentration.” Another important factor is that there is housing shortage in the city of Bengaluru and the people especially the unskilled labor cannot afford expensive houses and rents and thus lands into poor housing conditions dwellings and one can still see people sleeping on the streets and begging in this high-tech city which was very sad to observe.

But, Before the location of high-tech firms, these wards were already developed with infrastructural facilities, cluster of slums (illiterate population) i.e. low skilled labor migrants from nearby areas. This is a typical characteristic of

Indian cities as slums are an important constituent of any South Asian city as compared to western cities. 195

Fig.5.8 Slum Population in Bengaluru

Data Source: Census of India, 2001 196

As in a typical bazaar-based model of south Asia, there is a concentration of slums and squatters on the outskirts of the city. (Dutt, 2001 and 2003). This model fits to some extent in the case of Bengaluru as slums are concentrated in

Koramangala (high-tech ward) and on the western part of the city as it is less developed as compared to the eastern part. Interestingly, the ownership of land in the slums of Bengaluru is around 16 per cent in the study area (Bangalore City

Corporation) and the rest around 37 per cent on the private land and 16 per cent on the Bengaluru Development Authority land (Fig.5.9). An analysis of the location of slums exemplifies that they are generally located in proximity to the residential and commercial areas and around 14 out of 159 slums were located near the industrial areas (BDA, 1995).

197

Others 27%

Private land 37%

Bangalore city corporation (study area) land 16% Govt land 4%

Bangalore development authority(BDA) land 16%

Fig. 5.9 Location and Ownership Pattern of Slums in Bengaluru

Data Source: Bengaluru Development Authority, 1995

In any Indian city, the inner core develops because of the concentration of trade and commerce. The wealthy live in juxtaposition with the poor in the information technology corridor of Bengaluru. Thus, in the information technology corridor is found the clustering of high-tech firms, Illiterate and literate population and the location of slums all in one ward of the city. Slums are generally considered to be an urban blight in a beautiful city, which requires lot of improvement. The Koramangala ward, with the largest number of high-tech firms, 198

has also large numbers of squatters and slums (Fig. 5.10 and Fig.5.11). But, the slums that are present in the information technology corridor are also a great source of employment, and the employees are in dire need of various unskilled and less skilled services like domestic servants, cleaners, shop assistants and porters.

Thus, the presence of high-tech firms, slums, educational institutes, literate and illiterate population together provides a strong argument that high- tech is not the only leading factor in creating intra-urban disparities. The main factors are the historicity, infrastructural facilities and amenities, transportation sector, residential and commercial land values, planning framework of the city, and the newly developed infrastructures.

Many commercial and infrastructural facilities were already located in those wards (information technology corridor) and high-tech entrepreneurs have taken the benefit of the agglomeration. Even the concentration of scheduled castes and scheduled tribes are spatially associated with the high-tech firms.

Scheduled castes and scheduled tribes were considered outcasts and were excluded from the social structure of the Hindu society and were denied educational, social and economic facilities and were delegated to perform the menial jobs in society. But now the scenario is changing as government has kept special seats in all fields for scheduled castes and scheduled tribes and is mentioned in the constitution of India. 199

Thus, there is spatial cluster impact associated with the location of slums and illiteracy. It is abundantly clear that the new high-tech firms grow in number especially in those areas which are adjacent to already existing high-tech wards

(information technology corridor) and creates transformation within the wards due to the spillover effect. The high-tech firms now spread outward towards the city limits because of the rise in real estate prices, lack of sufficient office space, cheap rent, less congestion and information technology parks concentration.

Fig. 5.10 LISA Results of High-Tech Firms and Slum Population Data Source: Department of IT, Bangalore and Census of India, 2001.

200

Fig. 5.11 Socio-Economic landscape of Bengaluru Data Source: Department of IT, Bangalore and Census of India, 2001. 201

High-Technology and Socio-Cultural Transformation

Today, we are living in an urbanized world of sprawling metropolises and these are the locus of contradictions where all do not benefit from the new economy (Castell, 2001).The new economy emphasizes two elements of technological change i.e. the new network phenomenon and the knowledge - based economy. Malecki (2006) suggests that technology has facilitated many of the activities which have enabled relations between people, firms and organizations and they all spread amid different locations and great distances

(Malecki 2006). There are various pluses of technology which have transformed one’s daily life. Firstly, it has extended beyond the local economic activities of people. Local economic activities, Business Process Outsourcing (BPO) and call centers in Bengaluru are connecting people from different parts of the world.

Secondly, it has changed the accessibility and has made it so easy to overcome the physical distances (Couclelis, 2000). In attempt to unravel this question,

Malecki (2006) claims that technology is not creating a new world, or remaking completely the old one. However, the influence of technology is more difficult to understand in an intra-urban context. But this research is a step to exemplify to what extent high-tech firms have led to create intra-urban disparities and transform the socio-economic fabric.

The increasing export of software is an indicator of the competitiveness of

Bengaluru scientific expertise, strength and capability in the arena of knowledge economy. The rising number of multinational corporations has not created ripples 202

in the local economy but has impacted globally by their presence and is called the fastest growing technology hub (Aranya, 2003).

Table: 5.1 Voice of People: Is High-Tech changing Bengaluru?

Positive Negative Impacted relationships, made more commercial , less time for each Job Opportunities other Bangalore: A global Brand(outlook of people have changed) Rise in real estate Work culture improved Lack of respect for elders More freedom(Job) Traffic Congestion More recreation in work place Pub City Rise in computer education Rise of Nuclear families Good salary(MNC and IT firms) More demand for privacy Good working Environment Dress decorum transforming Made people more open minded Decline of local brands Gap increasing between high -tech Inter cultural marriages and non high-tech wards More money invested in More brands and choices infrastructure for High-tech wards Fitness centers, Men,s beauty parlors Poor are impacted Air conditioned malls Formal relationships Gender equality(Men sharing the Thinking moved from Saving to household chores) Shopping Migration from nearby cities and states Rise in cost of living Growing Horizontally Unhealthy competition Decline in higher education(fewer More of Professional education PHDs) Cultural Shocks: More divorce rate, Open and Transparent relationships separated and unmarried

Source: Compiled from the interviewees in Bengaluru (2004-2006) by the author

Hence, the high-technology has just not increased size of the economy,

GDP of the state, exports and volume of economic activities but is also

transforming the city physically, socially and culturally and Table 5.1 summarizes 203

the voice of the people of Bengaluru, a glimpse how they feel that Bengaluru has changes with the high-tech firms. These new activities transform the urban landscapes of the city which are outlined in the following sections.

