Bangalore’s population has more than tripled in the past 30 years: great for employers – but not so good for its creaking infrastructure, says outsourcing expert Paul Morrison.
For a decade or more Bangalore has reigned as unofficial capital of the outsourcing industry. In that time it has grown, sucking in investment, talent – and traffic.
It’s been a hugely successful time for the city, but a question now looms about its future – is it just bursting at the seams, or has it become morbidly obese?
Bangalore’s epic traffic captures something of the city’s reputation in the world of technology – energetic, vibrant – and very busy. I had a good opportunity to observe the phenomenon up close, when I helped a client to set up a new service centre in the city earlier in the year.
Stuck in the back of a taxi over a period of weeks, you can’t fail to notice the average speeds in this seething mass of humanity averaged little more than five mph, or that the rush hour in fact lasts from 5am, with a barely discernible intermission, through to 9pm.
Bangalore – or Bengaluru as it is officially known – is not the only city struggling with the demands of massive growth, supercharged by foreign investment, technology companies and outsourcing, but its rise from obscurity has been uniquely fast.
In the mid-1980s, the Garden City – also the town of boiled beans – was well known as an ideal place for retirement, with India’s best climate and a good line in pubs.
Then something happened. In one generation, the population rocketed from three million to about nine million today. The city became world famous as the home of Indian tigers such as Infosys and Wipro, and is now central to the operations of multinationals such as Motorola, Texas Instruments, Intel, HP, and 1,500 other global companies. It also accounts for one-third of India’s outsourcing revenues and is home to about 500,000 of its 1.5 million technology workforce.
In reality, the seeds of this preeminence were sown over many decades, particularly in the form of government and business investment in the aerospace, defence and telecoms sectors – like its role model, Silicon Valley.
But, by 2000, Bangalore’s flowering had become known across the world, and its profile has continued to grow ever since. Homegrown competitors – in particular Mumbai, Delhi, Hyderabad and Chennai – have also prospered. But none has approached the scale or the fame of Bangalore.
This meteoric growth is ample explanation for the…
…riot of traffic on Bangalore’s roads today, and the massive strain on its infrastructure in general. By some estimates the city now boasts four million vehicles, and one of the highest vehicle per capita ratios in Asia.
It also has the largest two-wheel population in the world – some 2.2 million bikes and rickshaws. Power outages are a regular feature of the business day, as in other Indian cities, but the building of new technology parks is continuing unabated.
As a result of Bangalore’s continuing sprawl, back office workers at Accenture or Infosys can take an hour and a half to travel to work each day and every month Bangalore’s business leaders lambast the government to do more to stop the city collapsing. These are the sort of issues that arise when a developing city swells to the size of Paris or London in one generation.
The local authorities have not been completely oblivious to the risk of Bangalore being suffocated by its own success. A new international airport now connects the city with European and American hubs – unlike the old airport that required inbound executives to change planes in Mumbai.
Perhaps more importantly, the city is also finally unveiling this month the first 7km section of a brand new $1.7bn metro system.
This development will surely have an impact. But even with the metro in place, Bangalore will still need to mind the gap – in large part because infrastructure investment has been so poor for so long. The Economist estimates that India is spending only a fraction of the 10 per cent of GDP needed to close its infrastructure deficit.
But it is also because Bangalore, despite all its problems, is still India’s fastest growing city. As Bangalore grapples with its growing pains, hundreds of thousands of young, talented people are still moving in, getting trained and getting jobs, placing yet more pressure on infrastructure.
These individuals are really why Bangalore has not yet lost its preeminence in the outsourcing world. Global businesses never chose Bangalore for the quality of its infrastructure. They chose it for the cost and quality of its people.
The city’s continuing attractiveness to employers and employees, despite its problems, means Bangalore still offers the broadest and deepest pool of skills in India. Hyderabad, Pune or Shanghai may be snapping at Bangalore’s heals, but they haven’t caught it yet.
Paul Morrison leads Alsbridge’s BPO and shared services advisory practice and blogs regularly on sourcing.