The document discusses the IT cluster in Bengaluru, India. It provides background on India's economy and outlines the growth of the IT industry in India since the 1980s. It then focuses on Bengaluru, describing how it became a major IT hub, with over 1 million direct IT jobs. The document analyzes Bengaluru's IT cluster using Porter's Diamond Model, examining factors like skilled labor forces, government support, and related/supporting industries that have contributed to its success. It also notes challenges faced, such as infrastructure issues and competition from other emerging clusters.

1. IT Cluster Bengaluru India
BY
VINEETHA YELLIMELLI
WEN JUAN LI
YU LI
YEKATRINA PANOVA
PHANI KUMAR NELANUTHULA

2. Presentation Contents
1. Introduction – India
2. IT in India - Outlook
3. IT in India – Timeline
4. IT industry Snapshot
5. Bengaluru – IT cluster
6. Diamond model
7. Challenges
8. Suggestions

3. INDIA
 Population – 1,335,280,665
Area – 3.287 Million Sq.Km
Literacy Rate – 72.23
Female Literacy Rate – 62.98
Employment to population – 49.9%
Global Competitiveness Rank - 39
Global innovation Rank – 66
Knowledge & Technology Output – 43
Business Sophistication – 57
1980 2015
GDP Per-capita
ppp
566 USD 6746 USD
GDP Per-capita
Nominal
266 USD 1942 USD
Inflation 11.38% 5.22%
GDP 189.593 Billion USD 2095.4 Billion
IT share of GDP 0 9.3%
http://en.unesco.org/countries/india
http://www.ilo.org

4. IT in India - Outlook
 TCS Being 1st IT company of India
established in Pune
1st International Project achieved in 1971.
 IT era started outside India in 1980.
 Infosys established in Pune 1981 & moves
corporate head Quarter to Bengaluru in
1983
 Employment in IT is nearly 3.5 Million with
34% women employment
 Contribution of Indian IT to the world(
market share) 67% in 2015- update data
 Total 53 Software Technology Parks Centres
are in India of which 46 are tier 2 and tier 3
cities

5. IT in India - Timeline
TCS
1968
Emergency
1975-77
IBM
leaving
India
1978
Infosys
1981
Global
Recession
1980-1984
FDI
1991
Electronic City
in Bengaluru
Industrial
norms
liberalization
Infosys
Model
Hi-tech City
in
Hyderabad
Recession
2008
1st in
Outsourcing
1st in BPM.
2017

6. IT Industry Snapshot
http://www.nasscom.in/it-services

7. Bengaluru IT Hub
 Bengaluru a.k.a Garden city of India, Silicon Valley of India, is the capital of Karnataka State.
 Most Dynamic City by World Economic Forum in 2017
As Per Government Statistics in the year 2014:
 Population – 8,971, 800
 Area – 741 sq.Km
 GDP PPP – USD 45,313 Million
 GDP per-capita PPP – 5051
 Employment – 3,603,500 (Ranks 40th in world)
 Employment in IT – 1 Million Direct Employment
 Number of Domestic IT companies – 3500 (Registered)
 Number of IT MNC’s – 750
 Number of IT R & D centres - 400 approximately

8. Strategy Structure & Rivalry
Rivalry
Other IT Hubs of India
China & Philippines targeting IT
growth & outsourcing
Strategy
Partnership with other Indian IT Hubs
etc
Factor Conditions
Inward Remittances/Indian Diaspora
living Abroad
Cost & Efficiency
Skilled Labour
Quality
etc
Demand Conditions
Exporting of Software Services (to US,
Europe)
Dependency of Fortune 500 companies
Domestic Market Demand
Related and supporting Industries
Education & Training
Banking & Financial Service
Transportation
Real-Estate
etc
Government
Industrial Policies
Trading Policies
Make in India
Digital India
Cashless Economy
etc
Bengaluru
IT-Cluster
Diamond
Model

9. Strategy & Rivalry
Rivalry
 Other IT Hubs of India
 China & Philippines targeting IT growth & outsourcing
Strategy
 Partnership with other Indian IT Hubs
 Acquiring more Qualitative approach
 Improving skills and Technologies
 Developing Hardware with in Bengaluru.
 Establishing more effective and efficient Support Industries
 Acquiring more skilled Labour from States which doesn’t have any
IT industries

10. Factors Conditions
Inward Remittances/Indian Diaspora living Abroad
Cost & Efficiency
Skilled Labour
Quality
Industrial support system
FDI
Finance
Language for ITES
Culture – Colonised – diversity
Infrastructure & Resources/climate
Trading opportunities