A Creative Bengaluru

Bengaluru is not just an information technology capital city of the country; it has much more to offer. It is one of the creative cities as it has its three ingredients, i.e. talent, technology and tolerance. Creative class consists of two components: the super creative core includes scientists and engineers, university professors, poets and novelists, artists, entertainers, designers, think tank researchers, analysts and other opinion makers; secondly, there are creative professionals who work in a diverse variety of knowledge intensive industries like high-tech firms, financial, health, legal and business sectors. According to

Florida’s definition of super creative core and creative core, Bengaluru can be called a creative city (Florida, 2003). It has the reputation for containing Asia’s leading educational institutes, in terms of engineering, aeronautics and space.

The city has transformed from one of the best residential cities to the high-tech city and is denoted as the pride of India. No doubt, Bengaluru has talent and technology as it has the entire high-tech professionals, best information technology schools, Indian Institute of Science Campus, Indian Institute of

Information Technology, largest number of engineering colleges and a hub of art, and culture. It is attracting almost five information technology companies per week (Bangalore IT.com, Bengaluru, 2006). It has an excellent number of 204

talented English speaking information technology professionals and a more stable and liberal socio-cultural environment (Dittrich, 2007). Ashok, an IBM IT engineer viewed the importance of computer education said “definitely, in a place like Bengaluru, a person not knowing about computers is almost treated like an illiterate”. He further argued that “Computers are the future and everyone needs to know at least the basics about computers. It’s become an essential part of life i.e. food, clothing, shelter, air, water and Computers”. So this was one of the

Indian Institute of Science graduate and was working in an MNC and very young around in late twenties. This leads us to think how computers are becoming a dire need apart from the basic necessities.

Historically speaking, Bengaluru has always welcomed people of different cultures and had a splendid cultural heritage. It is an excellent example of the amalgamation of the Aryan culture of the North and the Dravidian culture of the

South. It is considered to be a great city for writers and painters, and a hub of art, culture, theatre and drama. Some of the great names in arts are from Bengaluru like Ram Gopal, Shanta Rao and the list just goes on (Phalaksha, 2003).

The principle of secularism, broad mindedness and catholicity are present today and was also followed by the ancestors of Karnataka (Phalaksha, 2003).

There are endless examples of tolerance and coexistence of various religions and languages, which were never a hurdle in the daily lives of the people, and are quite evident even today. Karnataka is also considered to be linguistically and a religiously diverse state (Kalra, 2003). 205

Table: 5.2 Linguistic Diversity amongst the respondents

Atleast 2 18 More than 3 36 More than 4 46 Total 100

Almost 46 percent of the respondents spoke more than 4 languages and

they were English, Hindi, Kannada, Telugu, Tamil, Malayalam, Nepali, and Oriya.

The dominant were all the Dravidian i.e. all were from the southern region, the nearest neighbor of Bengaluru in addition with Hindi the national language and have become popular because of Bollywood and Oriya were spoken by the migrants from Orrisa. 36 percent spoke more than three languages and at least

18 percent of the respondents spoke at least two languages and the most dominant combination was English, Kannada, Hindi and Telugu. Thus one can conclude that indeed Bengaluru is linguistically diverse. Ashok an IBM (MNC) employee viewed that he has no one religion and said “I am a Universal person” said he believed and respected all religions. Thus many other of the other interviewees believed in all religions rather than limited them to anyone revealing that this city is highly diverse and very tolerant as compared to other cities of the country.

It is the only metropolis which is also like a hill station as there is no need of fans for almost ten months a year and is an attractive tourist destination.

During consecutive visits to Bengaluru (2004, 2005 and 2006), this researcher felt safe to live, and it remained cool throughout the day. 206

This is the city of traffic congestion and collapsing infrastructure; nonetheless, people adjust, and they wait for five to ten minutes on the red light and feel comfortable. It was quite surprising to find nobody losing their cool in public. Jagadeesh (1998) in his memoirs on Bengaluru refers that the “people of

Bengaluru are mild, balanced and affectionate as before.”

Diversity in Population

Now one does not find only Bangaloreans in Benagaluru, but there is a wider array of Tamilians, Delhites, Keralaites, Andhraites, and also people from

Europe, , and America. The shopping malls and food courts are crowded with diverse populations from all regions, countries, languages and religions. Almost all interviewees chosen know three to four languages. It was not only with the academicians and high-tech workers but also with the service class like the auto-rickshaw driver and even the common man. This researcher did not know the local language Kannada but was able to converse in Hindi and English.

There were some ethnic issues as well that was a cause of concern with some interviewees. Some of them expressed that the real Bangalorean culture is dying as most of the people are coming from different regions and taking away their food and languages and imposing other fast food, culture and regional languages.

207

Transformation of Work Culture

The MNCs has brought a drastic change in the work culture overall especially in the domestic IT companies and have made them very competitive.

Many of the interviewees were of the view that MNC is the best to Bengaluru as it is bringing a very open working environment with more of work rather that time bound. More recreational activities are provided which eases the stress level and make the job enjoyable which is very positive change in the work culture and new standards are being implemented in majority of the IT firms. But Rajesh, a software employee from IBM and migrated from Chennai viewed that the “MNCs also terribly exploit and sometimes it is stressful, but it does add to the social status and boosts the confidence of a person and the scope to go abroad increases”. So many youths like Rajesh viewed that there is social status linked with an MNC as compared to any domestic company till it is not of similar status like Infosys, WIPRO and Tata Consultancy Services and thus the MNCs are getting their skilled cheap labor with no trouble. Rajesh also viewed that the matrimonial prospects of him and many of his colleagues and friends have increased and he hopes of a getting a good match as he works in a MNC.

