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26 small Indian cities with 8 lakh tech workforce key for innovation: Report

New Delhi: India’s technology landscape is undergoing a sweeping transformation and 26 promising cities have the potential to become the epicentre of innovation and growth, a report said on Tuesday.

This trend is fueled by a highly proficient workforce in cutting-edge digital technologies, with about 8 lakh individuals within these emerging hubs adept in the latest tech domains.

These emerging cities are witnessing a surge in digitally-skilled workforce, with over 100,000 professionals contributing to their growth, according to the report from Deloitte India and Nasscom.

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Focusing on 26 cities of high potential, the report examined five overarching pillars: talent, infrastructure, risk and regulatory environment, start-up ecosystem, and social and living environment, which are vital for establishing a flourishing technological landscape.

About 39 per cent of the country’s start ups are based in emerging cities.

“While big cities were the focus in the past, the post-pandemic era witnessed a remarkable decentralisation of work across the nation. Today, about 60 per cent of overall graduates come from smaller towns and 30 per cent of total graduates relocate to tier-1 cities seeking employment,” said Sumeet Salwan, Partner, Deloitte India.

With 60 per cent of India’s graduates in engineering, arts, and science, smaller towns are emerging as a wellspring of potential. In emerging cities, businesses enjoy a 25-30 per cent cost advantage in talent pool costs and a striking 50 per cent lower real estate rental compared with mature hubs, the report found.

Over 140 Global Capability Centres (GCCs) have found a home in these locations, highlighting the growing interest of global enterprises in these promising emerging hubs.

Beyond the cost advantage, tier-2 cities have become breeding grounds for innovation, nurturing a mutually beneficial relationship between start-ups and established corporations.

In the past decade, this dynamic ecosystem has revolutionised the sector, creating about 900,000 direct and 300,000 indirect jobs, said the report.

“As companies worldwide continue to actively revisit ways of working with an eye on optimising outcomes, costs, and talent, the opportunity and possibility to develop alternative tech hubs are now becoming extremely essential,” said Sukanya Roy, Head GCC and BPM, Nasscom.

India is expected to have a skilled talent surplus by 2030 and these hubs offer companies a compelling blend of advantages: access to a fresh, skilled talent pool, cost-effective operations, and robust infrastructure, Roy added.

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