Learning From Bangalore: Lessons For Declining U.S. Cities

"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...

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 leaders should note.

Bangalore has also made an important mistake. By favoring the I.T. industry with measures that range from preferential tax treatment to outright land grabs it has created a town too dependent on a single industry. In that respect, it could learn a sobering lesson from Detroit’s sad decline."