Visible Income disparities and Wage Inflation

Upadhaya (2003) states that high-technology’s well paid and cosmopolitan workforce is creating a new category of entrepreneurs emerging from the middle class.The working middle class people suddenly become rich and create 208

a widening gap between the workforce employed in high-tech and non-high-tech firms. Thus, high-tech has brought Bengaluru into the limelight globally and thus produced large income disparities and uneven development. There exists drastic inequality between groups of different socio- economic status, extreme poverty and critical problem of civic deficiency within the State of Karnataka and its capital city of Bengaluru.

The changing income disparity is revealed and reflected in the newly created commercial busineses, malls and recreational activities. Hence, the income disparity is further segregating the society (Kuttaiah and Sommers,

2000).

The altering image of Bengaluru has also influenced the wage structure and has created uncontrolled wage inflation, as the multinational companies provide comparatively higher salaries to its employees, and they triple the salary in three to four years more quickly than the State Government. It is a major factor for the high skilled graduates to work in these multinational corporations. This even leads to social tension between the State Government and the multinational corporations (Madon, 1997) because a junior software developer earns around

Rs.10,000 per month whereas the senior manager earns Rs 500,000 and a semi-skilled employee earns only Rs. 4000 a month and a female domestic maid earns only Rs.300 to Rs.1000 (One dollar is equal to 45 Rupees in 2007). The better opportunities in multinational corporations, the brand name, and use of the state of the art technology, work environment and a chance to migrate to the 209

West for better employment opportunities are some of the pull factors providing the incentives for young professionals to work with international corporations.

Hence, the Indian firms have to deal with low skilled manpower and the government firms become just a training ground for the new professionals

(Patibandla and Petersen, 2002). This trend has led to a difference in opinions of the government, such as the State Government in Karnataka which is committed to support the multinational corporations. Deepak, a young employee of the

Bruhat Bengaluru Mahanagar palike viewed the change what MNCs has brought in Bengaluru that “It’s changed a lot in the lifestyle of young people. We can see lot of girls working in the night shifts as it was not earlier”. People prefer MNCs as they pay and other facilities are good and they are paid well compared to other local firms. Ashok, an IBM employee argued regarding how MNC’s have changed Bengaluru said “Oh yes! MNC’s have created a lot of job opportunities and made Bengaluru a global brand”. He also viewed that MNC’s have changed the ways Indians look at the job and the MNC’s have created their own hierarchy in Indian society”. This led the researcher to think that the MNCs have also brought with them the work culture which is positively impacting the city , its workers and the people in general and one could feel that when one lands in any

MNC or domestic IT company and the researcher was amazed looking at this new work culture. 210

The increase in wage differences between multinational corporations and

Indian firms has also led to inequality between different socio-economic groups within the city and the region of Karnataka in general (Madon, 1997).

Table: 5.3 Occupational diversity in Bengaluru

No. of Types of Jobs respondents Multinational Corporation 16 Private Jobs 15 Government 10 Students/Unemployed 9 Total 50

The different wards of Bengaluru reveal the disparity. For example,

consider the case of Koramangala and any other ward in western Bengaluru.

They are strikingly different as one looks like a city and the other a small village

or a town. The facilities, especially the commercial and educational, vary also.

The rising income disparities are also leading the decline of legal rights and

rising corruption (Dittrich, 2007).

Diverse Gourmet and a City of Bars

Bengaluru is also considered to have the largest number of eateries

(Jagadeesh, 1998). There has been a flood of diverse food chain and food courts

in the city. Whether it is Forum Mall in Koramangala, or Bangalore

Central near MG Road, the food court and the eateries are always crowded.

Connoisseur cooking and eating are rising in Bengaluru, with diverse cuisines of 211

not only North and South India but also Mexican and Italian. Apart from cuisine from other parts of the country, Chinese cuisine is becoming very popular

(Srinivas, 2001).

Bengaluru is transforming very rapidly with the presence of global chains, such as Coca-Cola, Fried Chicken (KFC), and Sony and Ford companies. There is a great diversity of the eating place from big, small and medium hotels to self- service, footpath, house and mobile hotels. There are old ethnic restaurants like MTR (opened in 1905 as Brahmin Coffee Club) which have now become international. Others VV Bakery, Udupis and Kamats which have spread with a chain of hotels all over Bengaluru serving Indian and Chinese

(Jagadeesh, 1998). They serve excellent and delicious food which suits all price ranges. The non- air conditioned rooms provide cheap good food but AC rooms provide cool and quiet environment with more time in hand. This is not very much prevalent in the capital city of Delhi, and it is very pricy, too.

Pizza Hut is an additional exciting example of cultural globalization which is dominant in all the major cities of India (Fig.5.12). It is a household name apart from Dominos. There are ten pizza huts in Bengaluru and one on Brigade road

(CBD). They are always crowded with people of diverse age groups and nationalities which were not dominant ten years back. 212

20

18 18

16

14 13

12

10 10 No of Pizza Hut number

8

6 6 55 44 4 3

2

0 Mumbai New Delhi Bangalore Chennai Pune Hyderabad Kolkatta Gurgoan Noida cities

Fig. 5.12 Pizza-hut chains in India Data Source: Pizza Hut.com

The new food joints with variety and quality are increasing every day as there are clients who are ready to pay more and take risks for new flavors.

Additionally, Bengaluru is often called the pub capital of India, as it has almost 3000 bars, pubs and wine shops and more than 62 dance bars and a new one opens every month. There are more than 25 dance bars in the central business district (Richmond area), and with rising high-tech firms, they are mushrooming even in good residential areas like Indiranagar, Jayanagar, and

Malleshwaram which is a cause of concern, too (Deccan Herald, 2005).

213

Recreation and Diverse Comfort Level of the City

This is a city where at least in the information technology corridors and the central business district, womenfolk are found to be dressed in clothing styles, which if worn, in any small town or rural area or even in non high-tech wards would make people stare. But, high-tech has opened the door of not only technology and disposable income, but it has also catered to diverse cuisines as well as a more open Bengaluru.

