One thing that is common across my friends in Bengaluru, is how much they complain about the city’s traffic. It’s not like the other big cities in India do not have traffic. But it’s just that between 2001 and 2011 (when the last two censuses were carried out).
Bengaluru’s population more or less doubled from around 43 lakh to 84 lakh. The roads and the other physical infrastructure haven’t really been able to keep pace.
But this is not a column about the physical infrastructure in Bengaluru not being able to keep pace with the city’s population. What I want to explore is that if people are so irritated with the city’s traffic eating into their time and lowering their quality of life, why don’t they simply move to a city which has lesser traffic, like Hyderabad or Pune, for that matter.
The answer lies in the fact that Bengaluru does not face what Karthik Shashidhar calls the “Sriperumbudur problem” in his book Between the Buyer and the Seller. For those who don’t know where Sriperumbudur is, it is a small town near Chennai. For many years it was famous as the place where the former prime minister and the Congress leader Rajiv Gandhi was assassinated in May 1991.
In the last few years it has been famous as the place where the telecom giant Nokia first set up a factory and then it shut it down. The Nokia factory used to employ 8,000 employees at its peak. Once the factory shutdown, the skilled workers who used to work there had a tough time finding comparable jobs in Sriperumbudur. Most workers were forced to settle for jobs that paid less and the working conditions were not as good as they were at Nokia.
Almost at the same time that Nokia shutdown it’s factory, Yahoo decided to shutdown its engineering operations in India, which were largely located in Bengaluru. Other companies scrambled to recruit the Yahoo employees. Some even set up dedicated portals to recruit them.
While, the Nokia employees in Sriperumbudur had a tough time finding comparable jobs, the Yahoo employees were lapped up one after the other. As Shashidhar writes: “The market for people building mobiles phones was rather thin in Sriperumbudur, with only one employer (Nokia) and the set of people working there.”
This basically shows the importance of clusters or a group of companies manufacturing a similar product or providing a similar service, being located close to one another. Bengaluru is a cluster of IT companies and the kind of IT jobs that are available in Bengaluru are simply not available anywhere else in the country.
As Shashidhar writes: “[The] cluster tends to attract companies which hope to supply to more than one of these companies. The presence of several companies in the cluster means that the risk of setting up a supplier infrastructure is reduced – the supplier is partly hedged even if one of the manufacturers he supplies to goes bust. The reverse is also true.” This basically makes the labour market liquid.
And this explains why my friends and many other people who keep complaining about the Bengaluru traffic, continue to stay in the city. The quality of work and the job options that they have in the city, they don’t have in other cities.
In fact, industrial clusters have been around for a while. The first industrial clusters happened after the Industrial Revolution started in Great Britain. The textile mills were set up in towns like Manchester and Birmingham and not all over the country. Along similar lines, Detroit emerged as the automobile hub in the United States, where the big three car companies operated out of. Globally, the financial services business is clustered around New York and London.
In India, a bulk of Hindi films are shot in Mumbai. The financial services business is also largely based out of the city. Bengaluru has the IT companies. The hosiery business is based out of cities like Ludhiana and Tirupur.
And this happens because there is a certain logic to the entire thing. Clusters make sense, the huge traffic in Bengaluru notwithstanding.
The column originally appeared in the Bangalore Mirror on Sep 27, 2017.