Bengaluru is predicted to be among the world’s top 10 fastest growing cities with its GDP predicted to expand 8.5% per annum year-on-year between 2018 and 2035, according to analysis firm Oxford Economics. This is phenomenal growth considering the fact that the world’s major urban economies are projected to grow by 2.8% a year in the same period.
The strong economic backbone of the city was built on visionary political leadership that helped articulate sector-specific policies for information technology, biotechnology, start-ups, electric vehicles, animation, and the aerospace industry.
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On the supply side, the presence of some of the country’s best research-led academic institutions meant a steady supply of highly skilled talent. Bengaluru also produced a crop of first-generation entrepreneurs who successfully put Indian information technology and biotechnology on the world map. The entrepreneurial DNA of Bengaluru also meant that it is the heart of India’s venture capital industry, accounting for nearly 80% of all VCs.
All these factors made Karnataka and its capital Bengaluru an attractive destination for inflow of investments that created industries which generated millions of direct jobs and several times that number in various secondary and tertiary support services.
Beyond IT, biotech and startups, Bengaluru supported the machine tools, construction machinery, aerospace, electronics, garments and automotive industries. It produces 60% of the machine tools of India. It is the second highest producer of special purpose and heavy electrical machinery, as well as the second highest contributor to aerospace exports from India. It also accounts for 20% of the national garments production.
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The economic opportunities offered by the city has led to rapid migration from other parts of the country. Today, over half the people (51%) living in Bengaluru are migrants, according to migration data recently released by the Office of the Registrar General & Census Commissioner.
Bengaluru has emerged as India's highest-ranked city at No. 83 in a new index of the world’s 113 cities in terms of economic and social inclusivity, topped by Zurich in Switzerland. Delhi at 101 and Mumbai at 107 are the other Indian cities to make it to the first-ever Prosperity & Inclusion City Seal and Awards (PICSA) Index.
Creating value
The soft-and-hard infrastructure in technology, entrepreneurial energy, cluster effect and cosmopolitan outlook have combined to made Bengaluru’s ecosystem a wealth generator across the value chain.
In 2019, Bengaluru ranked as the highest paying city in the country. According to Randstad Insights Salary Trends Report, the average annual cost to company (CTC) in Bengaluru for talent at a junior level stood at ₹5.27 lakh, compared to Hyderabad (₹5 lakh) and Mumbai (₹4.59 lakh).
On the other end of the spectrum, the city is home to the most number of tech billionaires and millionaires in India. Bengaluru has an estimated 200-plus family offices, of which probably 50 have large sums that they are looking to invest in the next Big Idea!
Bengaluru is today home to several unicorns, including Flipkart, Ola, Byju’s, and Inmobi.
Taking on the challenges of rapid growth
This supercharged growth experienced by Bengaluru over the last decade has created wealth for its residents but has not come without associated challenges with regard to infrastructure. Mobility, waste management and water have all become key concerns for citizens today.
The city is growing in size every day, and the scale of the problems we face is also increasing. Bengaluru will need world class infrastructure, if we are to have a world class city. At the moment, there are serious deficits in physical infrastructure, knowledge infrastructure, social infrastructure and financial infrastructure. Water is an urgent concern for the city and citizens, especially young adults, need to think critically about how to conserve this important resource.
To address these deficits, there is a need for greater connect between citizens and governance. There should be formal inclusion of citizens in public decision-making and in solving problems at the neighbourhood levels. I am proud that Bengaluru has always enjoyed a unique culture of active engagement by various citizens’ groups, which are concerned with the city's administration and its well-being. It is an engagement that makes them a stakeholder in the city’s development and progress.
Corporates also need to support the government with management of resources and financial support to help develop the city, improve the environment, healthcare, education and transportation facilities. While corporates can do their part, we also need political will to create a city that is a joy to live and work in.
Bengaluru will need all stakeholders, including the government, corporates, and civil society, to come together to do their bit to transform the city into one of the most preferred and liveable destinations in the world.