Building Bangalore’s Competitive Advantage

Abstract

Cities are the backbone of the economy in most countries, serving the corporations they house and enjoying the benefits of their business. They are also a beacon for many who flock to these urban areas in the hope of better employment opportunities and quality of life. Cities are thus constantly growing and evolving in an effort to create a competitive advantage that can attract and retain more business. The pattern of city growth can be traced back to several factors that influence the location decisions of businesses to cluster. Service sector led cities witness the most prominent impact in real estate development, given that their economy is heavily reliant on business networks and economies of agglomeration. As such, these cities also bear the drawbacks of being popular migration destinations, including overconsumption of resources, crowding and high costs. Creating an environment that can benefit corporations, residents and the Government, while still tackling the negative externalities of agglomeration is crucial to maintain a city's competitive advantage. This tension is researched through an empirical study of the factors that have established Bangalore as the Silicon Valley of India. The dynamics between the private and public sector is therefore explored, making a case for more cross-sector collaboration in order to sustain Bangalore’s competitive advantage as an IT destination.