Monday, November 30, 2009

Bangalore and San Francisco now Sister Cities

Bangalore and San Francisco are now sister cities. Bangalore and San Francisco today signed seven Memoranda of Understanding (MoUs) declaring the "sister cities" arrangement. The MoUs were signed in the presence of Chief Minister B S Yedddyurappa and San Francisco Mayor Gavin Newsom.

Considering that Bangalore has long been called the Silicon Valley of India (although it's actually a plateau, geographically speaking) and the San Francisco Bay Area has been a cradle of America's technology start-ups in recent decades, one wonders what took so long for the two cities to partner up.

According to news reports and what seems to be the initiative's official website, the two cities will be partnering in the following areas:
  • Infrastructure and Better Government
  • Education and Healthcare
  • Women's and Children's Issues
  • Arts and Performances
  • Business and Trade Facilitation
  • Leadership 2020

Anybody notice something conspicuously missing in the above list? Where is technology? I would have expected that to be the top item!

Bangalore is touted as the Silicon Valley of India. It has been the birth place of such IT stalwarts as Infosys, the most popular example of India's garage/home start-ups, Wipro Technology, the IT services company that is Wipro Corporation's best known division, and a host of other software services companies. But the city appears nowhere in the map of the world's hotspots for start-up companies. This sister city partnership could be an avenue to encourage the start-up companies in the Bay Area's Silicon Valley to partner with young companies in Bangalore for their technology development needs.

No doubt, start-up companies in the US don't usually have a well-structured process that is so essential for offshore partnerships to work effectively. And the IT companies in India prefer to work with stable, established companies in the US which provide steady and big-dollar contracts. But small IT companies in Bangalore led by the right kind of efficient and ambitious leaders could provide real value to America's start-ups.

Bangalore lacks the venture capital that flows into the American Silicon Valley in abundance. But Bangalore has an abundance of manpower it could provide at much lower costs to the American start-ups. In exchange, Bangalore's small companies could get paid in a combination of hourly dollars and stock options. If a start-up becomes a hit, the rewards could be much higher than the average hourly rate American companies pay to offshore techies from Bangalore. It is a niche-play, but there is potential.

Hopefully someone in one of the sister city sub-committees will see this potential and do something to encourage it.