With the number of businesses and firms in Bangalore increasing exponentially, it is no wonder that it has earned the title “The Silicon Valley of India”. The number of registered startups in Bangalore was around 7500 till 1200 were just added in 2018. They are growing daily in strength and it doesn’t seem to stop anytime soon.
India is a country with many cities and it is impossible not to wonder what makes Bangalore ‘the one’? Mumbai, Chennai, and Calcutta have better chances of succeeding because of how easy it is to trade via the sea. But, how has Bangalore outrun them?
Just like any other huge city, Bangalore has a tale to tell — of how it became home to more than thousands of startups.
The story of Bangalore
In the early 1980s, the growth of the software industry had prompted the Indian economy to thrive and industrialists realized that Bangalore was a viable place where the industry could prosper. Especially after the establishment of Electronic city, an IT hub in Bangalore, solely meant for industries, technology, and similar talents to grow, businesses found ‘The Garden City of India’ alluring and promising.
Over the years, many MNC’s built their roots in Bangalore trying to make a mark in the growing city. The arrival of MNCs should have demotivated the existing startups, but on the contrary, quite a few of their talented employees resigned to begin businesses in similar fields on their own.
The increase in the number of opportunities, mainly provided by MNCs, brought many families which gradually lead to the establishment of educational institutions, laboratories and other bodies encouraging scientific and technological development to the city. Because of the overpowering number of talented graduates, startups based in Bangalore are less burdened to pay for skilled labor when compared to other cities in foreign countries where the pay is around 13 times higher.
The software industry is booming even today and India is one of its top contributors. This has paved way for firms based on other fields like healthcare and logistics which are assisted by the IT industries to flourish.
The shooting number of investors ready to become a part of the startup community is another factor supporting Bangalore’s growth. They are always on the lookout for businesses that are in need of funding and can get them profit. Seeing the potential of the city, especially after the advent of MNC’s, many were ready to invest in startups they like. According to NASSCOM, the total investment has doubled from $2 billion in 2017 to 4.2 billion in 2018.
The long list of successful startups that Bangalore has birthed has undeniably inspired and encouraged young dreamers. Flipkart, Swiggy, Practo, etc belong to this list. Success stories of people who have gone down similar roads have been motivating the aspirers to begin their ventures.
A look into the future
According to the Global startup ecosystem report (GSER) of 2019, Bangalore's future does not look really bright. It says that the incompetence of Bangalore to nurture ‘deep tech like robotics, cleantech, smart cities, etc will affect it later by hindering its growth. As Bangalore has risen to the 18th top startup ecosystem by GSGR, the pressure on it to outperform itself and grow dynamically is more than before especially as it is the only Indian city to have got on the list of 30.
The good news is that Bangalore is already preparing to tackle this problem to move ahead. Studies conducted by NASSCOM and Zinnov have reported that the number of startups based on advanced technology like AI, data analytics and IoT has increased by 50 percent in 2017 alone.
Another study conducted by AIM also brings us good news. According to it, there was an increase in the funding for AI and analytics startup from Bangalore by 37 percent, that is, $539 million in 2017 to $ 739 million in 2018.
Moreover, the fact that Bangalore’s growth attracts young entrepreneurs from other parts of the world says how much it can still grow. According to a survey, 48 percent of companies in EIU do not think it is bad to relocate their setup to Bangalore and 42 percent of the surveyed European startups ticked it a good idea. Besides, 53 percent of Asian startups would love to move to India as they are certain their business will be profited.
It is no secret that India has a startlingly high population and a huge portion of it is struggling to be employed. In such a scenario, the fact that around 40000 jobs were directly provided in the year 2018 by startups is unignorable. This shows how influential startups are and how their growth will benefit the Indian economy.
This pull towards Bangalore is spreading to other cities of India too. With appropriate investment and energy put into deep tech, India can transform all its major cities into international business hubs.