Table: 5. 4 Recreational Activities of Bangaloreans

Modes of Percent of Recreation respondents Parks and family 22 Movies 26 Shopping 16 Bars and Pubs 20 Temples 16 Total 100

Source: Interviews from the respondents by the author

The mode of recreation has transformed in both the high-tech and non

high tech wards. There were interesting results which varied for the fifty respondents from visiting to temples, bars, parks, family, shopping and going to

movie theaters. 22 percent of the respondent liked to visits family, friends and

going to parks, whereas16 percent like to go to temples and do shopping. 26

percent inclined to visit theaters and watch movies which is quite affordable and

a very famous recreational activity of an average Bangalorean and 20 percent

liked to visit bars and pubs which has become more popular since the rise of 214

high-tech firms(Table:5.4).

But visiting any other ward apart from Koramangala or Jayanagar, and even Rajajinagar (though a high-tech ward) and Nagarbhavi (non-high-tech ward), one finds a completely different culture prevailing in those areas. One of the interviewees from Infosys was comfortable regarding the dress code and expressed that “we are not wearing western dresses to promote it, but it just makes it more professional” as they were supposed to wear business dress four days a week. The most surprising issue here is the question: is the Indian attire no more professional? There is another view from the students of Bangalore

University and Institute for Social and Economic Change at Nagarabhavi, and it is they rarely visit the shopping malls like Forum and MG Road. It is only occasional. These areas look as if they are not a part of Bengaluru. Thus, the change in urban infrastructures and establishments are visible as one drives from the Airport towards the western part of the city and even to an information technology ward called Rajajinagar.

There are diverse views from people of different walks of life as one of the officials from Bangalore Mahangar Palika and now Bruhat Bangalore Mahanagar

Palike (BBMP) stated that there needs to be a “dress code,” especially in places of employment to maintain the decorum. But Health Commissioner of BBMP, Dr

V.P. Ikkeri, who just returned back from the USA after an official visit, expressed that he was quite happy with the growth in Bengaluru and believed that one needed to change with time. 215

Rising Number of Automobiles

There has also been an increase in the number of automobiles since 1980 which has impacted city structure, its growth, and pattern. Especially, the growth of the information technology industry has also produced a great rise in the commuting pattern and, hence, urban sprawl. The two and three wheeler (motor vehicle) has become quite affordable and is now within the reach of middle class and upper middle class families. Cars have also become quite popular and affordable and now middle and upper middle class, generally, own two to three cars in each family (Fig.5.13).

Table: 5.5 Means of Transport used for work by respondents

Percent Modes of Transport respondents Car 26 Walk 20 Bus 14 Others(scooters, motorcycles, chartered buses) 40 Total 100

Data Source: Interviews from the respondent by the author

The table 5.5 reveals that 26 percent of the respondents use car to go to

their works and 40 percent use other modes like motor cycles and chartered

buses(buses started by the company for their employees) and Taxis, whereas 20

percent live close to their work and walk and 14 percent used public transport.

Traffic has really increased in Bengaluru especially after the rise of high-tech 216

firms and more people now are opting to take other means of transport rather than use their own vehicle which really creates lot of stress on very busy roads.

The statistics reveal that the number of registered motor vehicles has increased from 550,000 in 1991 to almost 900,000 in 1996 resulting to traffic congestion (Ministry of Transport, Karnataka, 2005). The State Government is putting all its efforts into curbing congestion by constructing flyovers and has been successful. This implies that strict measures need to be taken to curb the increasing traffic to maintain and manage urban Bengaluru and keep the infrastructure in a healthy condition.

16.00

14.00

12.00

10.00

Two wheelers 8.00 Cars

Percent Jeeps

6.00

4.00

2.00

0.00 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Year

Fig. 5.13 Increase in use of vehicles for individual (private use):1993-2003 Data Source: .Department of Transport, Bengaluru, 2005. 217

Gender and Family

Not surprisingly, with globalization and the rise in multinational corporations in Bengaluru, it is not only the economy, which has benefited but the people have also felt the impact in terms of cultural traits, such as food intake, dress style, music, urban night life, increase in the sense of individuality and privacy within households. The mental imageability of a youth is also changing tremendously. The sudden rise of young and wealthy computer engineers as a result of information technology industry is leading them to the popular culture, fewer familial obligations and making them materialistic and inspiring them to be consumerists and individualistic.

There is now quite a lot of evidence to suggest that high-tech firms are also impacting the family system. The joint family is splitting to become nuclear, and this is drastically transforming and endangering the traditional values and ethics of the society. However, the comments of some of the interviewees are quite striking. One software worker Rajesh was a migrant from Tamil Nadu and

Ashok a Kannadiga from Bengaluru and both respected and were tied with their family values and traditions. They also mentioned that it would be rare if they married a non- Tamilian or non- Kannadiga, respectively.

The shift in the role of gender towards services has been the major change in the labor markets. Female participation in the labor market has increased. More women are working as software developers and earning equal 218

or even more than their male counterparts. Professor Vinod Vyasulu, now a consulting economist, makes a case that the rise of information technology has inspired the menfolks. They now help the women in the household tasks and, thus the traditional roles have been challenged. Earlier, it was a big taboo both in rural and urban areas; now a big positive change is taking place. The role of women is becoming strong as they are now entering as high-tech workers.

Unmarried young women working in Infosys and Wipro migrated from Delhi, viewed that the working culture is very good and has strong values. This is a positive change in the working environment especially for women as it is informal as well as professional and the security level is high. Women are also on the top position in the high-tech firms. Hema Ravichandar, a senior Vice-President and a group head of HRD (Human Resource Development) of Infosys illustrates her experience reaching the top. She says, “Being a woman is a tough job, and being a woman professional is tougher and trying to break the glass ceiling on your way up the ladder of your chosen career can prove to be the trial of a lifetime.”

She also makes a case that though information technology does offer a better platform for women to rise; it still offers its own set of challenges to women with ambitions.

