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Indian City Rides Tech Euphoria

An outsourcing boom is altering lifestyles and landscapes in Bangalore. The explosion of wealth may not last, but no one seems too worried.

June 30, 2004|David Streitfeld | Times Staff Writer

BANGALORE, India — High tech is king. Traffic is impossible. Real estate is soaring. The future seems a little closer than it does anywhere else.

If you ignore the occasional wandering cow, this low-slung city feels a lot like Silicon Valley in the late 1990s, when everyone was getting rich by inventing dot-coms and no one saw any reason they wouldn't be able to do so forever.

Bangalore's ascent is fueled by outsourcing. When a software programmer in San Jose or Seattle loses his job, this is often where it ends up. If you've gotten a call about switching your long-distance plan or a query about why you haven't paid your credit card bill, there's a good chance that call came from Bangalore.

Like all booms, this one feels frantic and oddly fragile. The outsourcing industry is growing 30% a year, but a U.S. backlash could put on the brakes. In mid-May, Indian voters rose up in revolt against politicians who favored high tech, throwing almost all of them out in favor of pro- rural legislators. The stock market tumbled 16% in two days.

But no one appears very worried that Bangalore will replay Silicon Valley's crash as well as its ascent. American corporations will always want to cut costs, the thinking goes, which means they'll send increasing amounts of business here.

Anyway, the Indians have their minds on other things, like the size of their paychecks.

"I'd be willing to work for half this rate in Bhopal, where my family is, but there aren't any jobs there," says software engineer Rohit Johri. "This place is a gold mine. It's good for India too. Unemployed people get into trouble. They go into politics or crime."

Employed people, meanwhile, go into stores with fistfuls of rupees.

"Shopping in India used to be an ordeal," says the 28-year-old Johri. "Something as simple as a wristwatch would take three months. A scooter would take a year, a telephone two years. Those were luxuries."

Scooters, including Johri's Kinetic Honda, now clog the streets. There's a mobile phone shop on every block, often next to swank stores devoted to upscale lifestyles. One big emporium is called simply that, Lifestyle.

The boom in Bangalore is influencing more than fashions; it's reshaping India's political geography. The message of the May elections was that the hundreds of millions of Indians who were not involved in the outsourcing industry felt they were being neglected. They didn't want to end the party, they wanted to join it.

Bangalore displays little of the overt poverty of New Delhi or Bombay, but it's full of clashes between the old India and the new. Tommy Hilfiger shirts in the new Forum mall sell for $50. That's more than a month's income for many rural Indians but affordable to a programmer making $11,000 a year or even a call center employee who makes $4,000 but can spend freely because he lives with his parents.

A billboard touting Sun Microsystems Inc.'s ability to "take you places you've never been before" looms over peasants who, until recently, didn't appear to be going anywhere. Now, thanks to the needs of Sun and hundreds of other technology companies, their lives are getting a bit better too.

All these growing tech companies need new office space, much of which is still built by laborers in the traditional labor-intensive manner. The employees need places to live -- every second billboard is for a new apartment complex. ("Go on," one ad urges. "Choose your dream home.") There's a big demand for security guards to patrol these properties, and for drivers to transport people between them.

One of the most basic jobs here is driving a three-wheeled minicab. A driver named Srinivasan says he rents his vehicle for 150 rupees a day, about $3. With fares of 10 or 20 rupees, he makes $100 a month.

"Everyone's earning so much money here, except me," Srinivasan says. "But even I'm earning a little."

S. Gopalakrishnan, chief operating officer of the second-largest Indian tech firm, Infosys Technologies, says there is a "trickle-down effect. It's pulling people up."

A decade ago, there were an estimated 100 million members of the Indian middle class. "Now there are 300 million, and they're buying things like crazy," Gopalakrishnan says.

National figures bear him out. New-car registrations rose 75% in 2003. Cellphone sales jumped to 25 million last year from 2 million in 2001. Sales of TV sets have quadrupled since 1996.

But like many boom towns, Bangalore's very success is choking it. The city is growing faster than the government can improve the infrastructure. The population is up 40% over the last decade to 6.5 million. It's now the fifth-biggest city in India.

Gridlock is perpetual. About 1.5 million vehicles are on streets designed to handle a tenth that number. Sidewalks are in poor repair, with regular gaps that cause the unwary to stumble or plunge. Power outages are so frequent that the local paper publishes a daily list of which neighborhoods are due to be hit.

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