Over the previous few decades, India has established itself as the ideal ecosystem for technological entrepreneurship, attracting enterprises from all over the world. More players have jumped on the bandwagon, offering various sorts of assistance to start-ups on multiple fronts. Over 12.5 million people live in the “Silicon Valley of India,” in the heart of South India. Bangalore is growing at a breakneck pace, with an average annual economic growth rate of 6.5 per cent. However, the question now arises: what is the unique element in Bangalore’s demography that has transformed it into start-up heaven for entrepreneurs?
Pull factors for Bangalore Innovation Ecosystem
Bangalore’s dominant innovation ecosystem is the consequence of various actions undertaken over time – government policies, the sizeable number of engineering colleges, and the readily available talent while also being millennial-friendly.
1. Government Support- The state government is working hard to leverage this tech dominance to create a thriving start-up and innovation ecosystem. Already more than 4,000 start-ups call Karnataka home. The Government of Karnataka was the first Indian state to establish a dedicated Start-up Cell to promote the state as a start-up destination. Its Innovate Karnataka initiative provides financial support to start-ups through various funds.
2. Academia– Bangalore’s development as a start-up hub is due to the presence of numerous engineering colleges, prestigious academic institutes, and centres of excellence. As a result of the ready-made talent pool, several Indian, as well as foreign corporations and R&D centres in the aerospace, biotech, and later IT industries established offices in Bangalore.
3. Industry- Bangalore is home to three of India’s top four IT employers, including Infosys, IBM India, and Wipro. The city is attractive to people from outside due to its welcoming attitude and cosmopolitan vibe. Conclusively, Bangalore has a strong triple helix composed of government (policy support), industry, and academia. This development has progressively and steadily led to the emergence of all the components of an entrepreneurial ecosystem in the city, with the technology startups to prove it.
4. Infrastructure- Karnataka, a technological innovation leader, is home to 44 per cent of India’s R&D centres, including some of the country’s largest, including Google’s first AI and machine learning focused centre, Intel’s largest 5G technology design centre, GE’s largest IoT R&D centre, all of which are second only to their US locations, and Samsung’s largest R&D centre outside of South Korea. The state’s Startup Cell aspires to build world-class incubation facilities and promote Bangalore and Karnataka as top startup destinations.
5. Access to Investors- There are several investors in Bangalore. As a result, business owners can easily contact a large number of venture capitalists and business angels. A startup that has a fantastic idea, vision, and drive can get an investor in Bangalore quite simply. Funding is crucial and essential for starting a startup. If they register their businesses in accordance with the Karnataka Shops and Commercial Establishment Act of 1961, entrepreneurs may also submit funding requests to the Government of Karnataka (GoK). In 2015, the Karnataka government unveiled its startup policy. It has established various funds totalling more than 3 billion rupees (about USD34 million) to support companies in a variety of industries, including biotechnology, travel, and animation.
USA Silicon Valley vs Indian Silicon Valley
Silicon Valley is often regarded as the global epicentre of disruptive innovation. Over the last decades, it has transformed from a rural area known for its orange orchards to a dynamic ecosystem for startups, new technologies, and effective business models. This ecosystem for innovation has been crucial in the development of novel technologies and in laying the groundwork for current global trends. For the time being, the region continues to dominate the global startup and innovation scenes.
Silicon Valley, USA, and Bangalore, India’s startup ecosystems are similar and dissimilar in terms of how they are organised, how their respective stakeholders are established, and how they interact. Because we are discussing two separate cultures and socioeconomic regions: the United States and India, each startup ecosystem has its own identity.
A strong spirit of the frugal invention in India stems from “Jugaad.” This spirit of creation is embedded in most of the startups of the ecosystem of Bangalore, whether they copy and adapt locally existing business models (e.g. Amazon, WhatsApp, etc.) or they disrupt and address unserved or underserved markets by using new or existing technologies. We may speak about frugal innovation because initiatives and organisations in India must cope with the fact that resources are limited, and a large portion of the Indian population aspires to modern goods and services but cannot afford them. In America, however, startups focus exclusively on high-tech innovation because resources are plentiful. Furthermore, design thinking has become a well-known innovation method in Silicon Valley and elsewhere. This innovative approach has inspired many enterprises by rethinking existing business models and markets, resulting in entirely disruptive business models that successfully satisfy client needs and requirements.
Bangalore has become an enticing magnet for all digital entrepreneurs thanks to its salubrious climate, large technical pool, established private and public technology institutes, and proactive government regulations. The city also has one of the most open and friendly cultures in India, with over 100,000 PhDs, top technical talent from around the country, and two million people today working in technology. A true ecosystem built by the best people as an example of what India can contribute to the world, Bangalore will lead India as the epicentre of innovation in the age of disruption.
The startup ecosystem in Bangalore is the most mature in the country, with a large pool of trained workforce who are potential entrepreneurs, academic institutions of higher learning in both technology and management, angel and institutional investors, and large technology companies that are partners and customers, and incubators and accelerators.