The rise of business opportunities in Tier 2 & Tier 3 cities in India, and its implications for office design | United Workplace
15.08.2019

It is a tale that plays out often enough — a bright, young student grows up in a small town in India, works hard in school and excels academically. With sparkling ambitions and an impressive report card, moving to the nearest metro city is the next logical step. Life in their hometown may be idyllic, but the academic and career opportunities of a big city are too good to pass up. And so they make the move.

Today, this old trajectory often sees a reversal — after living in metro cities for a couple of years, many millennials are moving back home. Tier 2 and tier 3 cities in India are emerging as business hubs, opening up fantastic job opportunities. Thanks to technological advancement, smaller towns are rapidly catching up with the metros in terms of convenience and quality of life. Now, one does not necessarily need to shift to a bigger city in order to fulfil their dreams.

Exploring the reasons for this business boom:

For startups

Prohibitive rents and high operational costs in a metro can be massive deterrents for those just setting up a new business. In comparison, startups find that these initial costs are much lower, skilled personnel more affordable, and local authorities a lot friendlier in tier 2 and tier 3 cities. The new availability of coworking spaces in smaller towns makes it even easier for startups to function without a heavy initial investment.

Moreover, in recent years, the government has put a sharper focus on funding incubators and supporting innovation. Programmes like Startup Chhattisgarh and Kerala Startup Mission have set the momentum going for entrepreneurs in smaller Indian cities.

For multi-national firms

In recent years, tier 2 cities like Jaipur, Patna, Indore and Surat have recorded an economic growth rate of over 40%, making them attractive options for larger firms. Setting up operations here bring financial advantage at multiple levels. Larger spaces are available at lower costs, which enable these firms to operate at a bigger scale. Tier 2 and tier 3 cities also provide a vast pool of untapped talent. When properly trained, companies can enjoy a large, highly skilled workforce at a fraction of the cost compared to metro cities.

For young employees

Some millennials seek opportunities that will enable them to live closer to their families; others find that their skills are valued higher in smaller towns that are not yet saturated with talent. Financial advantage plays a huge role in this decision — the cost of living in a tier 2 or tier 3 city is considerably lower than in a metro. Those moving back in with their families can save on rent, which is a massive economic benefit for college graduates who are just starting out in their careers.

Thanks to the rise of e-commerce, delivery services and ride-sharing apps, enjoying a high standard of living has become easier than ever before — one need never feel like they’re missing out by not being in a big city.

So what are the implications of this shift on commercial office design? Read the full article from Space Matrix here!