An essential improvement in the current decades noticed all more than the world, specifically in created and emerging economies, is the fast and growing emergence of tech commence-ups. This holds excellent for India as effectively. However, in contrast to regular/modern day manufacturing and service enterprises, they do not emerge anyplace and everywhere. The crucial characteristic of these tech commence-ups is that they emerge predominantly in urban places, which have a minimum help program in the kind of markets, finance, and human sources, amongst other people.
In other words, entrepreneurship for tech commence-ups gets nurtured in these areas exactly where there is an entrepreneurial ecosystem comprising the crucial components of help for entrepreneurial birth and development. But the pertinent query is what determines the evolution of an entrepreneurial ecosystem in an economy? What does it comprise as a program? How does it nurture tech commence-ups? Given its evolution, structure, and part in the promotion of tech commence-ups, how to ascertain its sufficiency or adequacy for additional promotion of tech commence-ups to the benefit of regional economies? These concerns will need to be understood in-depth, if policymakers have to initiate additional policy measures to strengthen entrepreneurial ecosystems in India, for the advantage of tech commence-ups.
Among all the tech commence-up hubs in India, Bengaluru stands apart, and Hyderabad is a close competitor with Bengaluru, for more than one cause. Both are two of the most vibrant cities globally today, and each have a substantial base of Fortune 500 corporations (belonging to IT & BT industries) and consequently, have a considerable “stock & flow” of S&T personnel. The ever-growing working population is largely comprised of an educated workforce who are tech-savvy. Bengaluru is a repeatedly recognized worldwide commence-up hub, whereas Hyderabad is an “upcoming” commence-up hub.
Given this backdrop, it would be acceptable to probe how did entrepreneurial ecosystems emerge in these two cities? What historical variables facilitated its evolution? What do these ecosystems comprise as a structure? What part do they play in the emergence of tech commence-ups and their subsequent lifecycle? Are these two ecosystems matured sufficient to market tech commence-ups in a major way, all through their lifecycle? If not, what do they lack with reference to an “ideal ecosystem” that is feasible in the Indian context? Would it be doable to see a massive-scale emergence, stability, and accelerated development of tech commence-ups to turn out to be “global giants” in these two ecosystems, related to Silicon Valley of the US?
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The origin of the entrepreneurial ecosystem of Bengaluru can be traced back to India’s independence in August 1947 and that of Hyderabad to its integration with India in 1948. At this point in time, each the cities have been non-entities on the worldwide scale and have been mere city centers (of trade and business) at the national level. However, public policies to establish crucial Central Public Sector Undertakings led to the starting of their six-decade-lengthy journey to turn out to be todays’ globally identified tech commence-up hubs. This was quickly followed by the emergence of supportive Small & Medium Enterprises (situated in newly set up and dispersed industrial estates) and the establishment of public and private greater education institutions.
As a outcome, by the mid-1980s, each cities came to have vibrant modern day industrial clusters comprising engineering and electronics industries. Further, each the cities became the nucleus of “modern industry, modern education, and S&T personnel” in the nation. Obviously, educated labour began flowing towards these cities to make their careers. This led to the entry and development of IT followed by BT industries in Bengaluru, whereas BT followed by IT industries in Hyderabad. The positive part of public policies in these developments was crystal clear. While private business (supported by a responsive regional government) played a big part in the subsequent emergence of IT cluster in Bengaluru in the late 1980s and thereafter, the pro-active part of the regional government (positively responded by private business) was evident in the emergence and development of IT cluster in Hyderabad in the late 1990s and just after. This was followed by the emergence of an “R&D affiliates cluster” in Bengaluru in the late 1990s onwards, whereas it took at least half a decade more for the emergence of such a cluster in Hyderabad.
Thus, all round, 3 distinct but overlapping phases can be noticed in the laying of the foundation for the evolution of a “visible entrepreneurial ecosystem” for tech commence-up hubs in Bengaluru and Hyderabad. But situations favored Bengaluru more than Hyderabad, which enabled the former to have a clear edge more than the latter in gaining recognition as a “Hub of Tech Start-ups” in India and beyond.
M H Bala Subrahmanya is a Professor, Department of Management Studies at the Indian Institute of Science. Views expressed are the author’s personal.