Inside India's 'Silicon Valley': a city straining under pressure

Silicon Valley is the undisputed global tech hub. The small corner of California is the birthplace of Apple, Google, and OpenAI — companies that have, for better or worse, changed modern life.

Far away, in the southern Indian state of Karnataka, another tech hub has been finding its footing in the international market. The city of Bengaluru is the startup capital of India and shares similar DNA to California's Silicon Valley.

Bengaluru grew into an IT hub in the wake of the rapid expansion of its electronics manufacturing industry from the 1940s to the 1960s. Back in the US, Silicon Valley was home to the semiconductor industry in the 1950s and owes its name to the silicon transistors produced there in the 1960s.

By the mid-1980s, Apple, Oracle, and Microsoft had a presence in the Valley, while in Bengaluru, large companies like Infosys and Texas Instruments moved in.

Bengaluru is widely referred to as the "Silicon Valley of India," producing tech unicorns and housing offices for companies like Amazon, Google, and Dell. After taking over Twitter, Elon Musk shut the company's offices in Delhi and Mumbai but kept the Bengaluru office. Earlier this year, Virgin Atlantic launched daily direct flights from London to Bengaluru.

However, the city's status as a tech metropole is under pressure as rapid growth tests the local infrastructure. Estimates place the current population at roughly 14 million, compared to 8 million in 2010.

Heavy traffic, water shortages, and rising property prices have led to online speculation that Bengaluru may be crumbling and debates about whether another city will emerge as a new tech hub in India. During a water crisis earlier this year, some tech companies in Bengaluru had to tell employees to stay home.

Business Insider spoke to four current and former Bengaluru residents in and outside the tech industry who shared their experiences of how India's "Silicon Valley" is holding up under the pressures of rapid urbanization and whether they believe it can maintain its place as a global tech hub.

Vikram Chandrashekar

Vikram Chandrashekar, 50, was born in Bengaluru and has worked at Oracle for the past 27 years. He told BI he is happy for the job opportunities Bengaluru's status as a tech hub has brought, but is nostalgic for the city of his youth.

A lake he visited when he was younger, across from a guava and mango orchard, has now been replaced by housing.

Chandrashekar said the IT boom drew people to the city, bringing a larger airport, a more diverse culture, and better internet connectivity. He is also grateful to the startup ecosystem because he has access to new services and products faster than the rest of the country.

He said local people have benefited from job opportunities, but they still complain about the issues urbanization has caused. Chandrashekar doesn't plan to leave his hometown and thinks creating other tech hubs in India to redirect the growing population is a solution.

Read Vikram Chandrashekar's full story here.

Dhruv Suyamprakasam

Dhruv Suyamprakasam grew up joining his dad on business trips to Bengaluru and Hyderabad, another large tech hub in India. When Suyamprakasam became a founder himself, he moved to Bengaluru twice.

However, the founder said the city wasn't a golden ticket to success, and Suyamprakasam decided it was better to build his startup in his local city.

Suyamprakasam first moved to Bengaluru in 2010 after launching a medical startup with his relative.

It turned out to be a mistake. Suyamprakasam said Bengaluru's tech ecosystem's "fail-fast" mentality put too much pressure on their medical startup. He also felt excluded for being from a smaller city, not speaking Hindi, or not having studied at India's top engineering school.

Suyamprakasam said access to talent and venture capital are huge advantages of Bengaluru, while smaller cities can offer lower costs and more space.

Still, Bengaluru doesn't compare to Silicon Valley's vast capital and power. The founder said Bengaluru can be great on its own merits, but it needs to start being more inclusive.

Read Dhruv Suyamprakasam's full story here.

Batool Fatima

Batool Fatima, 50, moved to Bengaluru nearly 25 years ago from Hyderabad. Like Chandrashekar, the founder of a local nonprofit organization saw the city known for greenery and lakes change before her eyes.

Fatima said she is concerned that the city may not be able to support further population growth and that residents must work on improving the city's problems.

She said more intellectuals and non-tech workers have moved to Bengaluru which has been beneficial. But there have been reports of tensions between locals and immigrants who don't speak the language.

The influx of people has also caused environmental strains, including a recent water crisis. Fatima said the shortage disproportionality impacted high-rise buildings, a telling example of the lack of planning around urban growth.

The philanthropist said she wanted companies to invest in solutions to protect Bengaluru's natural resources, like funding wetland wildlife reserves. She also said community action, like residents collecting stormwater drainage, is more helpful than complaining about the government.

Fatima said developing nearby suburbs could reduce the strain on the city's center and allow the tech hub to continue to thrive.

Read Batool Fatima's full story here.

Spencer Schneier

Spencer Schneier is from New York, but spends half his year in Bengaluru and the other half in San Francisco running a tech startup.

The pandemic opened Schenier's eyes to the idea of leaving the US. In 2020, Schneier worked with two Indian cofounders and joined them on a trip to Mumbai and Bengaluru. While traveling, he decided to launch a startup from Bengaluru to help businesses expand overseas.

Schneier told BI he chose the city because it gave him access to customers, other founders, and small businesses to learn from. He said the Indian startup ecosystem was more conservative than the US, but the next generation of investors is really promising.

Now Schneier spends half his time in San Francisco and half in Bengaluru. He loves the Indian city's moderate climate and generosity. The tech CEO said he struggles with traffic and bureaucracy in the city, but feels he is part of a larger trend of people moving to India to start businesses.

Schneier told BI he believes the appeal of Bengaluru's talent density and local generosity will gain popularity.

Read Spencer Schneier's full story here.

In the tussle between economic growth and sustainability, can Bengaluru have it all?

Bengaluru has undergone significant changes in its transition from a serene "Garden City" to the Silicon Valley of India. Residents said the rapid urbanization has brought both opportunities and challenges.

The opportunities — a booming tech and startup industry, jobs, and diversity — draw people to the city and keep locals living there. But residents BI spoke to are keenly aware of the tradeoffs, pointing to environmental degradation, rising costs of living, and traffic.

The tension between Bengaluru's growth as a tech hub and the cost for its inhabitants lies at the heart of the city's future.

Harini Nagendra, a professor at Azim Premji University in Bengaluru, said, "There's a city which is growing, and there's obviously the economic prosperity it brings, but there's also the ecological degradation that you see everywhere."

Nagendra echoed Batool Fatima's suggestion of a collaborative solution with companies and residents maintaining their local environments.

Narendar Pani, an economics professor at the National Institute of Advanced Studies in Bengaluru, said the city's growth also hinges on education – better education in urban planning and the ongoing strength of city's educational institutions.

"When people look at Bangalore's future, they think about roads and water," he said. "Water is important, but I think more than the roads, a much more critical element is education."

He, like other residents who spoke to BI, expressed a cautious hopefulness that Bengaluru would solve its problems and continue to grow.

"I belong here, so I would like to think the ideas will come," he said.