Bangalore to topple Silicon Valley from top tech spot

Bangalore is on the verge of overtaking Silicon Valley as the biggest IT employment region in the world on the back of the rise in offshore outsourcing.

The high-tech Indian city, which is home to major Indian IT outsourcers including Infosys, TCS and Wipro as well as many Western IT companies, now employs 160,000 people in the technology sector. IT accounts for 100,000 of these jobs with the rest in BPO and call centres.

MS Shankaralinge Gowda, secretary of IT and BT for the state government of Karnataka, said that number will pass 200,000 in 2004 to 2005 as the IT and BPO companies continue to rapidly grow their workforces.

Gowda had claimed that Bangalore has already overtaken Silicon Valley but the latest figures from California's state government Employment Development Department (EDD) estimate the number of technology workers in Silicon Valley – Santa Clara county – at 175,100 as of July 2004.

The figures, based on US Department of Labor state and area estimates puts the total number of people in employment in Santa Clara at 874,400. The 175,100 tech workers are employed in computer design and related services, telecoms, ISPs, data processing and hosting and computer and electronic production.

Ruth Kavanagh, peninsular labour market analyst for Santa Clara County at the EDD, told silicon.com that despite the Bangalore claim, Silicon Valley is actually experiencing employment growth levels similar to the boom years.

"In recent months we have seen significant improvement in the jobs situation. Between May and June [including non-tech jobs] we had growth rates very similar to those in 1998 and 1999. The county is gradually gaining back some of the thousands of jobs lost in the last couple of years," she said.

Kavanagh suggested the impact of offshoring may be overstated, referring to a separate report by the non-profit Joint Venture: Silicon Valley Network earlier this month.

The report into the Bay Area job market found that outsourcing within the US is having a greater impact on IT workers in the region than offshoring.