Karnataka's new GCC policy to spur new job creation across different specialisations

Recently, the government of Karnataka came up with a comprehensive Global Capability Centres (GCCs) policy, becoming the first state in the country to do so. The policy aims to attract the establishment of 500 new GCCs in the state and create 3.5 lakh new jobs by 2029.

The GCCs are expected to generate an economic output of $50 billion in Karnataka by 2029.

Experts with whom THE WEEK spoke feel this policy will leverage Karnataka’s robust talent pool, thriving startup ecosystem, and strong infrastructure. "The policy has a focus on skilling, which will be driven by initiatives like the 'Nipuna Karnataka' programme for advanced skill development in AI, ML, and emerging tech. The vision is to expand employment opportunities beyond Bengaluru to Tier-II and Tier-III cities through the 'Beyond Bengaluru' initiative. They plan to invest in infrastructure in those cities and build collaboration with local academia, making it possible for companies to set up GCCs there,” remarked Aditya Narayan Mishra, the CEO and MD of CIEL HR.

This GCC policy aims to make Karnataka a leader in AI and innovation, enhancing job opportunities across sectors such as IT, R&D, retail, BFSI, and healthcare. “This will open up hiring in diverse roles such as AI engineers, data scientists, R&D specialists, software developers, cybersecurity analysts, digital transformation managers, business intelligence analysts, customer experience managers, and global delivery leaders, further solidifying Karnataka’s position as a global innovation hub,” Mishra said.

GCCs in India have grown beyond just providing back-office support. They now play a major role in the tech industry, acting as important tech hubs closely connected to their parent companies. These centers act as valuable resources for companies aiming to boost their competitiveness, simplify operations, and tap into a wide range of talents worldwide.

As companies deal with the challenges of globalisation, GCCs are essential in reshaping operations and helping them achieve long-term success. GCCs are not just outsourcing centers; they are a key part of a company's overall strategy. By centralising important functions like research and development, IT services, customer support, and finance, companies can improve efficiency, reduce costs, and easily scale up their operations. These centers allow businesses to access specialised skills, cutting-edge technologies, and innovative methods that may be hard to find or costly in their local markets. In addition, GCCs help promote better collaboration between various regions, encouraging a culture of knowledge sharing and ongoing improvement.

Currently, there are around 1,600 GCCs in India, and this number is expected to increase to 1,900 by next year. The market size of the sector has expanded to $60 billion, up from $19.6 billion in 2014-15, showing an annual growth rate of 11.4 per cent. Between 2018-19 and 2023-24, the GCCs created over 6,00,000 new jobs, increasing the total workforce to more than 1.6 million.

According to the latest Economic Survey, GCCs are expected to generate $121 billion in revenue by 2030. This is about 3.5 percent of India's current GDP, with $102 billion anticipated from exports.

Investing in developing employees' skills is no longer just about growing talent; it has become essential for businesses. Keeping a company's workforce updated with the latest industry knowledge, technologies, and best practices helps maintain a competitive advantage. It helps retain the best employees and gives the workforce more power, making them more productive, creative, efficient, and adaptable.

“GCCs are prioritising reskilling and upskilling employees in cutting-edge technologies like automation and robotics, including drone delivery and automated medical procedures. These innovations offer promising solutions for everyday challenges. Additionally, advancements in edge computing and virtual reality have the potential to streamline processes and enhance user experiences. These efforts are crucial not only for challenging and developing tech-savvy employees but also for ensuring a skilled workforce capable of achieving organisational objectives. Leadership development programmes are being designed to nurture future leaders who will drive transformation and growth within the organisation,” said space and aerospace expert Girish Linganna.

GCCs are working with educational institutions through their Campus Outreach Committee to identify courses employees can take beyond regular training programmes. They also support continuous learning by reimbursing higher education expenses, as outlined in their reimbursement policy. This approach helps enhance adaptability, change management, and strategic partnerships.

“GCCs are focusing on retaining top performers, who are receiving salary increases 1.6 to 1.8 times higher than the average. Currently, Gen Z—those born from 1997 onward—makes up about 20 per cent of the workforce, while millennials—people born between 1981 and 1996—constitute 70 per cent. This tech-savvy Gen Z generation is growing quickly and will soon represent nearly half of the tech workforce, collaborating with millennials,” added Linganna.

Industry is also upbeat about the kind of job creation this policy will bring in the state and are eagerly gearing up for the same. “Karnataka's thriving IT ecosystem, characterised by the presence of numerous prominent GCCs, has significantly contributed to the state's overall office real estate landscape. Bengaluru's dominance in the GCC sector is attributable to its exceptional talent pool, robust technological infrastructure, and dynamic start-up culture. With a staggering two million-strong tech workforce, the city has firmly established itself as India's undisputed technology capital. Bengaluru accounts for over 40 per cent of the country's total GCCs. The new policy, coupled with strategic interventions, is poised to strengthen the GCC ecosystem further, thereby attracting both occupiers and investors to the state. Moreover, this policy can potentially create opportunities beyond Bengaluru, accelerating development in other regions of Karnataka. The policy announcement aligns favourably with the prevailing growth momentum and will foster a resilient ecosystem that seamlessly integrates real estate and talent,” said Ram Chandnani, managing director, advisory and transaction services, CBRE India.