Chennai got metropolitan city status much before Bangalore. But that does not mean Chennai became more cosmopolitan. If you look at per capita income, Bengaluru Urban is around ₹8.93 lakh per year, while Chennai city district is estimated around ₹5.20 lakh to ₹6.46 lakh per year.
One major reason is that Chennai focused more on manufacturing, automobile, port, healthcare, education, and industrial sectors. These sectors created more jobs for middle-class and lower-middle-class people, diploma graduates, technicians, and local workers.
But Bangalore focused more on IT, software, GCCs, product companies, and the startup ecosystem. These sectors created more high-paying jobs for graduates from IITs, NITs, BITS, IIITs, design schools, and MBA colleges. Because of that, people from all over India moved to Bangalore.
Another big reason is product companies. Bangalore has more companies like Google, Microsoft, Amazon, Flipkart, SAP, Adobe, Intuit, Walmart, and many other product-based companies. When a person works in these companies for 5 or 10 years, they build contacts, invest in the city, meet investors, and later start in the same city.
These companies also attract more people from Tier 1 colleges. When these people work inside strong product companies, they understand real customer problems, business models, product thinking, and market gaps. Later, some of them figure out new problems and start their own companies. This is similar to the PayPal Mafia or Flipkart Mafia, where employees from one successful company later become founders, investors, and leaders of many other startups.
Also, it is slightly easier for a Tier 1 college person to get investor attention compared to others, because investors usually trust strong college tags, strong company tags, and strong networks. This does not mean others cannot build successful companies, but Tier 1 networks usually give faster access to VCs, angels, and early employees.
That is how Bangalore created a strong loop: Product company employees → founders → investors → early employees → more startups
If you look at Y Combinator also, many Indian startups are started by Tier 1 college people and strong product-company people. Bangalore has almost 100 YC-backed startups, but Chennai has less than 5. That clearly shows where the product-startup ecosystem became stronger.
Chennai has IIT Madras and very good talent, but many people from IIT Madras and other top colleges still move to Bangalore because product-company and startup opportunities are much higher there.
Chennai became a metropolitan city earlier, but it lost the product-based IT race to Bangalore and Hyderabad.
-KAUSHIK