Bengaluru is more confident about going digital than even San Francisco

Image: Reuters/Abhishek N. Chinnappa
We may earn a commission from links on this page.

Despite the perennially gridlocked traffic, flooded streets, lakes that spew toxic froth, and a looming water crisis, business leaders are enthralled by Bengaluru.

India’s Silicon Valley has topped a ranking (pdf) based on a survey by the Economist Intelligence Unit and telecom firm Telstra that questioned executives on six categories—people and skills, financial environment, innovation and entrepreneurship, new technology development, information and communications technology (ICT) infrastructure, and overall environment for digital transformation. “Across geographies and industries, businesses are embarking on, or preparing for, a mission to put digital technology at the heart of everything they do, an exercise that has come to be known as digital transformation,” the report explained.

The survey was conducted between June and July this year and included 2,620 executives in 45 cities across the world.

Three of the top five cities in the ranking are Indian:

“India’s cities may suffer more than most from infrastructure deficits, pollution, poverty and other ills, but when it comes to the environment for digital transformation, their executives are remarkably optimistic,” the report said.

Bengaluru is home to the Indian headquarters of multinational companies such as Microsoft, IBM, and Intel. Around 30% of the country’s technology startups—including unicorns like e-commerce website Flipkart and mobile advertising firm InMobi—and some of India’s leading IT giants such Infosys and Wipro are also based in the southern Indian city.

This concentration of business has attracted some of the best minds across a number of industries, but the rapid expansion of Bengaluru has stretched the physical infrastructure of this city of 10 million people to the limit. As a result, the quality of life in this metropolis, once known as a haven for the retired and for its gardens, has steadily plummeted in recent years. Yet, the availability of world-class talent may be among the reasons why the respondents surveyed felt confident that Bengaluru would be able to pull off a digital transformation.

Bengaluru—and similarly New Delhi and Mumbai—has several elite higher education institutions that consistently churn out large numbers of quality technology graduates, and have established platforms for interaction and knowledge-sharing. Bengaluru is the “closest thing to Silicon Valley” in Asia, Alpesh Shah, a senior partner at Boston Consulting Group, said in the report.

And who should take the credit for this?

Not the government, respondents from Bengaluru insisted, arguing that it hasn’t done much to create the city’s strong digital environment. ”Nothing is being done proactively by governments to help digital transformation,” Shah said in the report. “The best things governments do there is to stay out of the way.”