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Bangalore, India Hi-tech Industry/Tertiary Service
Bangalore is in Southern India, in the state of Karnataka. It is 1000km south of
Delhi and 600km southeast of Mumbai. Several companies have outsourced to
Bangalore and it is now a major centre for new technology industries. An area
4km known as Silicon City is a hi-tech community/science park for hi-tech
industries. Companies that have outsourced here include HP, Sony, Samsung,
Google, EBay and Apple. Operations include manufacturing of secondary hi-tech
goods such as computer chips, research and development of new products,
provision of IT services and call centres.
Why Companies are Attracted Here
i. The region holds 1/10 of India's graduates. The workers are highly qualified and hardworking. Workers are
skilled in outsourced jobs such as sales and marketing, financial services, insurance quotes and services and
handling customer queries and complaints which suit the industries located there. An institute of Information
Technology has been set up near to supply for the demand of workers.
ii. Labour costs are cheaper in Bangalore than other places. Wages in India are
less than 10% of wages in the UK. Also companies do not have to pay for sick pay or
maternity pay etc.
iii. There are fewer governmental regulations so overheads and set up costs
are much cheaper.
iv. There is also a lot of government support. The Indian government has
allowed 100% ownership of the industries by TNCs and there is no duty/tax on
imports. This means the TNC can make a greater profit.
v. Many hi-tech industries locate here to industries can `feed' off each other
and share ideas. There is a high level of technological assistance available to help with computer problems, so
companies can overcome problems quickly to preserve effeciency.
vi. The time difference allows companies to operate a shift work system which operates a globalised 24 hour
system. A company in the UK can send off some work to India over night (during India's day) and it will be
sent back ready for them in the morning.
vii. New office devlopments on business parks are fully modernised with the latest technology needed for
viii. There is excellent infrastructure. It is near an international airport which allows access for executives and staff
from TNCs. There is the potential to transport goods as they are low bulk and high value. Being close to good
transport links means there are lower transport costs.
Impacts of Industrial Growth
i. Bangalore is India's fastest growing city. The population grew from 1.6 million in 1970 to 7.2 million in 2010
due to the influx of highly skilled immigrants looking for work. The city has expanded as more out of town
business and science parks are developed.
ii. `Home grown' Indian companies have now started up as well as TNCs
iii. Over 10,000 direct jobs created by TNCs and many more being
created as new industries move into the area. These are highly qualified
jobs with higher than local average wages which increases GDP and
increases standard of living and quality of life
iv. The positive multiplier effect meant people had higher incomes so
spent more in local economy so businesses in local economy expanded
creating even more employment
v. As businesses expand they pay more tax so local authority has more
money to spend on services like healthcare and education. More people
have access to healthcare so are less likely to die and more people have
access to education which increases job aspects
vi. Six new shopping malls in the city have opened up and thousands of cafes, bars, shops etc. have opened up
due to greater demand for services. Access to services has increased thus increasing the quality of life of the
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Property prices and rental prices have increased as incomes and the demand for housing has increased. Many
people find they are spending more than half their salary on housing and many cannot afford housing. This has
also forced local inhabitants who do not work in the hi-tech industry to move away as they cannot afford the
viii. There are huge gaps between the rich and poor. As people earn higher incomes, prices in the city rise.…read more