Many of the women surveyed by Data Quest (2006) stated that they have never experienced any kind of harassment in the work place; but Neela

Bhattacharjee, Senior Vice President, of Global Business Development says,

“issues of harassment of women are the result of social conditioning.” Some say 219

that they experience a very subtle exclusion from their male colleagues. But,

Meena Ganesh, CEO of TESCO believed the choice is up to the women on how they handle the situation (Data Quest, 2005). Many women claimed that one cannot reach the height of her career as well as have a successful married life with kids without the support of their families.

Another interesting social change is the rise of high-tech couples. In a country where arranged marriage is quite popular and dominant, high-tech has brought a transformation. Now with the rising high-tech professionals, they are no more dependent on the horoscopes but now it is salary matched or it can be called as a match of equals. Today, in India more than 20 per cent of information technology professionals are married to another information technology worker; however, it may or may not be in the same company. But they are benefiting from each other in improving and complimenting their careers. One of the high- tech couples, Nivruti Rai of Intel states, “I could do well in the company; I had an extra advantage of discussing solutions to my work related problems at home and applying them at office” (Venkatesh et al., 2006). It is basically leading to advancement and Kyndon Saldahana, of Kanbay argues that information technology is changing the husbands and making them more supportive of their wives who are climbing the ladder of success faster than them. Tech couples are very satisfied and are finding safe haven not only in each others’ aptitudes but also in diverse career choices, job opportunities and developing a network of contacts (Venkatesh et al, 2006). 220

Transformation of Bangalore to Bengaluru

High-technology and economic globalization in Bengaluru have threatened the regional culture and language which has resulted from Bangalore to

Bengaluru. There are various views about the changing culture of Bengaluru.

The famous writer in Kannada language, U.R. Ananthamurthy, emphasized that people who are moving into Bengaluru do not relate to the culture of Bengaluru, and he finds that this is not very favorable either for them, or for the native

Kannadigas. One of the interviewees, Ashok, a young software worker in Oracle

(MNC) and a Bangalorean, expressed that with the rise in migration the people of

Kannadigas are really feeling threatened because of the impact on cultural values. Thus the change of name is being welcomed by many, as some observe it as a good change and some consider it snatching jobs from the westerner; others view that Bengaluru was the one city which made it the India information technology capital. Still the change of name has not come into force immediately as per today, and it will take some time for the city to change completely from

Bangalore to Bengaluru.

Rise of Tech Culture

High-tech does not just create a ripple effect and attract people from all parts of the country, but it also creates low skilled jobs. As one of the 221

interviewees argued that the youngsters who can speak very good English are given training in the technical skills and are being employed in many call centers and business process outsourcings.

A further change which is quite visible is that high-tech companies are taking full care of their employees. They are providing them cultural and entertainment facilities, too. For example, the Infosys, an information technology firm, has all the facilities, such as swimming pools, gyms, aerobics, etc. and now the dance culture is becoming quite common with the rising software firms. The

Bangaloreans are discovering a taste for tango, salsa, and ballets. Many western dance training schools have been located in the city, especially in central business district and Koramangala. There are weekend classes to suit everyone’s needs. It is not just software firms which are the sole reasons for the dance culture. However, they have provided enough disposable income to the youngsters who are working in the high- tech industry. Many of them are migrants, unmarried and are in the age group of 22-35. As a result, partying, bars and pubs, shopping in malls have become quite synonymous with the tech culture. The outcome of these changes is that a tech culture is increasing.

Another change running in parallel is the increase of beauty unisex salons which were not common till 2000. But now, men and women go together to the same salon. It is no longer a taboo for men to go to beauty parlors especially in this high-tech city. In Koramangala’s Forum Shopping Mall, many men come to the expensive salons for facial services which are a striking change. The basic 222

argument is that high-tech alone cannot be blamed for it. This change has become quite visible with the rise in income, leading for self-growth, self- entertainment and pampering oneself which is visible. The amenities and facilities are rising especially in the high-tech wards and the wards which are neighboring them, and others are trying to match with those, but it seems a long way to go. Even the billboards have gone quite bold which was not the case earlier. It is not in case of Bengaluru but is dominant in all the major metropolises of the country.

Return of Expatriates or Brain Circulation

The increase of high-tech firms in Bengaluru has created jobs for not only local people and increased migration from all over the country but has also become a centripetal force for the NRIs (Non-Resident Indians) as they are returning to India. High-tech has become one of the major regional loci for bringing back the expatriates to work from the US to Bengaluru. As Freidman

(2006) in his book The World is Flat has revealed the majority of the engineers and computer scientists in Silicon Valley are the Indians. India has always been a centripetal force for the return of its people. Culture, family or love for the nation are reasons people return, and they become idols and mentors for the emerging youth of the country. 223

Another move of the expatriates to India was “the combination of high-tech talent with effective costs which attracted us to India and I have to tell you that it is “talent, talent and talent,” says Radha Basu, a senior official in HP (Saxenian ,

2006). India was famous for brain drain, as many educated Indians went abroad for better opportunities and never came back. But Bengaluru started pulling them back. It is estimated that around 10,000-40,000 US residents of Indian origin have moved to India from the last two years (NASSCOM, 2005). NASSCOM

(2005), reports that there were around 5000 overseas Indian professionals with approximately five years of experience who moved back to India from the USA in

2002-2003. Intel, an MNC in Bengaluru, reports that 10 per cent of its engineers were expatriated Indians (Saxenian 2006).

The multinational corporations recruit the young Indian expatriates and send them to establish their operations in India, which is a great source of motivation to have a working holiday (NASSCOM, 2005). What is striking about it is not always the job, but also the sentiments of the returning Indians, the feelings, support of family, and lower cost of living and higher quality work opportunities and more career growth which pulls the Indian back home. Vinod

Gopineth who joined IBM, returned from USA, emphasized that “one’s options are better here; there is more pride and the challenge is greater and you prove not just to yourself but also to your country and to the rest of the world (Saxenian

2006). 224

Recently, on the celebration of Bhartiya Pravasi Divas (Non-Resident

Indian Day) on 7th January 2007, in New Delhi, the Prime Minister of India, Dr

Manmohan Singh urged, “I would like you to reach out and invest in a new India.

