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B for Bangalore and biotech

Anjali Prayag

Madhumathi D.S.

``While Karnataka is the acknowledged leader in information technology, I would like the State to lead the next revolution in biotechnology...''

-- Karnataka Chief Minister, S.M. Krishna, in his Budget speech.

It started unfolding quietly, just as everyone was wondering, `what after IT'. Hailed as the enterprise to watch out in the 21st century, biotechnology, once limited to pharma and farm R&D, started catching the fancy of everyone from investment-savvy Sta te Governments, entrepreneurs, academia, to analysts and venture capitalists.

Small wonder that today it is the new star that

Karnataka has quickly hitched its wagon on to, with Bangalore donning one more hat of what everyone likes to call `the new revolution'.

Karnataka -- if Krishna and his Secretary for IT and Biotechnology, Vivek Kulkarni -- have their way, may well be the biotech and technology hotspot of India. Krishna's oft-stated new mission: ``We will target global pharma companies to look at Karnataka , in particular Bangalore, as investment destination.''

Long ago, Winston Churchill may have found Bangalore, ``a third-rate watering place without a sea.'' Today, it is sitting on a biotech goldmine. Experts conservatively estimate that this pot of gold could well be worth Rs 500 crore to the economy.

The first step in the Krishna Government's well laid out biotech plans was to set up a Vision Group on Biotechnology last year and announce the Millennium Biotech Policy in February this year.

The policy is targeted at luring global pharma and health companies. It talks of infrastructure, removes locational restrictions and allows biotech startups to set up shop in residential, commercial or industrial areas, with the promise of uninterrupted, priority power supply. In effect, a red carpet has been rolled out in style for the next big wave.

It has been over a decade since IT happened to Bangalore. Naturally there is a new excitement about the novelty called biotech. All the talk is about the second economic wave and the prestige it will bring to the city. But what is not being discussed is the extra baggage that Bangalore may have to handle in the form of more infrastructure deficiencies.

The software boom of the 1990s brought hundreds of software MNCs, hordes of highly paid professionals and their sleek cars to this small sleepy pensioners' town, which was what Bangalore was until then. Their neo-consumerism changed the face of Bangalore 's cozy lifestyles, converting it into a test market for every product launch. The affluence pushed up, albeit briefly, real estate prices, added restaurants and clubs, while overburdening its small roads and thin power and water supply facilities.

Even as Bangalore is grappling with these warts, is the place of 5.5 million people ready to take on another booming business?

Nearly 150 biotech companies are already operating in the city. On the anvil are three biotech parks in the State, of which one is to be located in Bangalore. The infrastructure-plans include creation of a biotech corridor on a 30-acre plot to house R&D institutions, biotech companies and incubation facilities.

As a result of all these moves, an estimated 30,000 professionals -- on a conservative estimate -- are likely to descend on Bangalore in the next one year alone. This does not count their families or the attendant influx of those from related areas of bu siness such as venture capital funds, banks, restaurants or retail outlets.

Dr. C. Manohar, Secretary, Federation of Karnataka Chambers of Commerce & Industry, observes, ``Most problems of modern cities are due to the inability to anticipate the pace of change and make necessary predictions.''

According to environmental activist Leo F. Saldanha, the Chief Minister and his friends are merely talking about the glamour of the whole process, and not looking at its flip side. ``It's a skewed way of viewing development. Besides, much of the investme nt will not come into the mainstream. Only the burdens of growth fall on the mainstream,'' he cautions.

The entire development process, according to him, has been investment-oriented with `the more, the merrier' attitude. Saldanha is particularly concerned that available housing will be subjected to great strain. ``It will force the lower middle class once again to the fringes of the city to lead a ghetto life.'' During the industrialisation processes of the 1960s and the 1970s, he says that policy-makers went about in a planned manner. Though several townships were set up, they did not impact the city. ` `These were built without adding to the congestion.'' What the authorities seem to forget is that Bangalore is radial and any expansion clogs the arteries.

The 5.5-million population has just one half-hearted public transport system called the Bangalore Metropolitan Transport Corporation. The elevated light rail transport system, conceived in the 1990s, is hanging fire. The much talked about international a irport project is still a far cry. Daily water is a dream but the one step forward has been the twin management contracts for the city.

Manohar says the state of roads is pitiable. The Airport Road, according to him, is the only road connecting the airport to the city. ``That road takes the entire load of traffic. Worse, there are hotels and residential complexes bordering the road.'' Th ere are more than 15 lakh registered vehicles, of which 75 per cent are two-wheelers. Servicing the radial city are a couple of flyovers which have taken an exasperatingly long time to come up.

Have the civic authorities seriously looked at the lessons from the IT boom?

Vinay Baindur, who is with voluntary body CIVIC Bangalore, is not too happy that the Government should be bending over backwards to help one industry. The growth of the city should not be linked to any one industry because the boom and bust keep happenin g. ``You should have a broad vision, not a sectoral vision for the State or the city.... The pros and cons of development should be explained to the lay people.''

Saldanha regrets that urbanised Indians are crippled by the sprawl identity present in the US. ``We cannot afford the indulgence of the sprawling suburbs that we see abroad. If we are basing our development on the California model, look at this: Californ ia State has 55,000 MW of installed power, while Karnataka has 5,700 MW.'' And biotech requires continuous power for air-conditioning and refrigeration.

