Consolidate Bengaluru’s position as an epicentre of global innovation

Bengaluru’s innovation ecosystem ranks among the Top 5 globally, with robust systems for technology development across multiple sectors, research and development, and human capital. The city has nurtured a thriving community of frontier technologists and engineers and has played a pivotal role in India’s evolution into the world’s third-largest startup ecosystem. Bengaluru indisputably stands as India’s IT capital, science capital, biotechnology capital, avionics capital, space capital, startup capital, and, essentially, India’s high-tech and innovation capital.

As a global IT hub, Bengaluru houses some of the world’s largest software services companies, with five out of the top ten and three out of the top five companies globally being Indian and mostly centred here. The IT boom has paved the way for Bengaluru to accommodate a disproportionate share of tech-enabled startups, with over 4,500 in Bengaluru utilising artificial intelligence and machine learning to build indigenous platforms.

Additionally, Bengaluru is home to over 450 research laboratories, and over 400 of the world’s Fortune 500 companies have a presence in the city. While these may have started with outsourcing, many have recognised the value of establishing core technology centres here. The city also boasts an impressive pool of over 100,000 PhDs, drawn by the research and specialisation opportunities.

With over 300 companies employing more than 300,000 chip designers, testers, and embedded software engineers, Bengaluru possesses a unique concentration of human capital for India’s semiconductor initiative like no other Indian region or city. Additionally, the city is home to over 30,000 automotive software engineers and 15,000 aeronautical engineers.

Having built the technology development capacity and human capital base, Bengaluru is at an inflection point in consolidating its position globally and is unique among Indian cities. 

Rising prosperity has brought forth several infrastructure challenges. Bengaluru, due to its high-income job opportunities, has witnessed significant immigration. The population is now 12 million—the fourth largest in the country. Inadequate public transportation has resulted in a high concentration of 11 million private vehicles—6.5 million two-wheelers and 2.5 million four-wheelers. Infrastructure development has not kept pace with the population explosion and increased prosperity, severely hampering the productivity of the average Bangalorean and stunting the city’s potential as a global high-tech hub.

Ironically, the city is India’s most prosperous. Karnataka’s GDP is expected to reach ₹25.7 lakh crore in FY24 ($320 billion+), and Bengaluru reportedly contributes 60% of the state GDP ($192 billion), amounting to a staggering per-capita income of around $16,000 per year! It is a strange case, as it leads India in per-capita income and innovation but lags 15 years in infrastructure development. Successive state governments seem to have mastered the art of managing poverty by liberally distributing taxpayer money without any desire to prepare for prosperity. This attitude continues to hurt the productive sectors of the state economy, especially in Bengaluru.

To improve productivity, the government must focus on upgrading Bengaluru’s infrastructure:

Improve the existing road network.

Introduce a fleet of 10,000 electric buses for public transportation.

Develop 120 km of elevated roads to alleviate traffic congestion.

Build 100 km of peripheral ring roads.

Expand the Metro to cover a total of 500 km to increase the capacity to 30 lakh commuters daily.

Establish a robust suburban rail network to complement existing public transportation.

Expand the KIAL airport to handle larger passenger and cargo volumes.

Create a global MICE (meetings, incentives, conferences, and exhibitions) complex near the airport to attract more visitors.

The city’s governance system can be improved by dividing the city into five separate corporations. This move will ensure better service delivery, eliminate corruption, and improve quality of life.

Infrastructure investments will pay off a thousand times when the productivity of Bengaluru’s workforce accelerates. It will signal the city’s seriousness in consolidating its position as a technology hub and attract more domestic and foreign investments and human capital. With this, Bengaluru can produce 15 lakh high-quality jobs over the next five years, increase its software exports to $120 billion by 2027, and overtake Silicon Valley as the world’s largest pool of software talent, among other specializations.

Additionally, Bengaluru needs sustained resources and forward-looking policy frameworks to continue leading India’s technology efforts. A ₹1,000 crore fund will be a strong start and can be utilised to build more research facilities, install state-of-the-art equipment, and incentivize technologists and scientists to develop cutting-edge technologies in the city.

For a state that is spending ₹80,000 crore on providing freebies to keep election promises, ₹1,000 crore is a pitiful sum to invest in the future. Other states, even countries, wish they had the competitive advantage a city like Bengaluru provides, while Karnataka already has it. It’s
time the state machinery put serious capital behind maintaining and enhancing
this advantage.

Bengaluru is the jewel in the crown of Karnataka, and indeed India as well, but sadly, it does not get its due from either the state or the Union Government. As India grows into the world’s third-largest economy by 2027, Bengaluru can continue to lead the nation’s innovation efforts and become a more attractive destination for the world’s capital and talent pools, provided governments at the central and state levels invest in creating the necessary infrastructure and future-forward technology development facilities.

(Pai is the chairman of 3one4 Capital and Holla is Technology Fellow, C-CAMP)