Invest not just financially, but intellectually, socially, culturally and, above all,

emotionally” (http://www.indianexpress.com).

The city of Bengaluru has undergone many changes and has impacted

the socio-cultural make up of the city. It can be concluded that high-tech firms are

creating different socio-economic spaces and rise of a socio-cultural revolution in

the city of Bengaluru. The most dominant wards with the largest high-tech firms

are Bengaluru’s best residential localities, having the best infrastructure and

educational institutes. The two wards with the world famous Indian Institute of

Science, Institute of Social and Economic Change, and Bangalore University

contain no high-tech firms. This means we cannot accept that high-tech firms are

leading to create more educational facilities or they are there where the high-tech

firms are. Similarly, the co-existence of high-tech firms and presence of high literates, illiterates and cluster of slums all together has also demonstrated the

same.

Thus, there is a clear issue that the high-tech firms are, no doubt,

transforming the landscape but believing they are completely responsible for

creating intra-urban disparities is wrong. They lead to create new and transform

the old commercial and retail landscapes. The visible disparities in the wards of

Bengaluru are there because of the historic factors and lack of required 225

government initiatives and planning. Even more pervasive has been the fact that the city is undergoing a beautiful change, and high-tech firms are opening up its citizens to the globalized world and widening their horizons and making them part of an integrated world, and, above all, are leading to a brain gain by pulling back the expatriates.

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CHAPTER 6

CONCLUSION

The integration of the Indian with the world economy has manifested several spatial changes. One of them has been the agglomerated locations of multinational corporations in and around large metropolises of India. The main purpose of such locations has been to exploit the availability of cheap and high skilled labor with knowledge of the English language to promote efficiency and productivity in these global enterprises. In this process of development, metropolitan cities interact and transmit productivity, via, inter-urban and intra- urban interdependencies. Such processes have produced changes and many empirical studies at inter-urban level have documented them. But the understanding of the role of high-technology activities in creating socio-economic transformation within a city has been unaddressed by a geographers in spite of being a demanding research. This study has filled the void in the research on high-technology and attempted to understand the intra-urban transformation in the case of Bengaluru, India. High-technology has been defined as the application of intensive research and development in the creation and manufacture of products of an advanced scientific and engineering in nature and process, but still, there is a debate about what is high-technology?

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This researcher has defined high-technology as software and hardware firms, information technology enabled services and fiber optics.

India is a land of inter-urban disparities due to various historic, geographic, economic and political factors. Disparities are defined as the inequality or difference in some respect or the condition of being unequal. India can be divided into various regions on the basis of economic development. India, the world’s largest democracy made two major decisions: first, after independence in the

1950s to have growth with social justice and, secondly, in 1991 when there was a major crisis of balance of payments, it opted for the liberalization policy often called the LPG, i.e. liberalization, privatization and globalization which opened the gates for multinational corporations (Kishore, 2002). The process of globalization has been there for centuries, the question is can India take advantage of this process economically and socially. The new success and flag of growth of Indian economy has been the high-tech firms, and Bengaluru is the largest exporter of software firms amongst all the Indian cities. The argument is: are the high-tech firms the only source of creating intra-urban transformations in the city of Bengaluru?

In the process of globalization, the international spatial division of labor has reached beyond national boundaries to exploit the availability of low wages, skilled labor force, English speaking population, cheap land prices, infrastructure facilities, and attractive climate. Bengaluru is an excellent example of the location of high technology where the multinationals have reached to take advantage of 228

the benefits of such economic opportunities by setting up joint ventures and branch plants in the areas of high-technology. Thus, a question arises regarding why the multinational corporations have chosen to select Bengaluru apart from other metropolitan cites? This study has attempted to understand the impact of high-tech forces in the city of Bengaluru and sought to uncover the extent of high-tech firms in creating a new socio-economic landscape. It has explored and analyzed the presence and absence of high-tech firms in creation of socio- economic inequities. The basic premise has been that high-technology reconstructs urban and economic development at the macro level but creates urban disparities at the micro level. This research has revealed that high- technology in Bengaluru has definitely changed India’s position in the world and made Bengaluru the 4th largest tech city of the world. But how it has impacted

within the city, what has it changed, and whom has it benefited and who or what is lost is an attempt made by the researcher?

Research Objectives

There are three objectives of this research: (1) analyze the location of high-tech industries and its spatial association with infrastructural expenditure and revenue, (2) unravel the socio-cultural transformation and rising transformations in the pattern of expenditure, lifestyle, income, recreation and level of well being, and (3) highlight the impact of high-tech industry on real 229

estate development and new urban land use including architectural transformation.

The city of Bengaluru, with a population of above 5 million located in the center of South India, was selected as the study area. It had been an advantaged and attractive location for the establishment of high-tech firms, for the past fifteen years. It possesses an extraordinary site and situation, salubrious climatic conditions, pool of skilled and semi-skilled labor, large number of science and engineering colleges, high linguistic and religious diversity, a cosmopolitan city, low real estate prices and the role of state and local government which has been beneficial in attracting high-tech firms and the multinational corporations to the city. This study has considered all the 100 wards of Bangalore City Corporation

(Bruhat Bengaluru Mahanagar Palike), including the two information technology parks, i.e. Electronics City and ITPL, Whitefield.

This study has used both secondary as well as primary data. Secondary data were collected from various government departments including the

Department of Information Technology and Biotechnology, Karnataka Udyog

Mitra, Bangalore Mahanagar Palike((Bruhat Bengaluru Mahanagar Palike),

Software Technology Parks of India, Census of India, Karnataka and NASSCOM, and many non-governmental organizations like Janagraha and Public Affairs

Center. Primary data was collected from interviewing people of diverse occupations from software workers, teachers, students, working professionals and businessmen. Digital camera and casual observation were also helpful in 230

detecting major changes which are taking place and not captured through secondary data. It is hoped that secondary data which is collected mostly from the government sources is reliable and valid and is considered to be an authentic source. However, there were some limitations of the data, as time series data ward wise were not available and data on many socio-economic variables were also not available ward wise for previous years. Some data were available at a very high cost, which the researcher in the present study could not afford.

