Network: The city where brains come cheap

In Bangalore, a software engineer gets £176 a month. In the West, it's £1,600. Enter the multinationals. Tim McGirk reports

If you need a few extra quid for an evening out and the cash dispenser in the high street has devoured your card, the chances are that the fault in the bank's computer system will be fixed in several hours by software engineers thousands of miles away inBangalore, a futuristic city in southern India.

It may come as small consolation when the bank machine has wrecked your evening's entertainment to learn that banks and other high-street companies are now plugging into global, 24-hour computer networks to iron out their glitches swiftly. Many big multinational computer firms are setting up data link stations staggered in the world's different time zones to give round-the-clock software support to their customers.

Increasingly, computer giants, such as IBM, Texas Instruments, Motorola, Compaq and many others, are relying on India. Not only does India (which is five-and-a-half hours ahead of GMT) fill the time gap with the Far East, but it also provides a vast poolof talented scientists and computer engineers.

Not surprisingly, while the recession in the US and Europe has forced many electronic and computer firms to lay off workers, the trend is to expand operations into developing countries such as India where brainpower is cheaper.

Texas Instruments India, for example, which has a staff of more than 230 software engineers in Bangalore, pays its graduates a monthly wage of £176, while in Britain a computer engineer can take home a starting salary of more than £1,600 a month.

The quality of work is also high. Texas Instruments' quality manager Indradeb Pal says: "Today, we have a stronger technical base than Malaysia and Singapore," both Asian countries with large computer industries.

In the mid-Eighties, when foreign computer companies first set up in Bangalore - a balmy garden city that houses several prestigious technical institutes and scientific research laboratories - many of them used their Indian branches for such tedious number-crunching jobs as programming bar codes for supermarket goods. But now these companies rely on their Indian scientists to invent and test complex integrated circuits and sophisticated computer tools with global applications.

The programming sweatshops, like small family tailors running off garments on their sewing machines, may soon die out in Bangalore. Texas Instruments' Mr Pal says: "Clients don't just want programming; they want complete systems and services." And India

provides that - inexpensively.

Like most Indian cities, Bangalore is plagued by power shortages, but the government has overcome such obstacles to build Electronics City, a computer technology park 12 miles outside Bangalore.

Nearby, farmers may plough their mustard fields in the ancient way using oxen, but inside the park there are facilities to rival any in Britain. Satellite dishes beam out high-speed data flows to North America, Europe and the Far East, and large generators provide instant back-up to keep the systems from collapsing when the city's power dims. Already, there some 25 software centres in Bangalore, all linked to satellite dishes.

Although foreign computer companies started eyeing up India in the mid-Eighties, what speeded up their entry was the economic reforms started more than two-and-a-half years ago by the current prime minister, Narasimha Rao. Punitive import duties were scaled down, making it feasible for the companies to bring in high-powered Suns and Hewlett-Packards, which were needed to set up engineering workstations.

The Indian government also lifted restrictions on foreign exchange and capital movements, which enabled the multinationals to ship home a bigger share of their earnings in foreign currencies.

The problems that afflict most Indian cities - the wretched slums, seething tension between Hindus and Muslims, and streets heaped with rubbish - also bedevil Bangalore. But the city may overcome these woes. Although computer engineers ride to their high-tech laboratories across pot-holed streets in Ambassador cars designed in the Fifties, they have one foot in the 21st century when they arrive at work.

Of the estimated 25,000 electronic-mail users in India, 10,000 reside in Bangalore. The city whirrs with intellectual activity. Professor UR Rao, former head of India's space research programme, says: "If there's a scientific conference here - and we often have Nobel prize-winners speaking - you can bet there will be 300 or more in the audience. In Delhi or Bombay, you'd be lucky to get 50 people."

Eavesdropping on conversations among scientists and engineers in Bangalore's many bars that served draught beer (another reason, perhaps, why multinationals settled here rather than India's more prohibitionist cities), you may hear a hotly debated topic:will developing countries eventually usurp all the clever technological jobs from the industrialised countries?

Some argue that with the world's manufacturing base shifting to countries such as Malaysia and Korea that have cheap workforces, it is inevitable that the industries that rely on university-trained workers will follow. But others disagree. Mr Pal says: "So far, India's share of the market in computers hasn't increased significantly."

There is also a limit to how many Indian scientists may be capable of world-class work. Although India has more than 3.8 million scientist-technicians on the market, most of them graduated from cash-strapped universities where chalk is hard to come by - let alone personal computers. The dozen best science and engineering institutions only trained 3,000 graduates this year. Of these, nearly half are likely to emigrate to the US or Europe to grab the high-paying electronics and computer jobs while they last.