How Mumbai's history made sure it became a centre of innovation and entrepreneurship

And how neighbouring Pune got on the map as well.

With new-generation start-ups in a wide range of technological areas, Mumbai seems to be once again demonstrating the kind of innovation and entrepreneurial spirit that led the first wave of IT in the country. It suffers from inadequate infrastructure, high costs, many years of average (at best) governance, traffic jams and long commute times and a whole host of other woes. Yet, the sheer energy of the city, its professional and businesslike culture, its huge talent pool and its global linkages make it an attractive base for innovative new ventures.

Mumbai does not have a well-known or celebrated history, unlike Delhi, for example.

The city (formerly Bombay) comprised seven distinct islands, which in ancient times were part of the kingdom of Emperor Ashoka, and later of the Silahara dynasty. The rulers of Gujarat annexed the islands in 1343. A Portuguese attempt to conquer Mahim (one of the seven islands) failed in 1507, but in 1534 Sultan Bahadur Shah, the ruler of Gujarat, ceded the islands to the Portuguese. In 1661, the Portuguese handed over the islands to the British, as ‘dowry’ for the marriage of King Charles II and Catherine of Braganza, sister of the king of Portugal.

In 1668, the Crown persuaded the East India Company to rent the islands for 10 pounds a year. At that time, the Mughals, the Marathas and the Gujarat princes were all more powerful than the East India Company. Even British naval power was not at par with that of the Portuguese, Dutch, Mughals or Marathas. However, the decay of Mughal power, the Mughal–Maratha battles and instability in Gujarat drove artisans and merchants to the islands for refuge, and Bombay began to grow.

Records indicate that in just seven years (from 1668 to 1675), the population of the city rose from 10,000 to 60,000. As a consequence of its growth, the East India Company officially transferred their headquarters from Surat to the new city called Bombay.

The industrialisation of Bombay began in 1857, with the setting up of the first spinning and weaving mill. As a result, by 1860 the city had become the largest cotton market in India. The halt of cotton supplies to Britain due to the American Civil War (1861–1865) created a great trade boom in Bombay. However, cotton prices crashed with the end of the Civil War. Nonetheless, the boom had facilitated the opening of the hinterland, and Bombay became a major centre of trade. The Suez Canal, opened in 1869, gave a big boost to trade with Britain and Europe, and resulted in growing prosperity for Bombay.

Innovation seems to be embedded in Bombay itself.

The ambitious projects to link the islands and the reclamation work are themselves innovative and imaginative efforts that have resulted in the creation of a major global city. The Hornby Vellard, linking two of the seven islands, was one of the first engineering projects to be undertaken in Mumbai. This was initiated by William Hornby, the governor of Bombay, in 1782, to prevent the flooding of low-lying areas. It was followed by a series of major civil-engineering projects involving the construction of a number of causeways. As a result, the seven islands were finally merged into one single mass in 1845.

Bombay received a further boost in 1853, when the country’s first railway connection for passengers was inaugurated between Bombay’s Bori Bunder (later renamed as Victoria Terminus, and now known as Chhatrapati Shivaji Terminus) and Thane. In fact, a few other railways are known to have operated in India prior to 1853, for hauling materials.

In 1918, an ambitious scheme for the construction of a sea-wall in Back Bay to reclaim an area of 1,300 acres (525 hectares) of land was proposed. This was completed only after World War II (1939–1945). It linked Nariman Point to Malabar Point through Netaji Subhas Chandra Bose Road (Marine Drive), the first divided highway of its kind in India.

Mumbai’s long commercial history has shaped and defined its business-like, efficient culture, exemplified by the ‘8.48 super-fast to Churchgate’. To those not familiar with the city (and as elaborated in Chapter 2), the ‘super-fast’ is a local train which, unlike the “slow” local that stops at all stations, skips many of the intermediate stations between its originating point and its terminus. The local trains are famed for their punctuality, and the “8.48” will invariably leave at 8.48 a.m.

The local trains are the lifeline of Mumbai and the ever-expanding city needs them for moving people quickly, cheaply and efficiently between work and home. Given the dependence of millions on the local trains, these have become an integral part of the culture of the city. Even outsiders quickly absorb the “8.48 syndrome”. They learn that missing a super-fast may mean riding aboard a slow local, which, even though it may depart only two minutes later, will get them to their destination fifteen minutes (or more) later. The local trains thus help create a culture where punctuality is important and time is valued, thereby contributing to the businesslike efficiency of the city.

Apart from its culture of efficiency, what adds to the city’s attractiveness for innovative entrepreneurs is the fact that it is a financial hub and a centre for private equity, venture capital and angel investors. For decades, its feature-film industry (known as Bollywood) attracted large numbers of youngsters with dreams of stardom; now, the city is also a magnet for talented youth with dreams of starting the next billion-dollar company.

Mumbai’s near-neighbour, Pune, is another incubator for start-ups.

The city has long been a major industrial hub. Like Bengaluru, it has a salubrious climate (though the summer is distinctly warmer), and was a British cantonment, leaving it with a strong legacy of the English language and a more cosmopolitan outlook. Yet, it has very strong and deep indigenous cultural roots (far more than Bengaluru) and has long been regarded as a (if not the) centre for Marathi theatre, literature and music. Over the years, Pune has become a major hub for education and possibly boasts the highest proportion of foreign students studying in Indian universities. At some point it was called the “Oxford of the East”, and it rather fancies this tag line.

While it has some similarities with Bengaluru, their patterns of early industrialisation were quite different: whereas Bengaluru boomed with public-sector enterprises, Pune was home to major foreign and Indian private-sector companies. In both cases, it was probably this technology ambience that attracted the IT industry. Today, Pune too is a large and important IT centre, though not quite in Bengaluru’s league.

It continues to be home to a large number of manufacturing companies and has emerged as a centre for the automobile industry, with manufacturing plants of Tata Motors, Volkswagen, Fiat, Mercedes Benz and General Motors. It is the home base for one of the world’s largest forging companies, Bharat Forge, and a host of other engineering companies, both Indian and foreign.

Excerpted with permission from Crooked Minds: Creating an Innovative Society, Kiran Karnik, Rupa Publications.

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