Technology start-ups are also seen as important sources of innovation, efficiency, growth, and employment, contributing, through the launch of new products or services, to the competitiveness of a country. The emergence of a unique entrepreneurial ecosystem that supports and encourages start-ups in technology is an important factor for port-of-port technology start-ups in the region.

Over the years, Bengaluru has received many nicknames. It was named the ‘Baked Beans City’ (Bendakaluru), the ‘Garden City of India’, the ‘Silicon Valley of India’, and now, the ‘Global Hub of Technology Start-ups’ is the new name.

Bengaluru now ranks as the city with the highest growth index for start-up hubs, thanks to a rising number of technology firms, led by London and Tel Aviv. Outside of the United States, the city is one of nine ‘International Start-up Hubs.’ It was named among the top twenty cities in 2015 to have the best start-up eco-system in the world.

Though Bengaluru is proud of these accolades, have you ever wondered how Bengaluru emerged in India as a global hub of technology start-ups?

Tracing the roots

Bengaluru the 'Silicon Valley of India

Bengaluru did not emerge overnight as a technology center. The study points out that the foundation for the emergence of Bengaluru’s entrepreneurial ecosystem has been laid by a combination of factors such as policy action and positive response from market forces over a period of more than half a century.

“Immediately after India’s independence in 1947, by establishing many Public Sector Units (PSUs) such as Hindustan Aeronautics Limited (HAL), Indian Telephone Industries (ITI) and Hindustan Machine Tools, policymakers promoted Bengaluru as a “new industrial city (HMT). This was accompanied by the development of industrial estates as part of a national strategy aimed at supporting small and medium-sized enterprises and promoting the subcontracting relationship between small and large enterprises.

A large number of educational and research institutions are also located in Bengaluru and play a major role in supporting and promoting the ecosystem. These institutions can be attributed to the vast entrepreneurial and workforce talent available in the region, says the report. In addition, as early adopters of the goods and services provided by technology start-ups, these institutes provide mentorship and occasional business support.

Some institutions, such as the Indian Institute of Science (IISc), the Bangalore Indian Institute of Management (IIMB), the Institute of Bioinformatics and Applied Biotechnology (IBAB) and the National Center for Biological Sciences (NCBS), have their own Technology Business Incubators (TBIs) to promote entrepreneurship, particularly among their own potential graduates.

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A slew of IT-based Multi-National Companies began pouring into Bengaluru after Texas Instruments entered Bengaluru in 1984. The 1990s biotechnology (BT) boom that began in the city helped Bengaluru become home to a vast array of biotechnology companies. Many of these IT and BT companies have started their Research and Development (R&D) centers over the course of time to take advantage of the simple accessibility and high-quality R&D workforce, thereby helping the economy.

As the number of technology-based industries increased, policymakers began to use experience effectively to establish an environment that could promote the emergence, sustainability, and growth of start-up technology, bringing Bengaluru to its present state.

Entrepreneurial ecosystem emergence

Entrepreneurial ecosystem emergence

Constructing an entrepreneurial environment takes a lot. Structurally, the foundation of the ecosystem ought to be a ‘core’ composed of entrepreneurs or prospective entrepreneurs. Then there are core components such as domestic and international private companies, educational and research institutions, industry and infrastructure government funding, financiers, accelerator and business incubator nurturers, technology, and business mentors. This is complemented by secondary variables such as an exclusive marketing strategy for start-ups, favorable weather conditions, positive media, and community.

In terms of individuals, organizations, and cultures, habitats shift from time to time,” remarks Prof. BalaSubrahmanya.” ‘Entrepreneurial organizations such as venture capitalists, business angels, banks and supporting entities such as universities, public sector agencies, financial institutions, and other business processes meet formally and informally to link, mediate and regulate performance in the local entrepreneurial climate,’ he adds, explaining how an entrepreneurial ecosystem develops.

As a crucial factor in building the environment, the study recognizes government funding. For example, in 1997, Karnataka was the first state to have an Information Technology Policy that heralded the IT sector’s growth. With the emphasis now shifting on start-ups, the Karnataka government has recently launched an exclusive ‘Karnataka Start-up Policy’ aimed at making it simple, smooth, and fast to register technology start-ups.

The good weather of Bengaluru throughout the year adds another brownie spot for everyone to like the area. It is also an added bonus to the culture of promoting a regional entrepreneurial ecosystem that can cultivate and encourage start-ups.

But without the requisite mentorship and guidance, not many start-ups are successful. There is no dearth of mentors in Bengaluru, thanks to the ‘import’ of start-up founders from all over the world. The study notes that most of these mentors are either young people trained abroad or veterans of the industry or former start-up founders. They may not be averse to experimentation or risk-taking with their diverse backgrounds and broader foreign exposure. There are also numerous start-up clubs and programs that enable prospective entrepreneurs to recognize entrepreneurial prerequisites.

This support structure has played a key role in the acquisition of a seed fund for entrepreneurial projects several times.

The city’s broad and diversified user base provides ample space for customer testing of new products/services as well. In Bengaluru, there is a large user base for every new online service, whether it is for cleaning up your house or grooming a pet. In reality, it is this diverse and moderately mature client base that attracts so many enthusiastic entrepreneurs to start here, supporting their start-ups’ life cycle.