11. 1983- 2000
mainly depends on export
 US is the biggest client for IT
outsourcing from India
US absorbs about 2/3 of all of India’s IT and
ITES exports
 Developed countries like Japan
Accounted for three percent
 Most of Fortune 500 companies
outsource software related work from
India
2000 – now
Internal demand is more and more important
 IT industry structure results more
competition
 More user industries embrace IT to enhance
competitiveness
For example: retail, healthcare, government
industry
Reason: due to downturn of US economy
Reason: to reduce cost

12. Related and Supporting Industries
Supporting Industries Related Industries
 Education & Training
 Banking & Financial Service
 Transportation
 Real-Estate
 Hardware
 Tele-communication
 Hospital and Hotel Industry
 Logistics
 Advertisement
 Aerospace & aviation industry
 Military institution
 Manufacturing industry
 Agriculture Industry
 Flora industry

13. Government
 Government proposed projects - Bangalore IT
park and a Hardware Park at Devanahalli, Export
Promotion Industrial Park (EPIP) Park at
Dakshina Kannada District, IT SEZ at Mangalore,
Aryabhatta Park at Hubli.
 Make in India – A project to manufacture goods
and services in India
 Start-up India – New start ups
 Digital India – To digitalize every Industry and
Household needs
 Political system – Diversified (Left, Right and
Liberal).
 Indian government is funding for IT development
in Aeronautics to Elementary school Tablets for
education
 Industrial Policies
 Trading Policies
 Cashless Economy Drive
 More Govt. funded domestic projects
 Government funded training centres like CDAC.
 Establishment of more IT Institutes and education
courses.
 Tax benefit compared to other countries
 Easy Start-up support policies.
 More Involving Students in innovation driven
trainings.

14. Challenges
Faced Anticipated
 Establishment issues
 Connectivity issues, Internet/telecom
 Lack of Internal Projects
 Less Product Based more Service Based
industries
 Service Based projects are all from
Developed Countries. Cost of acquiring
project.(impression cost)
 Competing Hubs – Hyderabad and Pune
 Lack of IT, computers based education
Institutions and Technically skilled labour
 Infrastructure & Real estate
 Resistance to Change
 Government Income through Incoming
Technology/taxes/ opportunities
 Quantity driving out Quality – hardware.
Hard-ware Dependency on China & Taiwan
 Infrastructure
 Local Contingencies/Nationalism issue
 Controlling Change – Government/ Establishment is
unable to strategize the upgrade technology
 Over Control of Change – forcing the technologies
without proper analysis & R&D, whether feasible for
product or not
 Lack of Skilled Labour
 Increase in number of IT hubs in India
Migration of skilled labour to other countries
 Real estate price rise
 Kaveri River/ drinking water/ sewage water issues
Establishment of Other Industries
 Political Influence

15. Suggestions
 With UIDAI, government opened IT in public service, Many Government IT projects are yet to come.
 Leading International players like Google are expanding their Projects, Apple is reaching IT in India.
 Universities like MIT, York, are partnering and establishing their institutes in India,
 Civil Establishments are yet to improve, So projects supporting better lifestyle of people leads to IT
expansion.
 Due to Telangana state Agitations many companies migrated to Bangalore from Hyderabad. They can
expand themselves with branches in the newly constructed capital of Andhra Pradesh - Amaravathi and
Expanding Capital of Telangana Hyderabad.
 With Increasing Imports of Hardware and Technology. India, in particular Bangalore, is in race of
becoming first smart capital of the world.
 Goods & Services Tax, new Tax reform which helps the Manufacturing and Product development
companies in reducing their Taxation expenses. IT companies should gain maximum out of this reform.
 Demonetization lead huge economic loss at the same time has given opportunity to Intellectual IT
companies to persuade many financial Institutions in the digital direction.

16. Thank you

17. References
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 http://www.worldometers.info/world-population/india-
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 http://www.sciencedirect.com/science/article/pii/S097038
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 https://en.wikipedia.org/wiki/IBM_India
 https://www.weforum.org/agenda/2017/01/these-are-the-
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http://www.nasscom.in/it-services
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https://www.brookings.edu/research/global-metro-monitor/
http://www.ilo.org/gateway/faces/home/ctryHome?locale=EN&coun
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http://universityi.com/list-of-indian-universities/851/indian-india/
http://www.livemint.com/Companies/P0h3ATmjjBt2pJayfHIIVJ/Kris-
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