News agencies recently quoted Chief Minister HD Kumaraswamy as saying that Bengaluru had reached saturation levels, did not need any more industries and that restrictions would be imposed on further activities, besides incentivising industries to shift to tier-II cities.
But, why is Bengaluru the choice for setting up industries in the first place? Strategically located, reasonably close to other prominent South Indian cities, Hyderabad and Chennai, the location makes for a perfect base. Potential industrial partners, even competitors, are mostly located in the city, making it easier to collaborate and compete.
Located right here are several service providers well equipped to satisfy the needs of the newbie. With comparatively cheap real estate and dedicated IT parks, companies are able to start their operations with minimal effort. With one of the best airports in the country and a well-connected railway system, the city has excellent connectivity to cities within the country and around the world.
Its weather is the first advantage that Bengaluru has over other cities, putting it miles ahead of competitors. To this, add education facilities, the number of private engineering colleges and the ready supply of graduates that make it ideal for mass recruiters.
Bengaluru has become the face of the outsourcing industry, providing outsourcing services in diverse areas, having already made the transition from delivering volume-based work to technology-related services, offering global technology companies a unique combination of talented resources, a large network of vendors and partnership opportunities with its huge pool of skilled and technology-savvy workforce.
Apart from the IT multinationals, Bengaluru is emerging as the biggest hub for startups. Former US president Barack Obama once famously said, “Say no to Bengaluru and yes to Buffalo”. Admittedly, “Bangalored” has become part of the lexicon.
A strong community of engineers with global work experience, savvy customers and growing pools of early-stage capital are transforming the city into a global start-up hub, much like Silicon Valley in the US. A solid pipeline of cost-efficient talent, low cost of hiring, minimum time taken to hire and a salary that’s most competitive in the country ensures that Bengaluru is miles ahead of its peers.
Native Bengalureans are welcoming people, with their “swalpa adjust madi” attitude, making everyone feel at home in the city. A cosmopolitan city, with international schools and quality housing facilities, it is the number one choice for expatriates in India. Entrepreneurs flock to Karnataka’s capital, drawn by a unique culture of mentor-ship and networking amongst its high density of entrepreneurs and investors.
With dozens of new companies building products in information technology, healthcare, education and retail, Bengaluru’s reputation as a hub for cutting edge technology is rising. A pocket-friendly cost of living and a happening night life further make up for Bengaluru’s flaws and crumbling infrastructure.
Bengaluru’s initial growth was due to heavy central government investment in public sector industries, which resulted in a concentration of technical and scientific skills. The city now contributes over 85% to the economy of Karnataka, accounting for almost 98% of the state’s software exports and making it one of the most productive metros in India.
Only Bengaluru has so many defence and public sector organisations and is the headquarters of large public sector heavy industries. The Hindustan Aeronautics Limited (HAL) manufactures, under licence, various fighter aircraft for the Indian Air Force, the National Aerospace Laboratories develops civil aviation technologies. India’s premier space research organisation, Isro, develops satellites and launch vehicles.
Bengaluru accounts for more than 65% of India’s aerospace industry, with Boeing, Airbus and GE Aviation having their R&D and engineering centres in the city. One of India’s largest biotechnology companies, Biocon, is based here. The Indian Institute of Science was set up here over a 100 years ago and contributes significantly in advanced computing and other areas of science research.
It is often acknowledged that the “tech” industry grew so well in Bengaluru despite the government. Given today’s competitive entrepreneurial culture, any restriction on industries locating themselves in Bengaluru will drive them out of Karnataka itself. As for incentivising a move to tier-II cities, can incentives ever be the sole reason for setting up an industry? They add to a corporate’s profitability, but there are various other reasons behind the choice of a location.
Driving industries to tier-II cities of Karnataka will require strenuous marketing activity by the government and its institutions — the Karnataka Industrial Area Development Board (KIADB), the Karnataka Small Scale Industries Development Corporation (KSSIDC), the Small Industries Development Corporation (SIDCO), simultaneously backed by a competent leadership with a will to address industry challenges so that Karnataka’s tier-II cities develop some attributes comparable to that of Bengaluru.
(The writer is a former director on the Board of BEML)