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The Exodus of ITES and BPO Industry to Smaller Cities: Unplanned Urbanization and the Looming Disaster

Unplanned Urbanization

Image by Christop from Pixabay

Development is welcome! Chaos and Disaster is not!


In recent years, the Information Technology Enabled Services (ITES) and Business Process Outsourcing (BPO) industry has witnessed a paradigm shift, gradually shifting its focus to smaller cities, away from traditional technology hubs like Bengaluru. While this shift promises growth opportunities and economic development for smaller cities, it also raises concerns about the lack of governance and urban planning. In this article, we delve into the reasons behind this industry migration, explore the potential consequences, and analyze how it mirrors the disastrous urbanization in Bengaluru.


1. A Brief Overview of ITES and BPO Industry Expansion:


The ITES and BPO industry, which has been a significant contributor to India's economic growth, primarily concentrated in major cities due to their infrastructure, skilled workforce, and connectivity. However, escalating costs and congestion issues in these cities have fueled the industry's quest for alternative locations. Smaller cities, with untapped resources, government incentives, and lower operational costs, emerged as viable options for companies seeking expansion.


2. Selfish Reasons for ITES and BPO Industry Migration:


While the industry's motivation to transition to smaller cities may seem opportunistic, it is essential to understand the underlying dynamics. Cost optimization and reduced operational expenses are major drivers behind this shift. Companies prefer smaller cities due to lower real estate prices, decreased transportation costs, and affordable labour. Outsourcing to India provided the advantage of labour arbitrage, but the constant hunger now results in reducing costs further by moving to smaller cities or towns. Additionally, it allows organizations to diversify their operations, reducing dependency on a single location and mitigating the risks associated with natural disasters or political instability.


3. The Bengaluru Parallels - An Unplanned Urbanization Crisis:


Bengaluru, once known as the "Silicon Valley of India," experienced unprecedented growth in the IT sector, followed by massive influxes of migrants seeking employment opportunities. However, this growth was accompanied by inadequate urban planning and governance, resulting in several challenges. Rapid, unplanned urbanization led to increased pollution, traffic congestion, strained infrastructure, inadequate housing, and soaring property prices. These issues, despite Bengaluru's economic success, have hampered the overall quality of life in the city.


4. The Looming Disaster: Potential Consequences of Unchecked Growth:


The rush to smaller cities without proper governance and urban planning carries significant risks that mirror the situation in Bengaluru. While these cities may initially benefit from economic progress, they might also experience severe repercussions in the long run. Uncontrolled population growth, insufficient infrastructure, and the lack of proper waste management systems could lead to environmental degradation and compromised public health. Insufficient housing and skyrocketing property prices may displace local communities and create social imbalances. Moreover, the strain on resources might result in a decline in the quality of public services, affecting education, healthcare, and overall standard of living.


5. The Need for Proactive Urban Planning and Governance:


To prevent history from repeating itself, smaller cities undergoing ITES and BPO industry migration must prioritize proactive urban planning and effective governance. Comprehensive master plans, ensuring sustainable development, need to be in place to address infrastructure requirements, transportation management, waste management systems, and affordable housing mechanisms. Authorities must also work towards skill development programs to equip local communities with the necessary expertise, creating employment opportunities and driving self-sustained growth.


As the ITES and BPO industry flock to smaller cities, drawn by the promise of economic growth and cost-effectiveness, it is crucial to heed the lessons from Bengaluru's unchecked urbanization crisis. Understanding the selfish reasons behind this migration helps shed light on the potential consequences of uncontrolled growth in these smaller cities. By embracing proactive urban planning, investing in infrastructure, and ensuring a balance between economic progress and sustainable development, these cities can avoid the impending disaster and create a brighter and more inclusive future for all.


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