A few comments regarding the use of spatial statistics are imperative here so that future researchers can benefit. Statistical methods like spatial autocorrelation and centrographic methods and cartograms were used to analyze and represent data. GEODA, ARC-GIS 9.1 and SPSS software were used to derive the geo-spatial results. Also, the centrographic methods like standard distance ellipse, mean center and even the Moran’s I were not able to capture the local indicators which the local indicators of spatial association captured. The local indicators of spatial association was used by using Rooks and Queen’

Contiguity, but the results varied while using different weight matrices. Thus, there was limitation of spatial autocorrelation as dissimilar results and clusters of highs and lows emerged from different weight matrices. However, spatial autocorrelation has measured the strength and tested the assumption of independence. But, positive spatial autocorrelation can violate the assumption that the values of observations in each sample are independent of one another.

Alternative methods like geographically weighted regression and other suitable 231

geo-statistical techniques could have been used but due to time limitations the researcher was not able to use.

Summary

The rise of high-tech firms has been an important factor in increase of population as it led to urban-urban migration in the city of Bengaluru. Apart from the domestic migration, the MNCs have also led to enriched diversity and has impacted the cultural landscape of Bengaluru. It has also increased linguistic and religious diversity apart from diverse cuisines. This has impacted especially the high-tech zone and the central business district, but the Pete(old palace/old city) area and the non-high-tech wards are completely left out with respect to cultural and urban landscape transformation. The Pete, important foci of the city, is still traditional and untouched by the high-tech influence. It leads to the conclusion that the gap between high-tech and non- high-tech wards has increased. It is important to mention that it is not just because of high-tech firms that Bengaluru is called the Silicon Valley; it is a combination of historic, social, economic, geographic and educational factors which have made the platform for the multinational corporations and the high-tech firms. It is also observed that high- tech firms do not just agglomerate or cluster only where there are educational institutions within the ward level. As in Bengaluru the high-tech firms coexists with high literacy, illiteracy, and slums. And, still, high-rise luxurious apartments, shopping malls, poverty and homelessness all have been found at one place.

Koramangala is an excellent example having the best residential locality with 232

highest number of high-tech firms, excellent educational institutes and cluster of slums. An analysis of the expenditure pattern on infrastructure has reflected that more endowed and attractive wards, such as the Airport and information technology corridors, have used a major share of the resources for investment.

Surprisingly, investment and revenue generation has been more from the central business district and the peripheries of the city and not necessarily from the information technology corridor.

An objective of this research has been to analyze the impact of high- technology cluster on the local social structure at the intra-urban scale. The rise of the middle class millionaires and the returning Indian Diaspora from the

Western nations have created a widening disparity within the social groups by their demand for Western styled malls, shopping outlets, luxurious houses, entertainment facilities, tastes, preferences and consumption patterns. This has further increased many new opportunities and businesses. Bengaluru has shined as a hub of talent and creative people and can be termed as a creative city, though no empirical study has been done on it. High-tech has brought gender equality, traditional roles have been challenged, and more women have entered in late night shifts in BPO’s. There is a rise of computer education institutes and internet cafes in almost all the neighborhoods. It has led to computer literacy in the city and the traditional role of women is being transformed. Concurrently, there has been a rise of tech-couples, and marriage no longer requires age, class and caste and horoscopes. High-tech has transformed the society and 233

impacted the residents’ mentality and stirred the city. It has also made the old generation rethink its values and accept the new reality. It has transformed the socio-cultural makeup of the city and brought a new direction and thinking renaissance in the society. Therefore, the findings reflect that high-tech has brought some cultural changes and some are really dynamic in nature which is nevertheless threatening its age old traditions.

But, this disparity between high-tech and non-high-tech wards has created a ‘demonstration effect’ leading the local government to address the issues of social equity at the intra-urban scale. The BBMP (Bruhat Bengaluru Mahanagar

Palike) budget for 2007-2008 presented by Sri Gaurav Gupta(Special

Commissioner) on 30th March 2007 has also included ways to increase the

revenues and more money is being allotted on developing infrastructural

facilities. The change in name from Bangalore to Bengaluru and increase in

jurisdictional boundary of Bengaluru is a welcome administrative change by the

people of Bengaluru as they feel more culturally and locally tied and Bengaluru

is Kannada version of Bangalore. The high-tech firms in all has pulled

expatriates back home and around more than 40,000 US-based Indians have

moved back to India and around ten per cent of the software workers in

multinational corporations are expatriated Indians working in Bengaluru.

The analysis has further reflected that there have been major land use

changes in the city structure. High-tech firms have created the new urban

landscapes, changed the urban forms, land use, and brought new sectors like 234

retail and new architecture. They have impacted real estate land prices in the information technology corridor and the central business district. Consequently, high-tech firms are moving out from the central business district and reestablishing to the periphery due to cheap land values and adequate space.

New residential and luxurious complexes are being built in the suburbs of the city. There is a real estate boom leading to rise in new retail sectors and construction industry. High-tech has also led to the shortage of housing and hotels, making them the flourishing business of today. The rise in land values in the central business district and information technology corridor have compelled the multinational corporations and domestic information technology firms to move to Tier II cities to get cheap land. There is not just a change of land use from agricultural to commercial but there is a rise in the state of art technology. World class builders are making quality living a top priority, and today people are investing in real estate. As a result, the land prices in and around the information technology corridor have shown an increase not yet captured in the government documents.

