Karnataka has taken a monumental step in furthering its position as a global leader in innovation, research, and technology by launching a draft policy for Global Capacity Centres (GCC). Aimed at generating US$ 50 billion in economic output and creating 350,000 new jobs by 2029, this policy is designed to attract 500 new GCCs to the state, cementing its leadership in AI research and development and reinforcing its reputation as the top destination for business transformation in India.

The policy launch, spearheaded by Information Technology and Biotechnology Minister Mr. Priyank Kharge, reflects Karnataka’s commitment to boosting investor confidence and fostering seamless collaboration within its thriving local innovation ecosystem. The draft policy, which is currently open for public input, was developed following extensive consultations with over 500 industry experts and leaders. It sets ambitious goals for economic growth, sectoral expansion, and strategic collaboration over the next decade.

Key Objectives and Growth Projections

At the policy launch event, Mr. Priyank Kharge declared, "Today, we proudly launch India's first dedicated policy for Global Capability Centres (GCCs), reaffirming Karnataka's position as the top destination for innovation and business transformation." He further elaborated that GCCs have undergone significant evolution, transitioning from their origins as back-office operations to becoming critical drivers of global strategic initiatives, research and development, and technology solutions.

According to Mr. Kharge, GCCs currently contribute US$ 22.2 billion to Karnataka’s economy and employ over 1.2 million people. This contribution is expected to see significant growth, with the sector projected to grow at a compound annual rate of 12-14% over the next decade. By 2029, Karnataka aims to capture nearly 50% of the national GCC market share, consolidating its leadership in AI research and business transformation.

The Role of GCCs in Economic Growth

The GCC sector in Karnataka is already a major contributor to the state's economy, generating over US$ 22.2 billion in economic output. The sector employs over 1.2 million people in a variety of roles, from R&D to strategic technology development. With this new policy, the government aims to further elevate the role of GCCs, positioning them at the core of global innovation and economic growth.

According to industry estimates, the GCC sector in Karnataka is poised to grow at a 12-14% compound annual rate over the next decade, creating 350,000 new jobs and attracting 500 new GCCs to the state. This influx of talent and investment will not only contribute to the state's economic growth but also reinforce Karnataka's standing as a global leader in AI and technology development.

Beyond Bengaluru: Expanding the GCC Ecosystem

While Bengaluru has long been recognized as a global hub for technology and innovation, the draft policy seeks to extend this momentum to other regions of Karnataka. The policy introduces the "Beyond Bengaluru Package", an initiative specifically designed to attract investments and foster development across the state, ensuring that the benefits of GCC growth are spread more evenly.

This effort is bolstered by the planned development of Global Innovation Districts, which will feature three new state-of-the-art technology parks—one in Bengaluru and two in surrounding clusters. These parks are designed to facilitate collaboration between startups, tech leaders, and academic institutions, creating an ecosystem conducive to cutting-edge research and development.

The Global Innovation Districts

A cornerstone of the Karnataka GCC policy is the creation of Global Innovation Districts, which will feature three new state-of-the-art technology parks. These parks will serve as hubs for collaboration between startups, technology leaders, and academia, ensuring that R&D efforts are closely aligned with industry needs. One of these parks will be located in Bengaluru, while the other two will be situated in surrounding clusters to help expand the innovation ecosystem beyond the city.

Anchor investors in these districts will benefit from a range of special incentives, including customized packages for mega projects. This will make it easier for global technology firms, AI research centres, and strategic innovators to establish a presence in Karnataka, further bolstering the state’s leadership in innovation-driven economic growth.

Policy Incentives and Collaboration

The new GCC policy is designed to enhance collaboration within the local innovation ecosystem, ensuring seamless communication between global enterprises, startups, academia, and the government. The policy provides a range of incentives for investors, including tax benefits, customized investment packages, and reduced regulatory barriers.

A major focus of the policy is ensuring that the GCC sector not only contributes to the state’s economic output but also plays a key role in job creation and talent development. To this end, the government is working to ensure that academic institutions and training centres are well-equipped to produce the skilled workforce necessary to meet the needs of a rapidly growing GCC sector.

Ms. Ekroop Caur, Secretary to the Government of Karnataka’s Department of Electronics, IT, BT, and S&T, emphasized the policy’s commitment to expanding the GCC ecosystem beyond Bengaluru. "The Beyond Bengaluru Package is designed to attract investments in underdeveloped regions and create a more equitable distribution of economic growth across the state," she said.

Supporting the AI Revolution

Another key focus of the GCC policy is fostering AI research and development, with the goal of establishing Karnataka as a global leader in the field. Global Capability Centres in Karnataka are already playing a critical role in AI development, driving innovation in areas such as machine learning, automation, and data analytics.

With AI increasingly shaping the future of global business and technology, the Karnataka government is committed to ensuring that its GCC policy supports cutting-edge AI research and development initiatives. The establishment of Global Innovation Districts will play a crucial role in this effort, facilitating collaboration between AI researchers, technology companies, and academic institutions.

Job Creation and Economic Impact

The policy’s ambitious goal of creating 350,000 new jobs by 2029 reflects the government’s commitment to ensuring that Karnataka’s workforce is well-prepared to meet the demands of a rapidly expanding GCC sector. The state already employs over 1.2 million people in the GCC industry, and with 500 new GCCs expected to establish operations in Karnataka by 2029, the demand for skilled talent will only increase.

In addition to direct job creation, the policy is expected to have a significant economic impact, contributing US$ 50 billion to the state’s economy by 2029. The Global Innovation Districts, Beyond Bengaluru Package, and anchor investor incentives will ensure that Karnataka remains at the forefront of global technology and AI development.

Conclusion

Karnataka’s GCC policy is a bold and forward-looking initiative designed to solidify the state’s position as a global hub for innovation. With its ambitious goals of creating US$ 50 billion in economic output and 350,000 jobs by 2029, the policy sets the stage for unprecedented growth in the Global Capability Centres sector.

As the state continues to attract global investors, develop cutting-edge technology parks, and foster AI research, Karnataka is well-positioned to lead the next wave of innovation-driven economic growth in India and the world. Stay informed about investment opportunities in Karnataka and explore the latest tech sector developments through the Best Startups of 2024

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