The high population density of a city makes large-scale manufacturing enterprises less competitive, and forces them to move to rural settings
Manufacturing, which tends to be more land-intensive, and less skill-intensive, migrates to smaller cities in search of cheaper land. Photo: Pradeep Gaur/Mint
As policymakers launch new programmes to make India more competitive, accelerate growth and create jobs, cities will play a key role in this structural transformation. India is still at an early stage in this transformation, given that it is a lot less urbanized for its stage of development. The growth potential through urbanization is huge, given that India is one of the most densely populated countries in the world. The 100 smart cities programme is an effort to address this gap.
While the link between urbanization and growth has been well recognized globally, our understanding of what makes cities more competitive is still evolving. With more than 600 districts in India, and many more districts aspiring to join the ranks of 100 smart cities, a deeper understanding of the drivers of competitiveness, and providing benchmarks to measure, monitor and improve performance will help local leaders to pursue city competitiveness agenda better. We made an attempt at examining the drivers of city competitiveness (“What Makes Cities More Competitive? Spatial Determinants Of Entrepreneurship In India”) While the spatial aspects of cities need more attention, a key driver of city competitiveness is the strength of its entrepreneurial foundation and its ability to attract new enterprises.
There are several drivers of city competitiveness, including demographic traits, infrastructure traits, urban traits, financial traits and industry traits. Noida in Uttar Pradesh, with a focus on modern services, is following a different growth path, compared to Surat in Gujarat that is focused on manufacturing. There is one thing common to both. Both have a strong entrepreneurial foundation.
India’s urban transformation will take place at a 100 times faster pace than what developed countries have experienced. India is at the forefront of this global transformation. While cities raise special challenges in forming public-private partnerships in building physical and human infrastructure, they also provide a quick opportunity to accelerate growth, create jobs, and promote shared prosperity.