Silicon Valley? More like racers' alley, with college students and office-goers revving it up

MONDAY, SEPTEMBER 12, 2005
En route from Pune to Mumbai, 5.30 p.m.

The epiphany doesn't come till our ride out of Pune, but when it does, it arrives suddenly. It's raining and both driver and car are focussed on getting out of Pune city and on to the Mumbai-Pune expressway and its promise of a two-hour ride home. Then, I am in Kothrud. To the right is the suburb itself, all glass and chrome, screaming affluence from every window of every high rise (there are lots of both, windows and high rises). To the left is a sprawling shanty town that progressively climbs the hill against which it is set. That's a scene worthy of Big Brother Mumbai. Then, it isn't just about contrasts; it is about everything that makes every large Indian city hell to live and work in, illegal tenements, unplanned growth and the inability to cope with migrants.

Pune is that strange thing as far as Indian cities go, a unique combination of student-town, retirees-paradise, manufacturing-hub and it-hotspot rolled into one compelling package. And, circa 2005, in one of those developments that no one can quite predict, the city is emerging a preferred destination for it and IT-enabled services firms seeking an alternative to grid-locked Bangalore. Yes, Pune has always been a favourite with companies operating in the two areas, but there has always been a clutch of other cities that compares favourably with it. Now, goes the refrain, Pune is it. Actually, not quite; Chennai and its suburb Siruseri are it, but Pune has something going for it that the other city does not. This isn't the weather although that can be considered a factor (Pune's is balmy and salubrious; Chennai's is hot and muggy). "Pune tops the list with the highest ratings in skills, (in terms of both) availability and retention, and will be a close contender for a Tier I slot for it outsourcing by 2010," says New Vernon Partners' Promod Haque, one of the world's best known venture capitalists, referring to a recent report put out by Gartner, an it research and consulting firm. The way he sees it, the manufacturing companies provide a pool of talent boasting the kind of engineering skills that software companies engaged in high-end work crave, and the presence of a large number of engineering and business schools "is encouraging entrepreneurship the way Stanford has done in Silicon Valley". "Pune is one of the hottest cities to watch in India today," sums up Haque.

Pune City: Urban sprawl, yes, but it is also sign of a booming local economy

Urban mess: This shanty town creeping up the hillside compares with Mumbai's worst

That's a fair assessment and it could explain why some of New Vernon's more high-profile investments (think Veraz Networks and AmberPoint) are in the process of putting down development centres in the city. As for it-enabled services firms, the city has its own (and obvious) charms. One such firm is Ventura, a large UK company (2004 revenues: £131 million or Rs 1,034.9 crore) that opened its first ever offshore centre in Pune three months back. "Pune struck us as a great option given the educational hub it is," says Anupam Arun, Country Manager, Ventura India. "It draws people from all over the country and that is great from the voice perspective of the business." Arun also claims that wage- and infrastructure-costs are lower in Pune, although Kaushik Shekar, a portfolio management consultant who moved to the city recently, points out that "if you take away rentals and conveyance costs, the cost of living is just as high as in Mumbai", and Mathai Joseph, Executive Vice President, Tata Consultancy Services (he heads the firm's R&D centre in Pune and says the company will soon club much of this and its four development centres in the city into one large campus) believes the city could do with some investment in infrastructure. "Pune simply hasn't had the investment it needs in roads and power," he says.

That combination of problems, power and roads, brings to mind Bangalore, and the urban mess it has been reduced to, and Arun, who admits that there are several things that need to be addressed on both fronts, says, "That's simply not an image we want to lapse into." Already, city-based activists (a very strong constituency and a possible carry over from Pune's standing as an education hub with a multitude of institutions offering practically every discipline of the arts, sciences and technology) are crying themselves hoarse over hills being hacked down to make way for ill-planned townships or over traffic that crawls to a halt as arterial roads simply buckle under the pressure.

Bumper-to-bumper: Snarling traffic headaches (and pollution) bring to mind bustling Bangalore

So, will Pune go the Bangalore way or will it live up to Haque's vision? As my car finds its way to the expressway on our way out of Pune, I catch a few reassuring signs that the city just might not yet be lapsing into the kind of urban mayhem that Mumbai is. Small processions accompany Ganesh idols (the annual Ganesh festival is a big thing in all Maharashtra, including Mumbai) as they are reverentially lowered into the river, in sharp contrast to the traffic-stopping ones that do so in Mumbai (the city virtually comes to a halt on the day of visarjan, or immersion of the idols). I later find out that the city has strict regulations governing the composition of the idols themselves (they have to be made of dissolvable materials since they are to be immersed in the river) and that non-governmental organisations dig giant pits across the city to make compost out of flowers used in the puja. Maybe there is hope for this city after all.