Cities as brands

Cities as brands
Those that do best get the better investment opportunities. Leaders must chew on this

Shekhar Gupta, The Indian Express

Banglore's declining status in the Gartner study on hot IT investment destinations in India holds important lessons, not just for Karnataka’s capital but for other cities in India. It has long been obvious that the quality of life and infrastructure that cities offer drive their investment patterns. But Indian cities need to wake up to the fact that the brand appeal of a city is measured in relation to that of its rivals. Inter-city competition is increasingly becoming a central fact of modern economic life. Like in most other aspects of economic activity, this competition ought to prod state governments to improve the quality of their urban agglomerations. This truth is slowly trickling down and even a city like Kolkata, that had often been described as “dying”, seems to have woken up to the need for better infrastructure and urban governance. It is, therefore, ironical that a city that was once at the cutting edge of the knowledge economy is in sleep mode, even as competitors like Chennai, Pune and Hyderabad get ahead.

But Indian cities have to ensure that investors come, not simply because they have nowhere else to go and in order to take advantage of India’s labour costs. Such investment will reach its limits fairly rapidly — as Bangalore is finding out. There are two paradoxes associated with the partial success of cities. The first paradox is that their initial success can sometimes depend upon their past failures. So that cities that are cheap, which by implication implies that volumes of investment are low, become — other things being equal — attractive for a while. But this kind of attractiveness is very short-lived. Cities have to learn to build on their success rather than crumble under its weight. Second, it has to be admitted that successful cities sometimes have to bear the consequences of the failures of other cities. Since there are very few urban centres that are really attractive, the burden of carrying along the rest of the country falls on them. These cities come to be too rapidly overburdened with the demands of investors and migrants alike. Consequently, their success gets converted to failure more easily. This suggests that the simultaneous development of a number of cities is as important as inter-city rivalry.

But the biggest lesson is that our politics is completely out of tune with the demands of flourishing cities. Urban India’s administrative, governance, financial and accountability structures are ill adapted to the demands placed on them. As the unconscionably state of denial displayed by the Karnataka chief minister, Dharam Singh, and his political ally, former prime minister H.D. Deve Gowda, has shown, our politicians are more interested in defending their turf than in enhancing the brand names of the cities whose fortunes they preside over.