The powerhouse of Karnataka’s economic development lies Beyond Bengaluru

Cities play a crucial role in the economic development of states and the nation. More than 50 per cent of the world’s population, or 3.5 billion people, live in urban areas today. As per the World Cities Report 2020 by UN-Habitat, it is likely to grow to 68 per cent by the year 2050.

Urbanisation is an essential prerequisite for a nation’s development towards building a more robust and stable economy. The relationship between cities and economic wealth is positively linked and is such that most of the world’s largest cities are on the list of the world’s largest economies. The development of cities is considered the driving force of economic development.

Karnataka’s startup story has become a folklore

Karnataka is the second largest growing state in India, with a compound annual growth rate of 8.1 per cent between 2013 and 2017. We have the third highest FDI investment in the country. India’s Silicon Valley Bengaluru is the largest software exporter contributing nearly 40 per cent of its national IT exports. Even during the pandemic, four of the seven startups that became unicorns are from Bengaluru- Unacademy, Postman, Razorpay and Zerodha. Karnataka’s startup story has become an inspiration and an aspiration for others to emulate. However, comprehensive economic development is the need of the hour for our state.

Bengaluru: Lone powerhouse of state’s economy

Bengaluru city is the powerhouse of Karnataka’s economic development. Other districts have a minor contribution to the total revenue derived from the IT, Business Processing Outsourcing (BPO), Electronic System Design Manufacturing (ESDM) and telecom sectors. India’s aim of becoming a trillion-dollar digital economy can be made possible in the next five years by the comprehensive development of cities beyond Bengaluru. This is where the Beyond Bengaluru initiative plays a crucial role.

Beyond Bengaluru initiative

The government of Karnataka kicked off the Beyond Bengaluru initiative at the end of 2020 to achieve this. We have focused on six emerging technology clusters under this initiative- Mysuru, Kalburgi, Shivamogga, Hubballi-Dharwad, Mangaluru and Tumakuru to identify solutions models to increase the demand and supply in cities outside Bengaluru. By building innovation and technology ecosystems in these cities, we aim to help the state retain its leadership position in the IT sector, create industry clusters, and accelerate holistic economic development. The focus also stretches to tier-3 cities in the state.

As a result of the policy implementation, Hubballi-Dharwad, which has the second-largest urban population in the state, has started to pull in investments and has started to blossom as a startup cluster. The coastal city Mangaluru is getting identified as a prominent emerging IT cluster. Soon, the city will have its own IT park.

The other regions outside Bengaluru will gradually emerge as attractive destinations for IT/ITeS, BPO, ESDM, Animation, Visual Effects, Gaming and Comic and Telecom. Beyond Bengaluru is expected to contribute $5 billion (1–2 per cent of Karnataka’s GSDP).

Corona pandemic reimagined work world.

Coronavirus pandemic has profoundly altered the workspace through work from home, work from anywhere and remote execution of work that was hitherto considered impossible. Our focus on Beyond Bengaluru helped us effectively leverage the state’s talent and skill. We worked with telecom companies to fix network issues in tier 2 and tier 3 cities. Now, employees can work from home or co-working spaces outside Bengaluru. We are now looking at infrastructure development, market access, talent development and ecosystem engagement in the regions outside Bengaluru.

With many policies such as financial support for IT hubs, lease/rental reimbursement, exemption on stamp duty, industrial power tariff instead of the commercial tariff, marketing and patent cost reimbursements, the Government of Karnataka has made it easy for companies to look beyond Bengaluru

Every city has its unique demographics, and through our macro-level approach, we will use it to catapult the state’s growth. For instance, Mangaluru has more scope for export and import-based industries, while Hubballi-Dharwad has opportunities in the education, auto, and hospitality industries. Heritage city Mysuru has varied options in food processing, IT, and the construction sector.

Force multipliers for Beyond Bengaluru

To help achieve Beyond Bengaluru’s objectives, National Educational Policy 2020 will act as a force multiplier that will prepare the groom students who pass out every year to be industry ready. Syllabi of polytechnic and engineering courses are revised to offer internship opportunities to strengthen the academia-industry connection and study varied subjects. With the state’s new IT policy, we have set the goal of creating 60 lakh direct and indirect jobs in the next five years by facilitating ecosystems in cities beyond Bengaluru.