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India’s global capability centres (GCCs) are projected to become a $100 billion industry by 2030, employing over 2.5 million professionals, according to a recent report. A study titled “India’s GCC Landscape: A Strategic Pathway for Mid-Sized Aspirational Corporations to Scale Beyond” and highlights how India is a home to as many as 1,700 GCCs. These centres collectively generate an annual revenue of around $64.6 billion while employing 1.9 million professionals across diverse areas of operation. The study also says that by 2026, 70% of India’s GCCs will incorporate AI to achieve progress, thus correlating with an earlier study by EY.
Setting Up of Innovation Districts in India to attract GCCs
Talking about recent developments on the GCC front in India, Karnataka has been quite the preferred destination for GCC, due to its abundance of availability in engineering talent and AI professionals. With the same in mind, the state has taken a significant step forward that is directed at strengthening the state’s leadership position.
At the inauguration of the 27th Edition of the Bangalore Tech Summit, organized by the Department of Electronics, IT and BT, Karnataka CM Siddaramaiah made the announcement that Karnataka is all set to establish three global innovation districts in Bengaluru, Mysuru and Belagavi to bolster its tech and innovation ecosystem. These districts will be attracting Global Capability Centers’ (GCCs) and help startup establishments.
In Bengaluru, the global innovation district will be part of the Knowledge, Wellbeing, and Innovation City (KWIN City), about 45 minutes from the international airport.
The event saw the release of the Unboxing Bengaluru data report. Karnataka is a beacon of innovation for India, hosting over 875 esteemed GCCs.
The Startup Jump in Karnataka
There has been a remarkable growth in the startup ecosystem of the state with an 18.2% increase from 2022 to 2023, totalling 3,036 startups, making Karnataka the leader in the south with 8.7% of India’s total startups.
Karnataka’s collaboration with the Indian Venture and Alternate Capital Association (IVCA) has connected more than 200 startups with 100 funding firms, providing capital, mentorship, and growth opportunities.
The state also announced initiatives to skill one lakh people in relation to the five Memorandums of Understanding (MoUs) that were inked during the tech summit with Microsoft, Intel, Accenture, IBM, and the BFSI Consortium and establish a PCB manufacturing cluster in Mysuru, EVs and drones in Hubballi- Dharwad and Fintech in Mangaluru.
Additionally, the CM also announced an electronics manufacturing cluster (EMC) at Kochanahalli in his home district of Mysuru. The EMC will strengthen the state’s role in the global semiconductor industry, creating jobs and driving economic growth in both urban and rural regions.
Significant Developments in Bengaluru Attracting GCCs and Startups due to Ease of Business
Mega Projects like the tunnel project and Bengaluru Business corridor, launched by the Government will further improve ease of living as well as ease of doing business for startups and GCCs. The tunnel project, an 18-kilometer underground vehicular tunnel, part of the Brand Bengaluru initiative being led by Bengaluru Development Minister DK Shivakumar can significantly improve traffic flow through the core of the city.
The PRR project a 73.5-kilometre, 100 meter wide, eight-lane expressway is also set to kick start in a few months which will be able to solve the traffic congestion in the city to a large extent and help boost growth of businesses on the Outer Ring Road.
Companies Playing a Significant Role in Providing Employment Opportunities and How
- Karnataka aims to train over 10,000 trainees each year in emerging technologies, focusing on deep tech, in collaboration with Microsoft.
- In partnership with Intel, it intends to train over 20,000 trainees annually in AI through various programmes.
- Accenture, in collaboration with the government, is providing 10,000 people with training in emerging technologies such as cybersecurity and quantum computing.
- IBM has committed to training 50,000 people in AI and cloud services.
- The BFSI Consortium trains 10,000 people in banking and finance, ensuring they secure placements in reputed companies within the fintech sector.
Karnataka’s GCC Policy Solidifying its Position as a GCC Leader
The State introduced the Karnataka Global Capability Centres (GCCs) Policy 2024-2029 which aims to solidify the state as the most sought-after destination for innovation and excellence.
The state’s GCC policy draft targets establishment of 500 new GCCs in Karnataka achieving a total number of 1,000 GCCs, to support creation 3.5 lakh new jobs and generating US$ 50 billion in economic output in the state by 2029 to catalyse economic growth beyond the state capital.
While Bengaluru is already hosting 30 percent of India’s GCC and 35 percent of its workforce, it doesn’t come as a surprise that the state is looking to further expand in this direction through this policy.
The GCC policy, according to a statement emphasizes a “beyond Bengaluru” initiative to promote equitable development across tier-2 and tier-3 cities such as Mysuru, Mangaluru, Shivamogga, and Hubballi-Dharwad. Incentives will be provided to companies setting up in these regions, facilitating the decentralisation of innovation hubs and nurturing untapped talent pools.
The GCC policy is built upon four foundational pillars like cultivating a highly skilled workforce, fostering collaboration between GCCs and Karnataka’s innovation ecosystem, establishing a supportive regulatory framework, and offering targeted incentives for growth both within Bengaluru and beyond.
Wrapping Up
Karnataka is the global destination for startups with 400 Fortune 500 companies in Bengaluru alone. The state’s initiative to establish three Global Innovation Districts underscores the state’s commitment to fostering a robust ecosystem for Global Capability Centers (GCCs). By creating specialized hubs equipped with cutting-edge infrastructure and nurturing innovation, the state aims to attract global players and solidify its position as a leading technology and talent powerhouse. This move is expected to accelerate economic growth, enhance global collaborations, and reinforce Karnataka’s reputation as a preferred destination for businesses seeking innovation-driven solutions.
