Bangalore dreams of a second Silicon Valley

For Georg Kniese, managing director of SAP Labs India, Bangalore is the best place to find talent.

"It's just the largest IT talent pool - 40 per cent of the relevant IT talent is here in Bangalore. For us it is very easy to hire - Bangalore is very attractive to employees and it's very attractive for employers," he said.

By the end of this year SAP plans to have 4,000 staff working at its Bangalore site - the company's fastest growing lab, home to 20 per cent of its developers, and one of four global hubs with responsibility for products.

Kniese explained: "Today what we do like about India is the scalability and the possibility for us to ramp up 200 people in an area in half a year because of the vastness of the talent pool."

And its not just the multinationals that are getting their R&D out of India. Indian companies such as TCS are also advertising their research capabilities. TCS has a lab in Pune (click here for pictures) which works on process engineering and software engineering research.

Professor Mathai Joseph, who runs the centre, explained: "One bit of magic pays for two or three years' investment. It's hard to think of an IT company that has not set up a research centre in India. It forms an important part of the business for TCS."

For example, the labs develop tools to pick business rules out of legacy code, to help companies moving away from legacy systems to reproduce the same business processes on a new infrastructure.

The lab builds the analysis tools that help the re-engineering analyst to spot the business rules - and thus save 10 to 15 per cent of the effort at an early, critical stages of a project.

The lab is also looking at privacy technologies and how to make data anonymous so that new applications can be tested using live data without breaching customer privacy.

And perhaps most importantly for the future of Indian R&D, it seems that the many researchers are seeing the value of staying in India, rather than heading abroad to further their careers.

Joseph explained: "People are coming back to India to work and they no longer feel they are giving up much to come back here."

So while it may be the mega-campuses that grab the eye, it may be the smaller operations that really make the big difference.

Have you visited India to check out the outsourcing options? Or have you been affected by offshoring here in the UK? We want to hear your stories and comments. Leave your comments below or email editorial@silicon.com.