Information Technology

Overview

India is a global leader with 55% of market share in the IT –BPM sourcing service industry worldwide. Globally the IT- BPM spends accounted for US$ 2.3 Trillion in 2014 growing at 4.6% over 2013. However, Indian IT-BPM industry is estimated to account for revenues of USD 146 billion, growing by 13 per cent over the last year. E-commerce is driving the rapid growth of domestic IT-BPM, attracting unprecedented levels of global interest and funding & Bengaluru ranked second in the Global start-up Ecosystem growth index by ‘Compass’ is in the driving seat of this tremendous growth in the sector.

Karnataka thus is at the helm of affairs as the 4th largest technology cluster in the world progressing towards being World’s No 1 technology cluster well backed by its i4 (IT, ITeS, Innovation & Incentives) Policy 2013 and India’s First Multi-Sector start-up aimed at creating a globally competitive start-up ecosystem.

Key drivers for growth in the segment:

Karnataka’s unique advantages have been a focal point, driving and catalysing growth in the IT, ITeS, BPM service sectors. It offers an ideal ecosystem of Talent, Infrastructure and thriving Innovation Cluster-driven by a pioneering proactive policy environment with consistency in excellence.

Add to this world’s major IT companies attracting the best talent pool, premier R&D institutions catalysing growth in emerging technologies and a flourishing start-up environment driven by the spirit of entrepreneurship. The 360-degree gamut thus comes to a full cycle driving the growth in the sector across segment to stay top notch; even with the latest trending e-commerce.

Karnataka is a global leader in IT-BPM sourcing services sector with the revenue of USD 50 billion in 2015 expected to grow to USD 90 billion by 2020. It has a CAGR of 24% and has been witnessing sustained high growth. Karnataka is expected to be the largest IT cluster globally by 2020, employing 2 million people as against the current 1 million - the highest number of IT professionals in the world.

It is also well placed with 3500 IT/ITeS companies including 750 multinationals companies providing 10,00,000 Direct and another whopping 30,00,000 Indirect employment in the state. The large talent pool coupled with 400+ R&D institutions ensure it to be the ideal destination.

Well-developed infrastructure coupled with new investments of USD 1,271 million, 47 Special Economic Zones (SEZ) are fuelling further growth of IT/ITeS sector First Multi-Sector start-up policy in the country aiming towards a globally competitive start-up ecosystem and Karnataka i4 policy to strengthen leadership position globally and move beyond Bangalore and create Karnataka as a global investment destination for IT –BPM sector

Track Record:

Karnataka’s list of credentials is well embedded in its many titles like Silicon Valley of India, Knowledge Capital, Start-up Hub or The Innovation Cluster. However, the statistic record is impeccable too

Karnataka is the largest software exporter of India contributing 1/3 of total exports. Software Technology Park of India registered units with an export of USD 19 Billion in 2014-15 constitutes 60% of IT-BPM & ESDM exports from the State.

It has 80% of Fortune 500 companies nearly 400 of them have outsourcing operations here and it houses 50% of world’s SEI CMM level 5 certified companies.

With 30% share in the country with over 4000 start-up companies in Bangalore with an average valuation of USD 3.3 Million and 14,000 investors, Karnataka is a Start-Up Hub.

It has 0.1 million skilled engineers and Ph.D.’s graduating annually with a million employed in the sector directly.

It is ranked No 1 by Mercer as the best place to work for expatriates and No2 by Compass in global startup eco-system growth.

It truly is the knowledge hub with 400+ R&D centres, 3rd largest engineering colleges over 200 of them, 20+ Universities, 200+ Polytechnics and 300+ Industrial Training Centres.

It is home to premier research and academic institutes such as NAL, ISRO, IISc, IIM-B, JNCASR, IIIT-B, DRDO, NIT, NLSUI and has ICT Skills Development Society (ICTSDS), dedicated for skill development in partnership with industry stakeholders.

Karnataka is the first State to announce a focused policy on Start-up addressing the need for technology in manufacturing and allied sectors. The policy mandates various initiatives including developing First Startup warehouse in the country under the partnership of GoK/KBITS with NASSCOM with a goal to create 20,000 technology based startups including 6,000 product startups by 2020.

The policy also advocates creating a New Age Incubation Network (NAIN) with Academic institutions, who will be assisted to establish an incubation facility and for funding of entrepreneurship projects in colleges with a focus on the generation of 25 Innovative Technology solutions with social relevance.

It warrants establishing Start-up Cell, facilitating handholding of new ventures started by young people along with an INR 2000 crore (USD 333 mn) Fund of Funds’ initiative to fund early stage start-up ventures.

Karnataka’s i4 (IT, ITeS, Innovation & Incentives) Policy 2014 aims to leverage Karnataka’s leadership position in IT to create many transformational e-governance projects and strengthen Karnataka’s leadership position as the global IT capital.

It offers a Single Window Clearance Agency from Handshake to Inauguration with Concessional power tariff and exemption from stamp duty and many more value additions to make it a lucrative venture.

The policy looks to move beyond Bangalore as Incentives are being offered to facilitate investments in Tier 2/3 cities across Karnataka. It offers Employment Linked Incentivization of Land Allotment (E-LILA) outside Bangalore Urban and Rural Districts' limits to ensure a wide geographic coverage.

The policy extends exemption of IT/ITeS/Knowledge/Start-up companies from the applicability of Karnataka Industrial Employment (Standing Orders) Rules, 1946 with Essential Services & Re-imbursement of PF/ESI and added benefits of Skill Development Policy & Corpus and Default Loan Guarantee Scheme.

All this, in an effort to create Brand Bangalore 3.0 and Bangalore First Fund for creating the highest quality entrepreneurial ecosystem in the world: Thus the vision is well set towards creating a world-class start-up ecosystem through strategic investment and policy interventions leveraging the robust innovation climate in the state.

• IT Investment Region (ITIR) in an area of 10,500 acres of land near International Airport is expected to bring in $20 billion, create 1.2 million direct jobs and 2.8 million indirect jobs (update)
• Government to invest on Start-up incubators on PPP mode
• Common Infrastructure facilities on PPP mode in emerging technologies such as cloud computing, IoT, Big data analytics, etc
• Vasanthnarsapura-200 acres land in Phase III and 500 acres land in Phase IV on NH 4 (100 Km from Bengaluru Airport)
• 200 acres land available at Sira near Tumkuru NIMZ on NH 4(120 Km from Bengaluru Airport)
• A total of 921 acres of land is available in the newly developed clusters across the state including Dakshina Kannada, Mangalore and Hubbali amongst others

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