Bengaluru vs Hyderabad: Will attempts to woo tech firms by neighbouring states succeed?

Karnataka Chief Minister Basavaraj Bommai recently dismissed the comparison between Bengaluru and Hyderabad as a ‘joke'. It is a well known fact that to hit the headlines or garner maximum eyeballs, politicians do end up giving rhetorical statements. One such example is Telangana IT Minister K.T. Rama Rao's statements and counter-statements to KPCC president D.K. Shivakumar. It is obvious that both are trying to take advantage of Bengaluru-based entrepreneur Ravish Naresh’s (the founder of the Bengaluru-based startup Khatabook) displeasure over infrastructure facilities in Bengaluru city. Even Tamil Nadu’s Finance Minister Palanivel Thiagarajan had an opinion on the developments. He claimed that his state is keeping a watch on the happenings in Karnataka and that the IT companies have massive interest in diversifying to TN. However, experts and industry pundits ponder whether such attempts succeed in the long run. 

“Bengaluru's lack of adequate infrastructure in proportion to the demand is nothing new because the city is growing in terms of population and private investment. KTR says Ravish Naresh can pack up from Bengaluru and settle in Hyderabad as it is better than Bengaluru. But in 2020, Hyderabad witnessed large scale inundation and rainwater entering houses and office complexes. Even IT offices, including Infosys, were not spared. Bengaluru had also hit the headlines in 2012 at a global level because of its garbage crisis. While KTR claimed Hyderabad would be like New York, S.M. Krishna promised to make Bengaluru the next Singapore. Both are just claims. Bengaluru and Hyderabad have been able to attract industrial investments not because of politicians but because of their talent pools. The back offices of top MNCs are located in these two cities, despite the fact that both cities lack infrastructure facilities,” remarked Girish Linganna, Defence Analyst and Managing Director of ADD Engineering India (an Indo- German Company).

It is a known fact that Bengaluru held the sixth position in an overall analysis of the 10-year period between 2008 and 2018 for the top destination for ICT and electronic sectors, as per London & Partners, the Mayor of London’s promotional agency. Hyderabad was ranked 14th in the same analysis.

“Minister Thiagarajan should not forget that Chennai city drowned due to rains in 2021 and 803 roads had to be laid. In 2015, life was paralysed in Chennai, thanks to water stagnation. The conservative outlook of Chennai is not allowing it to grow into an inclusive city,” added Linganna.

Industry representatives from Bengaluru point out that such steps will succeed in small measures, because of the infrastructure and the regulatory framework that the states such as Telangana and Tamil Nadu are working to provide. They also have very forward-looking policies to attract these investments. 

“One of the key reasons why Bengaluru and Karnataka attract technology investments is the weather which neither Telangana nor TN can replicate. These states are very forward thinking (TN and Telangana) – they are demonstrating political will to get the investments in. On the other hand, one of the things that Karnataka is suffering from is that there seems to be a lack of political will to support IT and ITES ventures. This is one of the reasons why TN and Telangana seem to be becoming better destinations for these kinds of companies. Because of the pervasiveness of tech companies the sheer number of the tech and IT professionals along with the strong engineering education ecosystem - all add up to making Bengaluru a fertile ground for young tech entrepreneurs – whether in terms of talent, collaboration, connections or even infrastructure support. That being said, Bengaluru is just one of the hubs and it is not the only one. Gurugram is also a hub, and there are multiple start-hubs which are emerging across the country. This is great and that is how it should be,” pointed out Shekhar Sanyal, Country Head and Director, IET India.

Industry representatives also point out that Bengaluru is the pivotal IT mountain around which an unusual tug of war has started. “Rama Rao, the IT Minister of Telangana, on one side, D.K. Shivakumar of the Karnataka Congress on the other, and Chief Minister Basavaraj Bommai on the third side. An interesting rope with three ends being tugged at to churn out the elixir of more IT jobs creation. Let there be healthy competition in the form of good physical and social infrastructure to let youngsters choose wherever they want to work and live in this country. The country also belongs to the younger and future generations,” remarked H.S. Srivatsa, Professor – Faculty of Management and Commerce, M. S Ramaiah University of Applied Sciences, Bengaluru.