Bangalore’s status as India’s Silicon Valley started getting attention during the 1990s, thanks to a concentration of firms specializing in research and development, electronics, and software production. The moniker ‘Silicon Valley of India’ was first mentioned at the international level in an article by the United States Agency for International Development (USAID), favourably evaluating the potential of Bangalore to become a technology hub similar to Silicon Valley in the US. From the year 2000 onwards, the IT industry in the city grew exponentially, with several dot com companies having prototypes of internet-based technologies ready to function being set up rapidly.
The focus on Bangalore as India’s Silicon Valley began with the efforts of R. K. Baliga, the first Chairman and Managing Director of the Karnataka State Electronics Development Corporation (KEONICS), set up in 1976. He proposed the idea of creating an Electronics City in Bangalore in the 1970s. Today, the vision of Bangalore as a place of opportunity for NRI tech entrepreneurs has been more than realized, as quite a few Silicon Valley residents, including American citizens, have set up businesses in Bangalore, having faith in its potential to become as large and influential as Silicon Valley, California.
Unsurprisingly, the business savvy of the city has been matched by the growth and modernization of its infrastructure, as the government of Karnataka has invested heavily and collaborated efficiently with private enterprise towards making Bangalore India’s IT capital. This hand-in-hand growth in infrastructure and business has led to a huge influx of talented individuals in the tech domain, and consequently has raised the demand for residential accommodation as well as commercial real estate.
NRIs find Bangalore as an attractive real estate investment destination due to several factors. These include:
– The volatile performance of the Rupee against the Dollar: The Rupee’s steadily depreciating value is offering good value for money to investors and has led to a steady increase in enquiries from expatriates.
– Booming demand for Bangalore real estate: With the affluent population growing steadily and its demand for quality accommodation increasing manifold, the prospect of purchasing real estate as an investment has grown more and more attractive.
– Slow economic growth: Another reason for expatriate investors wanting to park their funds in Bangalore’s real estate is the slow economic growth for the last few years, which has depreciated the value of property by 8 – 10 percent, an event that NRI investors are capitalizing on.
– Varied options provided by real estate developers: In keeping with the capitalistic outlook and booming growth of the city, and its trendy citizens, real estate developers provide a blend of properties, from town houses to villas to premium apartments, and more.
– Real estate planning blended with corporate planning: Real estate developers have understood the importance of developing projects in or near corporate or commercial hubs so as to facilitate minimal inconvenience in commuting as well as place residents within reach of facilities like malls, hospitals, schools, parks and other urban resources.
– Projects patterned on international standards: More and more builders are developing projects especially targeting the NRI segment, offering facilities and amenities similar to the ones they experience abroad so they don’t have to make significant changes to their lifestyles.
– Finally, availability, affordability and a good standard of living are the key factors driving demand.
Apart from this, in general terms, Bangalore attracts a large number of IT/ITES and BPO investment because of these reasons, among others:
– Moderate climate
– Good labour relations
– Excellent education and research institutions
– Good telecom connectivity
– Advanced infrastructure
– Progressive state policy
– Positive investor perception
What makes Bangalore stand out from other Indian metro cities that are also making efforts to attract IT investment and grooming local talent to distinguish themselves in the industry? According to the KIG 2020 study carried out by the Karnataka ICT Group, by the year 2020, Bangalore is expected to become the single largest talent pool in one location. The number of IT professionals, the numbers of individuals indirectly employed due to the growing IT industry and the value of its exports, even today, are much more than the combined values of Hyderabad as well as Chennai, two other metro cities that have been vying for an attractive slice of the lucrative IT pie.
As compared to Bangalore, investment possibilities in its competitor metro cities may be hampered due to the following reasons, among others:
– Language barrier (E.g., North Indians face difficulties in Chennai, since it is primarily a non-Hindi speaking city)
– Poor quality public transport (E.g., Chennai has extremely aged, overcrowded, and unclean buses nearing or having surpassed scrap value, still being used actively for public transport)
– Political instability/unrest (Hyderabad, is still struggling with the Telangana issue)
– Terrorism (bomb blasts in Mumbai, Hyderabad)
– Extreme weather conditions (Chennai has extreme humidity and heat, Delhi has unbearable extremes in summers and winters)
– Prohibitive land prices caused by the IT boom (Hyderabad)
Ultimately, Bangalore prides itself on being one of the most progressive-minded and cosmopolitan cities in the country, and its technologically and economically advanced population drives this image. Surveys on popular websites have underscored Bangalore as the most cosmopolitan city in the country. Bangalore’s strengths lie in talented resources, good educational institutions, a large English speaking population, and technological prowess. However, it is a proactive state government that makes constant efforts to facilitate new investments, which gives Bangalore an edge over other Indian cities. No wonder that NRIs, having observed these trends, are making a beeline for Bangalore.