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What Bangalore should learn from the Rise & Fall of Detroit!
Hari Anil
Monday, October 3, 2011
What if the IT industry goes down? Yes, it is a highly unlikely, but is it an impossible scenario? No, in the present business world, no business scenario is an impossible scenario. It will be highly arrogant for the industry to think that it will never happen. If there is one thing the rise and fall of Detroit can teach the world, then that would be, 'no industry is fail-safe'. What better example is there than Detroit? A city that depended on one major industry that boasted it will never fail; the automobile industry. It was the base of the 'Big Three' automobile manufacturers; Ford, General Motors, and Chrysler. The companies that literally believed, 'Whatever happens to this world, people will keep on buying cars'. Well, as usual, they were wrong, and that too by a huge parameter.

The world was hit by recessions, oil price went up like a rocket, and the average American income was nowhere near catching up with it. Yet, for a while, the population stayed loyal enough to their home grown brands, and said no to the foreigners like Honda, Hyundai, Suzuki, and others. Finally, they had enough; they were no longer ready to pay hefty amounts to get cars that offered them lower mileages, and decided to try their luck with the low cost, better mileage foreigners. They tried them, they loved them, and they took them as their own. That was the start of the downfall of the ‘Big Three’, so was that of Detroit. Once a city of glory, the rich and the famous, a haven for the job seeking mass, Detroit is now nothing more than a haunted soul of its past. It is being engulfed by the disastrous and tragic fate of the very industry that brought it to the lime light. Now, there is something in this story that is for all the cities in this world, more so for Bangalore.

What is the similarity between Bangalore and Detroit? Differences are aplenty, but similarities are rather few. Let us concentrate one of these few similarities; the backbone of the city. Like automobile industry was to Detroit, is IT to Bangalore. Around 35 percent of India's IT exports is based out-of-Bangalore, and the city is known as the Silicon Valley of the country. It is not wrong to say that the heart of the city is its IT industry. Now, what will happen if this heart stops beating? What, is it not possible? Of course it is possible! We have seen what happened to the IT industry in the last recession and in the future more recessions would come. No matter what we do and how we try to fix the global economy, it seems to be going to end up with a similar fate, as that of Humpty-Dumpty.

For some years now, the state lacks a stable government, and the politicians are working round-the-clock, to keep their positions safe, and have practically little time to spare for anything else. This again, is meant to have a negative effective on the future prospects of the city. The infrastructure is becoming more and more congested, each passing day, and the city’s traffic is becoming impregnable. All these, along with other cost factors, may also make the IT firms here, willing to migrate to Tier-2 and Tier-3 cities. These Tier-2 and 3 cities are now offering many benefits, both financial and infrastructural, and a few companies have already started migrating. So, the question is what will happen to Bangalore if the IT industry abandons the city, or if it goes down and does not recover for a very long time? Do we have a backup plan? Don't we need one?

There are other industries in Bangalore, which have been here for a while, way before the first IT Company came here; examples are the Silk, Manufacturing, Space Technology, Aerospace industries, and even Education. We need to concentrate more on these industries. The idea is not to reduce concentration from the IT industry, but to give equal recognition and concentration to the other industries as well. A balance should be acquired; where, even if one industry goes down, the others will balance the city. That kind of stability is vital for the long-term growth of any city. Detroit did not do this, and the city suffered for something that they did not do. Let us save Bangalore from a similar fate. However unlikely it is for the IT industry to go down, why take the risk when we can play it safe?

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