Gloom Valley, boom town

SMS FROM SILICON VALLEY

On a recent visit to Bangalore from Silicon Valley, I was struck by the stark contrast between the two places: one is struggling to come out of a recession, while on the other is on the cusp of a boom.

Silicon Valley is still in the process of recovering from the ugly bloodbath that followed the hi-tech bubble of the late 1990s going bust.

This was marked by bankruptcies, lost jobs and a general decline in the local economy. Many people moved away from the once thriving Valley to other neighbouring states or to their home towns. A good number of Indian IT workers also packed their bags and went home to a better life.

The signs of a jobless recovery are flying all over the place in Silicon Valley. "There is a dichotomy in the economic picture here-on the one hand, companies are reporting good earnings, but on the other hand, not much hiring is taking place. There are no jobs being created in the valley," says Vijay Raghavan (name changed to protect his identity), who moved back to Bangalore after a 14-year stint in the US.

Raghavan works as a director of an engineering company that has offices in Silicon Valley and Bangalore. His observation is supported by a recent survey that underscores the fact that it may be difficult to create new jobs.

The survey of 540 Silicon Valley executives by the Bay Area Council reveals that about 55 per cent of the executives expect their work force size to remain unchanged.

Bangalore, on the other hand, is buzzing with activity. There is a sense of excitement and it is evident wherever you go. The job market is booming, the housing market is booming, and there appears to be a never ending demand for consumer goods and services.

If Silicon Valley's unscientific rule of the thumb "� traffic jams "� are an indication of a vibrant economy, India's Silicon Valley is clearly in a boom.

A visit to the International Technology Part (ITPL) complex at Whitefield on the outskirts of the south Indian city unveils the new, emerging India "� the one filled with promise, excitement and energy. It somehow seems fitting that the gleaming towers at ITPL are named: Discoverer, Innovator, Creator and Explorer.

Walk into one of the offices any time of the day and you'll find that it is humming with activity, with an edge of urgency. The office reminds me of the last boom in Silicon Valley. There is that same sense of charged excitement in the air, with fresh young graduates earning salaries that were unheard of five years ago.

"You are leading a totally different kind of lifestyle and money is the biggest driver. If you have money, you don't have to compromise," says Mary Mathews, 26, who works as a manager at an IT company.

Mathews shrugs off the fact that she works at night, and leads a restricted social life, and instead points out that she is busy creating a nest egg for her future.

"What we are doing is trend setting. A lot of the time we feel like we are in boom times, and we are betting on the future," says Ravi Venkatesan at 24/7 Customer, the business process outsourcing (BPO) company.

Venketesan, who was at Silicon Valley during the last boom, ticks off the plus points of his current job: "I work with a great set of people, have good stock options and it's trend-setting. That is, everything I do here is going to set a trend in the call centre area in the next five years." Venkatesan adds that the quality of his family life has improved since he moved to Bangalore.

It is the same quality of life issue that brought Raghavan back from Silicon Valley to Bangalore. "It used to be that if you came to the US before the 1990s, it was pretty much a one-way ticket, with options of returning to India close to zero." But, with the boom in the IT sector, many US-based workers find India an attractive and viable option.

While many Indian high-tech workers may view the world through rose-tinted glasses with a sense of entitlement, some factors have to be kept in mind "� the growing competition from China, the Philippines and Vietnam; bottlenecks and glitches in the infrastructure; the attrition of workers; geopolitical risks and, of course, the backlash in the US against the growing outsourcing of work.

A Silicon Valley venture capitalist recently mentioned that his company got its software developed in Vietnam at a fraction of what it would have cost had the job been done in India.

The economy's growth might seem to be fuelled by the IT industry, but the fast moving consumer goods and retail industries offer huge opportunities too. The demand from the local Indian market could be much bigger than the demand for BPO and IT services. The unfolding of the Indian retail drama just might prod the Indian elephant to stand up.

Meanwhile, Silicon Valley will come out of the current recession in the next few quarters and once again become the engine that pulls the US economy forward.

Silicon Valley and California have everything going in their favor and the high-tech (read: networking and security) and biotechnology industries will spearhead the way out of this jobless recovery.

Kamla Bhatt is a freelance writer who lives in the San Francisco Bay area. You can email her at kamlabhatt@yahoo.com