Last year, the State Government set up the Bangalore Agenda Task Force (BATF), a think-tank with a heavy corporate representation. This is meant to find solutions to the city's growth problems and meet its rapid industrialisation head on.

At this year's BATF summit, a TN Sofres Mode survey revealed that most citizens perceived little improvement in the status of civic services. The verdict: only 10 per cent of those covered believe that the overall status of civic services has improved a lot in the last one year; 19 per cent say that it is status quo.

So, will the biotech dream turn out to be Bangalore's nightmare?

Director of Industry and Commissioner for Industrial Development, G. Gurucharan, brushes aside the fears. A spawn of new companies will surely draw in more talented professionals and there will surely be a demand for civic amenities.

``The biotech boom will admittedly put some extra pressure but also hasten the process of reforms in the utilities and lead to upgradation in these. Besides, BT, unlike IT, won't be restricted to Bangalore and will happen all over Karnataka -- in places such as Hubli and Mangalore, for example.''

Another soothsayer is Kiran Mazumdar Shaw, CMD of Biocon India and head of the Vision Group on Biotechnology. The development, she says, would be on par with the international standards and impetus would be on research and development. According to her, the biotech market is worth a whopping $2.5 billion and there's no doubt that Bangalore will devour a major chunk of that.

The reasons for Gurucharan's optimism: ``We are already on time-bound programmes on the power, water and airport fronts. The power sector reform, by 2002, should reduce the 20 per cent energy deficiency further.''

Kalpana Kar, BATF member, shares this: ``Everything goes through a gestation period. A sustainable solution should be viewed not in a short-term perspective, but as a long-term gain. Problems will get ironed out over a period of time.''

``We cannot stop industrialisation, instead there should be an integrated development plan,'' says Dr. Manohar.

But the horizon is not one hundred per cent gloomy. There are some silver linings too. The State, with the assistance of World Bank and HUDCO, plans to spend over Rs 12,000 crore over the next few years on infrastructure projects. The civic body, Bangalo re Mahanagara Palike, expects to spend about Rs 650 crore. The power sector will see a spend of Rs 3,000 crore and a wholesome Rs. 950 crore on improving urban infrastructure.

Deepak Mullick, President of the Greater Mysore Chamber of Industry, points out that the direct international flights by several foreign airlines would boost the growth of the knowledge industry in the State.

Kalpana Kar is upbeat about the entire growth process. ``The pressures on the city are bound to be there, and we cannot afford to forego the growth opportunity.''

Ask T.P. Issar, former Chief Secretary, Karnataka, and he would say Bangalore can easily handle two, not just one giant industry. ``We have lots of real estate stock, both in office and residential sectors, which is not fully utilised. This is the right time to correct the housing market surplus,'' says the founder and the first commissioner of the Bangalore Urban Arts Commission.

His plank: when the software boom started, the real estate market boom saw an exaggerated and artificial inflation. Now, the growth will be more realistic.

In conversation with Kiran Mazumdar Shaw, CMD, Biocon India.

If ever there is a promotion campaign for the biotech industry, it would be best endorsed by Ms. Kiran Mazumdar, India's first woman brew-master, Karnataka's pioneer biotech entrepreneur, and CMD, Biocon India.

She was there before the others and is presiding over the biotech wave as head of the Chief Minister's Vision Group on Biotech. Some of her views on what the biotech revolution will mean to Bangaloreans:

Does Bangalore have the capacity to take on the biotech industry when other existing sectors are complaining of serious deficiencies in infrastructure -- land, water, power, roads?

One cannot ignore emerging opportunities because of infrastructural deficiencies. Moreover biotech is not power-intensive. In fact, biotech startups which focus on R&D are very comparable to IT companies in terms of their power requirements and can make do with power connections supported by UPS. Those like ours, who do need high power inputs and like all other

power-intensive industries, generate their own power and have adequate back-up power generation systems -- an expensive option but if you want to get on in business we can't wait for the Government to make up its mind to get the infrastructure right!

Land is not an issue as plenty of land is available in and around Bangalore. Water is an issue, but, once again, we have all learnt to live with borewells and the like. Roads, well.... where there is a will, there is a way!

What will biotech's impact be on population, real estate prices and the overburdened utilities?

Biotech will not create IT-like problems because what we are trying to do is encourage scientists and the like to set up enterprises -- the manpower requirement in BT is a fraction of that required for IT. Biotech is really a knowledge industry because i t is not the number of employees that determine the size of your business but the products you develop. Today, most successful biotech companies in the US have a maximum of 100 people whereas their counterparts in the IT world have at least 1,000!

What will be the effect on growing pollution in the city? How should the Karnataka State Pollution Control Board (KSPCB) gear itself up?

Biotechnology's core message is `eco-friendly' -- and therefore it has a positive impact on pollution. In fact, effluents from biotech companies are far more eco-friendly than those emanating from chemical, pharma, textiles or pesticide companies.

Will the overtures to the BT sector and the US slowdown impact shift focus from `pure' IT for students?

I believe this is already happening but I think at the moment this is only a fad. Both IT and BT have equally exciting opportunities.

How will the infrastructure delays --over the international airport; private sector water plans, IPPs -- tell on this industry?

We are exasperated with the slow-progress being made with respect to the international airport and we would love to see the contract being signed and more importantly a airport actually being built over the next two-three years.

Pic.: Flooded Sampangiramanagar in Bangalore after sudden rains.

Picture by Anand K