India's Best Cities For Business, 2001
Small is beautiful. Be it for work or play. That's what the fourth BT-Gallup survey of India's Best Cities for Business suggests, given that three of the top five cities are Chandigarh, Mysore, and Pune. Surprises? Mumbai is back as corporate India's top choice, and Chennai moves up as the second-best city.
In the life of a city, three years is barely a blip. But for a corporation, it could be a defining period in its competitive history. When BT-Gallup came out with its third survey of India's Best Cities for Business in 1998, the Garden City of Bangalore topped the charts. Business capital Mumbai came second, followed by Hyderabad, which had jumped from No. 12 in the previous survey. The fourth survey is revealing. The new pecking order has Mumbai right on top, Chennai as a surprise second, Chandigarh ties with Bangalore for number three, and Mysore and Pune come fifth. Delhi, on the other hand, has been on a steady decline. It was number three in our 1996 survey, slipped to the seventh place in 1998, and now stands shamed in the ninth slot.
If some of the old favourites have taken big hits, there is good reason for it. This survey didn't go by perception alone. To introduce an element of rigour to the methodology, we decided to factor in the physical infrastructure of these cities too (See The Methodology Behind The Survey). And, lo and behold, the bluff of some cities was called. Most notable? Hyderabad, whose perceptual rank of three is in stark contrast to its factual rank of 20. Similarly, while Bangalore had everybody believing it was the best city for business, its overburdened infrastructure gave it a rank of 15. The new methodology also corrected some perceptual biases. Trivandrum, Chandigarh and Mysore, for example, have better infrastructure than they are believed to.
Would the survey have produced significantly different results if the methodology hadn't been tweaked? Not really. For, perceptions about our cities have remained more or less unchanged over the last three years. On that count, Bangalore still comes on top. Mumbai stays put at No. 2, Hyderabad hangs on to its third position, and so do Chennai and Pune to their fourth and fifth ranks, respectively. So what does the yawning difference between perceptual ranks and factual ranks mean? That currently there is a huge disconnect between what businesses think a city offers and what it actually does. That sooner than later, the holes in the city's support systems will start showing up on corporate bottomlines, and rank and file. That there are better and smaller cities around that haven't been fully explored for their potential. And that the time to act may be now.
Career Concerns Move Centre-stage
Law and order continues to be the single-biggest determinant of a city's 'livability'. But guess what? There are new work-related concerns surfacing in the form of career growth and work culture. Blame it on the times. Three years ago, the thing uppermost on the minds of our respondents-CEOs, senior executives, self-employed professionals, spouses of senior executives, policymakers, and business school students-was quality of life. Therefore, any city which afforded that made it to their favourites list. This year, the CEO respondents have attached a high importance to labour-related issues. Their choice of cities is now guided by work habits. Even students voted for cities that offered better career prospects.
Why this dramatic change? Simple. The mid- and late-nineties were times when the economy was booming; it was at its peak, and stock options were yours for the asking. Flush with paper wealth, executives were more concerned about having a good time. Today, the boom has turned into gloom, techies are being benched, old economy companies that have never laid off employees are handing out pink slips, and pay cuts and not pay raise are what employees are being offered at annual appraisals. Productivity and efficiency have once again become important.
You might hate Mumbai for its sprawl and squalor, but you simply have to love it for its professionalism. Our CEOs agree. They've crowned Mumbai as the city with the best work culture, followed by Bangalore (must be 'em, the techies), and Chennai (here too). The haven of bureaucracy, Delhi, comes a distant 13. If you were a B-school student, where would you go to make a career? Once again, the first choice is Mumbai, and then Bangalore. Here's where the students differ: they say Delhi may be the third-best option. It's easy to see why Mumbai and Bangalore rule. One is a financial centre and the other, the software capital. In the case of Bangalore, its relatively good climate and small geography, add to its attraction. Whereas Mumbai has always been a place where dreams come true-India's very own Big Apple.
There's a downside to the big cities, though: their cost of living. Mumbai is perceived as the most expensive city to live in. Delhi, the second-most expensive, and Bangalore, the seventh. And it's not just one segment of the respondents saying that, but almost all of them. For instance, in the case of Mumbai, the respondents were unanimous that it is a killer, with all of them ranking it at No. 26.
The opinion is greatly divided over Bangalore. While the CEOs surveyed gave it a rank of 24, self-employed professionals put it at a friendly five and senior executives at 10. But we would like to go by what the corporate spouses are saying about the city: that it is extremely expensive (rank: 24).