The inner city of India’s newest business metropolis is similar to many on the subcontinent: A churning, honking, clanging mass of people, cars, rickshaws and feral hounds.
But heading northwest of the bustling downtown, the scenery changes dramatically. Gritty repair shops and choked intersections fade into high-end fashion stores, mansions, parks and promenades, before an entirely different world emerges: “Cyberabad,” a district of massive modern buildings that house some of the biggest names in technology and pharmaceuticals, from Google and Dell to Novartis, not to mention India’s largest infrastructure companies.
The information-technology hub of Bangalore has for years symbolized the “new” India of outsourcing and call-centres. But Hyderabad has gradually entered the global business consciousness as Bangalore’s infrastructure ages, the city grows more congested and it begins to show the strains after years of success. Indeed, in the time since former president George W. Bush visited Hyderabad in 2006 and skipped Bangalore – in a slight heard ’round India’s boardrooms – the city has become an integral economic engine for the populous state of Andhra Pradesh and a focal point for India’s new economy.
Even as it grapples with a bout of political turmoil, the city has grown to anchor a triangle of regional heavyweights in high technology and manufacturing that also includes Bangalore and Chennai. Hyderabad, and satellite-city technology hubs on the outside of major urban areas like New Delhi’s Gurgaon, are key foundations to India’s move up the value chain. The country is shifting from being a hotbed of tech outsourcing to one which nurtures homegrown giants and lures global businesses keen to tap India’s professional work force.
“Life is finer in Hyderabad – Bangalore is too crowded, and people are finding Hyderabad to be a better option,” says Satish Devaragudi, the manager of Scotiabank’s Hyderbad branch, the bank’s newest location in India. “Hyderabad is still cheaper in terms of commercial space, in terms of the cost of living.”
Hyderabad’s march to success – which has made the city a beacon for other urban areas across India – is the result of the bold vision of Chandrababu Naidu, the top politician of Andhra Pradesh state. Taking power in the mid-90s, the entrepreneur set about making Hyderabad a hub for big business. This was no easy task in India, a country where red tape and lethargic bureaucracies are the norm. He sold land quickly and cheaply; promised an uninterrupted power supply; provided top-rate digital infrastructure; and plowed significant government resources into wooing companies to Hyderabad.
T. Hanuman Chowdary, who was Mr. Naidu’s adviser for IT, remembers the chief minister took the mission very seriously. “He did a marvellous job,” says Mr. Chowdary, who now runs a telecom think tank and works for Tata Consultancy Services. He notes that the minister took the mission extremely seriously, but also quite personally, often intervening himself: Once, Mr. Naidu launched into an hours-long Power Point presentation to Microsoft founder Bill Gates in order to convince him that the company’s first R&D centre outside Redmond should be here.
“Hyderabad was pretty strong in their pitch,” says Amit Chatterjee, the head of Microsoft India’s 1,600-person strong R&D division in Hyderabad. “They were clearly very eager.”
Mr. Chatterjee, who was born in India and went to school near Kolkata before working for Microsoft in the United States, has been in Hyderabad for the past 12 years, and praises the cosmopolitan nature of the city. It has changed dramatically since he arrived, with infrastructure improving along with telecommunications links and connectivity. The city also has a new, gleaming airport that is connected to the city by a quick, functional flyover. Mr. Chatterjee notes that when employees fly in, they can be at Microsoft’s office in around 30 or 40 minutes, whereas in more congested Bangalore a similar trip could take around two hours.
There is also an abundance of land: For every huge corporate complex in “Cyberabad”, or Hi-Tec City as it’s also known, there seems to be at least one more under construction.
Ashwin Joshi, who is the executive director of York University’s Schulich MBA program in Mumbai, is going to help relocate their temporary campus down to Hyderabad once expected legislative changes allow foreign schools to grant degrees on Indian soil. For their new building, Schulich is planning to use the same infrastructure firm – the GMR Group – that built Hyderabad’s award-winning airport.
His institution will be in good company, as well: Hyderabad is already home base for the Indian School of Business, which for four years in a row has placed within the Top 20 of the Financial Times’ global MBA rankings, and is already expanding to new locations outside the city.
Hyderabad “is the only city in India where infrastructure is actually ahead of demand,” Mr. Joshi says. “In terms of infrastructure, Bangalore is a generation behind.”
But Hyderabad is also in the middle of Andhra Pradesh, a state grappling with divisive, factional politics, which some locals say has pushed corporations eyeing big projects there into a state of wait-and-see. Mr. Naidu, the visionary, was defeated in 2004 by a candidate who courted rural disenfranchised areas angry with the focus on technology and urban growth. But in September of 2009, the new chief minister, Y.S. Rajasekhara Reddy, died in a helicopter crash, leaving a power vacuum into which a separatist movement has crawled – arguing vociferously for a separate state of Telangana, which would include Hyderabad, in a debate that is being taken very seriously to the north in Delhi.
“Because of this volatile situation, investments have slowed down in the recent past,” Mr. Devaragudi says. “But once this is past, I’m sure Hyderabad will once again take on a steep growth path.”
–Agencies