Will the IT industry survive in India?

IT strategy

For a long time the story of the wondrous computer Indians was told everywhere. It was about a group of well-trained IT specialists who provide high-tech services for companies from all over the world for little money in their office cubicles or on an assembly line. But in the past few years, many of these software specialists have started their own companies. India is experiencing an incredible startup boom. 4,200 young technology companies have sprung up, putting India in third place after the USA and Great Britain.

One of these success stories is Urban Ladder, a company founded in 2012 that sells its own branded furniture online. The in-house creations are in the office: hanging chairs, modern rocking chairs, shelves reminiscent of Ikea, colorful lampshades. The 1500 employees, including 300 at the company's headquarters in Bangalore, can play table tennis and billiards during working hours, help themselves with the free snacks or take a nap in separate bedrooms. Just like the great role models in Silicon Valley.

Large corporate campuses

The head of the IT department at Urban Ladder is female, at 38 years of age, well above the average age of her team - and only recently returned from the USA. "When I left Bangalore in 2000, there were only a few service providers here. Now Google and LinkedIn have set up huge campuses here," says Sonia Parandekar. She worked for Microsoft for a long time, then at Groupon. But now she is back in her home country. "There are so many options for us here!" She says.

In the past year, it is estimated that around nine billion US dollars (8.2 billion euros) were invested in Indian startups. The year before it was only $ 2.2 billion. Because the up-and-coming emerging market with a population of billions has what is considered to be the new gold: many bright minds. If investors spread their money, the chances are high that something will blossom somewhere on the fertile ground. "There is so much money flowing. Everyone is really excited," says Parandekar.

Urban Ladder has raised $ 77 million so far. Last year, co-founder Ashish Goel admits, those who only raised their arms received money. This year it will certainly be more difficult. But he is confident about the future: "Something magical will certainly happen here." The city is vibrating, people everywhere in the caf├ęs are discussing which app or webpage they are currently working on. More than 5000 people from all over the world came to the first edition of the startup conference "Surge" on Tuesday and Wednesday.

"The new workbench in the world"

The success of the startups has also brought the Indian government to the scene. Prime Minister Narendra Modi, who has been in office since May 2014, actually wanted to attract a large number of manufacturing industries to his country - after China, India should now become the new workbench in the world. But the "Make in India" campaign is not going well. In January he therefore announced the "Start up India" mission. The government wants to invest hundreds of millions of euros.

However, startup veterans like Anil Srivatsa are skeptical of government interference. Because up to now, the IT sector or the call center business are doing so well in India because New Delhi failed to create rules and laws for these sectors. "I try to do business where I don't need the government," says Srivatsa. He founded eight companies, including Radiowalla, an online music platform that provides background music to around 7,000 cafes, restaurants and shops.

Recently, says Srivatsa, the tax authorities came. "They want to collect income tax on the investor money that Radiowalla received. Totally crazy!" The climate is not really entrepreneur-friendly, he complains. He lived in the United States for a long time, but came back to help rebuild his country. "If the government regulates the Internet, I'll go again," he says. (dpa, Doreen Fiedler / sh)