5 Initiatives That Transformed Bangalore's IT Ecosystem

by The Scalers Offshore Development Teams In India

Over the last few decades, India has emerged as the perfect ecosystem for technology entrepreneurship, attracting the attention of businesses across the globe. Bangalore, the IT hub of India has a significant role to play in this transformation.

Located in the heart of South India and nicknamed “The Silicon Valley Of Asia”, Bangalore is home to over 12.5 million people. With an average economic growth rate of 6.5%, Bangalore is evolving at an astonishingly fast pace. This rapid economic growth can be primarily attributed to one factor — the IT Industry.

Bangalore houses the R&D centers of some of the most famous multinational corporations. These companies are, in turn, creating millions of jobs for engineers all across India. So what’s the secret? What transformed Bangalore’s IT ecosystem? How did Bangalore become the IT hub of the nation?

Let’s find out.

1. Access To Top-Tier Educational Institutions

It all started way before IT technology as we know it was born. Swami Vivekananda (an Indian Hindu monk and a key figure in the introduction of Indian philosophies) and Jamsedji N. Tata (an Indian pioneer industrialist, who founded the Tata Group) were committed to advancing scientific capabilities in India. This commitment was cemented in the erection of the Indian Institute of Science in 1909, which set the tone for engineering in the city for decades to follow.

The institution contributed to significant progress within the spheres of advanced computing, space, and nuclear technologies — and became the first to introduce a master’s degree in engineering. Alongside its 40 Ph.D. programs, the institute’s education centers for climate change, neuroscience, and engineering provide budding IT professionals a chance at interdisciplinary research. Bangalore also has the highest number of engineering colleges in the world, which stands as a testimony to Bangalore’s technical prosperity.

Allocating the source of unicorns in educational contexts introduced the world to India’s Institutes of Technology featuring alongside Stanford, Harvard, and the University of California. Among its alumni, the IITs — a cluster of 23 universities — managed to produce 12 unicorns, a fact that has put India in the driver’s seat of digital endeavors and aided the country’s rise to entrepreneurial stardom.

And that’s not all! Bangalore was even recognized among the top 14 leading global advanced manufacturing and robotics ecosystems, according to Startup Genome’s 2018 ranking, overtaking other metropolitan cities like Mumbai and New Delhi.

2. Government Policies

To escalate the number of IT organizations in the country and foster a sense of entrepreneurship, the Indian government launched Startup India in 2016. This program was established as a monetary aid for startups to secure their branding, IP protection, and attract the right talent. Though this was a nation-wide initiative, the Karnataka government also launched the Karnataka Startup Policy to stimulate the growth of 20,000 tech startups by 2020.

Additionally, the prime minister of India, Narendra Modi, launched the “Make in India” movement in 2014 to encourage businesses to be self-sufficient and boost manufacturing capacity in the country. And it didn’t stop there.

The Government quickly realized the importance of eliminating illegal practices in businesses. And so, in 2016, it introduced the concept of demonetization, where all ₹500 and ₹1,000 banknotes were made redundant, and new ₹500 and ₹2,000 notes were issued. This was done to curtail the shadow economy and reduce the use of counterfeit cash.

Unsurprisingly, this action led to a sudden surge in the number of online payment portals and fintech companies, especially in Bangalore. The city saw different kinds of fintech startups trying to capitalize on the online payment industry in different ways. Companies like Paytm, MobiKwik, Lendingkart Technologies, and Policybazaar took advantage of Bangalore’s IT ecosystem and quickly scaled their business to new heights.

3. Economic Liberalisation

Economic liberalization has no doubt been the single most crucial factor in Bangalore’s explosive growth rates and innovative dynamism.

Being a former British colony, India was mainly an agricultural and manufacturing hub due to its cheap labor and low-cost land. Only after the country attained independence in 1947, did Bangalore’s IT ecosystem begin to take shape. Aerospace, telecommunications, space, defense — they all saw significant investments from the government.

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