CHANGING BUSINESS TRENDS IN SOME WORLD METRO AND MEGA CITIES
The Indian Industrial cities like Mumbai earlier Bombay) are following the foot steps of London and New York the manufacturing industry is replaced by service sector. Global factors seem to be influencing the business in the same way whether they are developing nations or advanced countries.
The blurb in the commercial map of India in the 1976 edition of the Oxford School Atlas lists Bombay as home to industrialists like pharmaceuticals, textiles, chemicals, steel, automobiles, Jewellery and shipping. Bombay, bustling with activity, was one of Indiaâ€™s biggest manufacturing hubs. Today, three decades later, the blurb will have to entirely re-written, well, almost entirely.
Mumbai remains the countryâ€™s commercial centre but it is no longer the preferred choice for manufactures. A United Kingdom- based Drug-maker pulled down the shutters of one of the cityâ€™s oldest pharmaceutical factories in central Mumbai two years back. Hindustan Lever is planning to stop making soaps at Sewree. And textile units, like Morarjee and Ruby that survived the crippling workersâ€™ strikes in the 1970s, closed shop and made way for shopping malls or office complexes. Even more tellingly, there will not be a single new factory on the 600-plus acres being redeveloped in the heart of the city where textile mills once used to be.
But industry bosses find no reason to worry. Larsen & Toubro chairman sounded confident saying that Mumbai may lose its factories but not its control on them. As the economy grows, the influence it will yield on businesses will spawn services that will bring new livelihood for the city.
Government statistics say employment in manufacturing industries in the Metro zone has declined in the last two decades. But new private offices have come up in new areas with a potential to accommodate 2.5lakhs people..
The new office complexes house banks, insurance firms, software and BPO players and offices of big corporations. And over 100 new research agencies and investment firms have set up office in the business districts since foreign broking firms were allowed to do business in the Indian capital market.
So, what will constitute the â€œnew servicesâ€? economy? With the Reserve Bank of India and the two stock exchanges, Mumbai- like Singapore and Hong Kong- will continue to be the first choice destination for global financial services firms like banks, investment companies and insurance companies. Senior finance professionals, like ICICI Bank chair K V Kamath and automobile manufacturers Mahindra and Mahindra chief financial officer Bharat Doshi, who are on a committee to draw up a blueprint to turn Mumbai into a global finance hub, feel the process will gather speed when the government changes regulations allowing free convertibility of the rupee. A CEO of a reputed financial company said that Indian financial regulations are on the right track and, eventually, Mumbai has a good chance of becoming a global financial centre and that will change the cities fabric.
It may be difficult to imagine that finance alone can drive a city but examples are not hard to come by.
Big commercial capitals like London and New York have moved from manufacturing to â€œservices-ledâ€? cities. London became an important centre in the international economy on the back of a global stock market boom in the 1980s.
Its biggest industry now is finance and it is home to banks, brokers, insurers and legal and accounting firms. The London Metropolitan Area, without any big manufacturing outfits, accounted for 30% of the UKâ€™s GDP in 2004.
New York, too is riding its financial clout and its two stock markets- the New York Stock Exchange and Nasdaq- towards growth.
The N.Y.City also houses hundreds of Fortune 500 firmsâ€™ headquarters and some of the top investments firms that control trillions of dollars in funds. Over the last forty years jobs in specialized manufacturing like furniture, processed foods and garments- have declined, making place for new ones in software development, gaming design and internet services.
Besides that, both London and New York economies are amply supported by the tourism industry- New York, of course also has entertainment- and Mumbai could take a leaf out of their book by showcasing itself and bollywood.
The growth of the financial services will spawn another eco-system around it just like a big car factory attracts ancillary companies around it.
The growth in the financial services is mirrored in the real estate, retailing and entertainment sectors globally.
Experts, like London Property Review director and author of The Myth and Realities of Mumbai Office Market Geoff Marsh, agree that the Indian realty market now has good quality products compared to 1995 and new regulations to allow foreign direct investment in the industry will see it grow further.