What Detroit can learn from Bangalore: a booming city's lessons for a town in decline.

Author:Dalmia, Shikha

K.G. NANJAPPA, the mustachioed, 35ish driver I hired for my five-day stay in Bangalore, was not given to many opinions. But there was one thing this soft-spoken, diminutive man was certain of: "It is bery good thing I.T. companies here, madam."

Yes, he admitted, the influx of information technology companies into this South Indian city of nearly 6 million people had made his job more stressful. The sudden burst in traffic had cratered the streets faster than municipal authorities could say "pothole." (Bangalore residents joke that while elsewhere people drive on the left of the road, they drive on what's left of the road.) Commute times had quadrupled, and road rage was on the rise.

But just a few years after Nanjappa and his family had moved from a nearby village to Bangalore, his base salary had doubled from 860 to $120 a month. In addition, he routinely took in as much as $60 a month in tips, putting his income in a range he had scarcely imagined possible.

It's not that he doesn't miss his old village life, he explained. But by carefully managing his finances, he can send his daughter to a private school while planning for a second child. All of this, he maintains, is well worth trading the simple pleasures of his bucolic past life for the hassles of his new, grungy city existence.

Evidently, Nanjappa is not the only one who feels this way: Every week, nearly 3,700 new people from all over India--from high-tech professionals to semi-skilled service staff--vote with their feet by moving to Bangalore, the I.T. and outsourcing capital of the East. A fraction of them, as we'll see, were driven from their homes by a land-grabbing government, but the vast majority are simply pursuing the city's many opportunities. Even skilled expatriates from Australia, California, and Europe are returning, undeterred by Bangalore's ubiquitous poverty, squalor, and chaos after years of life in plush, clean, and orderly surroundings. The city's population has ballooned from just 1 million residents in 1960, giving Bangalore a 5.7 percent annual rate of growth that has made it one of the fastest-growing cities not just in India but in all of Southeast Asia. There are signs this influx is beginning to slow, due to the city's dismal infrastructure. For now, however, it has injected new energy into a town that was once so dull that Winston Churchill compared it to a prison.

Giant multinationals such as Microsoft, Intel, and Dell are cramming the city with glittering new glass-and-steel buildings. Every inch of real estate in the city proper has been spoken for, pushing Indian computer behemoths such as Infosys and Wipro to erect their sprawling, lush, and unabashedly opulent campuses on the outskirts. Hotels ranging from the sumptuously luxurious five-star Leela Palace to the low-budget Woodlands run at full capacity. Trendy little boutiques and high-rise malls selling everything from ethnic wares to Western goods are everywhere. New restaurants featuring Italian and Thai food are challenging the culinary domination of traditional Indian restaurants.

When I return home to the Detroit area, where I have lived for the last 18 years, the contrast couldn't be starker.

To be sure, Detroit has many of the trappings of wealth that come from sitting in the lap of the richest country in the world: an excellent freeway system, a sparkling riverfront, good sanitation. Bangalore, in turn, has many of the afflictions of a poor country: pollution, open sewers, slums. But there is a palpable buzz in Bangalore's air that comes when industrious people are engaged in creating wealth. That's missing in Detroit, where a big chunk of the population lives off welfare.

While Bangalore grows, Detroit continues to lead the United States in population decline. Every week, on average, 370 residents leave its crime-ridden, economically depressed neighborhoods for a better life in the suburbs or elsewhere in the country. The city's population, close to 2 million in the late 1950s, has shrunk to less than 900,000. Formerly the fifth largest city in the country--bigger even than Chicago--Detroit is now smaller than San Jose.

This is not to deny that some economic movement has occurred in Detroit in the last decade: The city in February pulled off the Super Bowl at the new state-of-art Ford Field Stadium without a hitch--no mean feat given that, until a few years ago, it could not even plow its streets after an evening snowstorm for kids to walk to school in the morning. General Motors has sunk $500 million to renovate the Renaissance Center, a complex of glass office towers that sat nearly vacant on the Detroit River for about two decades. In part due to generous tax subsidies, Detroit got its first significant new office building in a decade with the opening of the Compuware Center. Three new casinos have opened, including one in the thriving Greek Town area one of Detroit's few bright spots, where pedestrians actually can walk at night without fearing for their lives. And in a burst of government largesse, some old rococo gems such as the Fox Theater and Detroit Opera House have been restored, along with Campus Martius, once the busiest public square in America.

But these grand projects haven't jump-started Detroit's economic engine. While stores like Esprit, Nike, and Adidas open showrooms by the dozen in Bangalore, not a single major national retailer has expressed interest in Detroit since the closing of Hudson's department store in 1982. The opening of a Ben & Jerry's ice cream parlor in the Compuware building last year was cause for celebration.

In fact, Detroit's landscape has barely changed since I first peered out the window of a friend's upper-floor apartment at Wayne State University in 1987, into a hauntingly beautiful abandoned building across the street. Its rooms were stripped bare, every piece of cabinetry likely sold for firewood by local junkies. And its brick facade was marred by row after row of shattered windows like a lovely face ravaged by pockmarks.

Entire blocks of such buildings have been razed in recent years. But with few new investors stepping forward to redevelop the sites, many have reverted to urban prairies. The 10,000 or so abandoned buildings that have escaped the bulldozers serve as both a reminder of the city's lost glory and a taunt to its hopes of a renaissance.

Bangalore, a Third World city beginning with nothing, has experienced meteoric economic growth, while Detroit, once a formidable industrial powerhouse, can't crawl out of its economic rut. If Detroit wants to boom again, it could learn some lessons from Bangalore. The factors that made India the world's economic basket case after it obtained its independence from Britain in 1947 are precisely what have stymied Detroit's resurgence: excessive bureaucracy, destructive taxes, and bad labor laws. While India has yet to address the last, it has attacked regulations and taxes with a vengeance, with results Detroit's...

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