Contributions of the Study

This study has attempted to analyze and illustrate the visible changes in the urban landscape with the rise of high-tech firms. It contributes significantly to the field of urban geography focusing on intra-urban transformations. To the best of the knowledge of this researcher, there have been many studies on high- technology and its impact on Bengaluru but no attempts were made in 235

understanding the impact of high-technology in creating intra-urban transformations. This study contributes both conceptually and empirically to the body of our scientific knowledge. Firstly, the study documents an intra-city social change which is taking place. Though there can be many causes of social transformation, but high-technology has been a major one in shaping the new social make-over. This has been established cartographically, graphically and statistically. Secondly, it has identified three foci’s or nucleus of the city. One is the Pete area or the traditional core, the second is the central business district or the Cantonment area, i.e. the colonial core and the third which is the emerging nucleus is the high-tech zone (IT corridor and IT parks). It is anticipated that a new spatial organization of land use is going to emerge in this high-tech zone consisting of recreational sites, shopping malls, tech culture, state-of -art architecture, quality buildings and luxurious residential theme based apartments by world class builders. Thirdly, according to the best knowledge of the researcher, this is the single most research done on ward wise transformation and high-technology. Fourthly, this study identifies major transformations brought by real estate, such as the construction boom, rise of retails and world class residential apartments. Fifthly, the study also contributes towards the theory formulation based on the high-tech model. The model of India’s city structure based on the concept of Bazaar and Colonial based model is challenged. Finally, this study would inspire other Tier II and Tier III Indian cities to follow the

Bengaluru model of success and many multinational corporations and domestic 236

information technology firms are now being attracted to cities like Chandigarh,

Mohali, Pune and Surat for cheap land values.

Future Directions

There are several directions in which future work can be conducted on the study of high-technology and its impact on Indian cities and in developing countries. A first direction lies in doing more such studies in different metro cities of India then the collective wisdom of all these studies may contribute to model building or theory formulation of a high-tech based model of an Indian city. As the

Indian metropolises like Delhi, Mumbai, Chennai and Kolkata are presently undergoing a drastic change with the rise of high-tech firms and moving towards the periphery and formulating new foci apart from the traditional and colonial.

A second direction of this research may be to study the impact of high- tech on real estate and land use. As not much work is done by geographers, an interesting dimension would be to identify the impact of high-technology on real estate focusing on retail, entertainment and capturing the dynamics of urban land use.

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APPENDIX

Questionnaire I Basic Information 1) Code______

2) Sex : M______; F______

3) Marital Status:

ƒ Married______

ƒ Unmarried______

ƒ Others______

4) Do you have children(How many) B _____; G_____

5) Do you live in Joint family______; Nuclear family______

6) Education(self)

a. Primary School______

b. High School______

c. Secondary School______

d. Graduate______

e. Other______

7) Education

a. Spouse______

b. Children______

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II Socio-Cultural

1) Languages Known:______; Mother Tongue______

2) What language do you use at work______

3) Are you computer literate______

4) Do you think knowing computer is necessary for competing in the job

market?

5) How do you travel to work: Bus______; Car______;

Other______

6) Are you a resident of Bangalore Yes______; No______

7) Did you migrate to Bangalore Yes ____ ; No ______(from where)

8) If migrated why______

a. Education______

b. Marriage______

c. Job______

d. Any other______

9) Religion______

10) House:

a. Owned______

b. Rented______

11) How long have you been staying in Bangalore

ƒ Less than 1 year______

ƒ More than 1 year______

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ƒ More than 10 years______

III. Work and Work Culture

12) Occupation

a. Government______

b. Private______

c. Multinational______

d. Self employed______

e. Unemployed______

13) Do you work in

ƒ Private Sector______

ƒ Public(Government)______

14) Details/Specifications about Occupation______

ƒ Multinational

ƒ Indian Firm

15) If you are working in a MNC/Computer firm how is the work environment

a. Formal______

b. Informal______

c. Other______

IV. Change in Lifestyle/Standard of Living

16) Where do you go for shopping

a) Malls______(which and why)

b) Local Bazaar______

257

c) MG Road/ any other ______

17) Do you go to eat in

a. Pizza Hut______

b. Subway______

c. McDonald’s etc______

d. Any other global chain______

e. None______

18) Do you buy Branded names (why) Yes_____; No______

19) Do you like the idea of global chains coming to Bangalore Yes_____;

No_____(Why)

20) Standard of Living: High ______; Medium______; Low______

21) Do you think that the MNC’s (Multinational corporations) in Bangalore have

changed Bangalore(If yes or No why and How?)

22) Do you think the job opportunities /employment has increased since

1991/Rise in MNC’s

23) Do you watch more of Bollywood/Hollywood movies and if yes since when?

24) Do you have cable at home?

25) What channels do you watch?

26) Do you watch any English channels?

27) What do you do for Recreation(Where do u go)

258

28) Do you think your life style has changed in last few years and if yes how

and why describe:

a. Shopping pattern

b. Food habits

c. Recreational behavior

d. Change in Transportation mode

e. Relations and Relationships etc

V. Real Estate and Changes

29) Has there has been a change in the real estate price since 1991 or when

you came in Bangalore

30) What is the rent(approximate) of

a. 1 bed room

b. 2 bed room

c. House

d. Paying Guest

e. Any other

31) Which in your view is the best locality/area in Bangalore to live and why?

32) Has there been any change in the architecture nearby(Locality, City) in last

few years

a. Single storey

259

b. Working women hostels

c. Paying guest

d. Multi storied

33) Is the concept of paying guest old or has recently emerged in the city? Why

34) What and Why according to you has been a change in the real estate?

35) Have you observed any change in the number of hotels, motels in last few

years? Why and How?

VI. Transforming Image of Bangalore

36) Do you think Bangalore has changed (After 1991) in terms of the following

and if yes why and how?

a. Infrastructure

b. Traffic

c. Shopping malls

d. Expensive

e. Poverty

f. Buildings

g. Pollution

h. Crime

i. Security etc

j. Entertainment

k. Educational Institutes

l. Rise in Slums

260

m. Restaurants/Types of Cuisines

n. Any other

37) Do you want to spend the rest of your life in Bangalore? Explain Why

38) Do you want more recreational/entertainment facilities in your city? Or is it

enough? Why or Why not?

39) How according to you Bangalore has changed culturally? Describe.

40) Do you go to Bar/clubs

a. Regularly

b. Rarely

c. Never

41) Do you observe any change in the family system (Joint, Nuclear) (Why?)

42) Has it opened doors to Inter-caste, Inter-cultural, Inter-religious marriages?

43) What kind of recreational/Social activities has recently started in Bangalore

which was not there few years back and why?

44) Has there been any emotional/other issues which arose in recent years and

how and why according to you they are prevailing?

45) Any other final observations/comments …