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How India went from Brain Drain to Brain Gain

Waves of science, engineering and IT graduates came to study in America and then spread business success to Silicon Valley and India.
BY Uttara Choudhury |   21-11-2015

AnnaLee Saxenian, Dean of the UC Berkeley School of Information, says engineers who came to Silicon Valley
from India and China are creating business networks and
seeding their home countries.

We’re all familiar with the wave of science, engineering and information technology graduates that flowed from India to Silicon Valley in recent decades. You can't blame the Indian government for bemoaning the migration of so many of its highly motivated and talented young people to America. But now it can draw comfort from new findings which show that Indian students who crossed the Atlantic to study have given back by starting companies and creating high-paying technology jobs in India. 

AnnaLee Saxenian, Dean of the University of California BerkeleySchool of Information, known widely for her work on technology clusters and social networks in Silicon Valley, said that what was once a "brain drain," has now become “brain circulation” — a powerful economic force that is sparking changes in the economy.

According to her, engineers who came to Silicon Valley from India, China, Taiwan and Israel are creating business networks, seeding their home countries; changing the traditional landscape of innovation and allowing Silicon Valley to deepen its managerial and technical know-how. 

“In the 1980s, the dilemma of the new PhDs from Stanford or Berkeley was that there were no jobs at home for them. Their families wanted them home, but if you have a PhD in integrated circuit design there were no opportunities in China or India,” said Saxenian, who has documented her findings in her book "The New Argonauts." 

“So they began creating opportunities for themselves and their colleagues back in their home countries. That’s who the new Argonauts are: they are people who are able to scan the environment and recognize opportunities that they are uniquely positioned to exploit,” added the professor. 

Bridging the Distance

There's been a steady drumbeat of IIT graduates from India coming to study engineering in America. They have gone on to get degrees from Stanford, MIT, Virginia Tech, Purdue, Yale, Duke, Harvard, Princeton, UC Berkley, Georgia Tech, Carnegie Mellon, Caltech and many other elite U.S. engineering schools. These highly trained and well educated engineers, have then started businesses in both India and America. The Indus Entrepreneurs (TIE) claims 8,000 members, among them people who have launched 300 U.S. and India-based firms that do business in both countries. 

Multi-millionaire Hotmail co-founder Sabeer Bhatia
has been a blowtorch for spreading business success to
Silicon Valley and India.

Sabeer Bhatia at 19 moved to California with $250 in his pocket and a head full of ideas. He won a scholarship to the California Institute of Technology (Caltech) when he was tested in math, physics and chemistry. He later studied electrical engineering at Stanford University but left soon to join Apple Computer. At the age of 27, Bhatia created Hotmail with his college friend and colleague Jack Smith and sold the webmail startup to Microsoft for a tidy sum of $400 million. Since then all Bhatia's businesses have had offices in India. AMP Technologies is headquartered in California and has its corporate office in Chennai

Bhatia and many thousands of Indian immigrants with strong ties to the US and India are storming back to home to cultivate business and cut deals. With a billion plus population, a rising wave of consumers and high octane economic growth, India holds strong promise. 

"Brick by brick, we are building an 8,000-mile bridge between the U.S. and India," says Navneet Chugh, an attorney and founder of the Chugh Firm in Los Angeles. 

Chug gives generously to charities in India and has business ties with the country. He came to Los Angeles over three decades ago to get an MBA from the University of Southern California before starting his law firm. 

SlashSupport founder Shiva Ramani, Vinod Dham who rose to fame as the "Father of the Pentium Chip," and tech entrepreneur P.V Kannan see India as a talent gold mine and have rapidly expanded their India operations. 

Talking Real Money

According to reports, venture capital firms and private investors, a large number of them wealthy Indian Americans, poured $3.2 billion into 150 start-ups in India last year. 

“These are highly educated, well-connected people. They know how to talk to government officials. They know how to talk to bankers. They know how to make things happen,” said Saxenian. 

Indian immigrants created nearly 10 percent of the 4,000 firms launched from 1995 to 2000 in Silicon Valley, according to Saxenian. The numbers have now shot up. Interestingly, Saxenian has pointed out that Indian engineers created their own start-ups a decade ago because US investors "treated them as outsiders" who lacked leadership skills to head up teams or run companies. Today, there is a sea-change, observes Saxenian with U.S. venture capital firms actively seeking Indians to run start-ups and to make business contacts in India. 

Stanford educated Google CEO Sundar Pichai is the latest Indian-born executive to reach the top ranks in corporate America, where he joins Microsoft CEO Satya Nadella, PepsiCo CEO Indra Nooyi, MasterCard CEO Ajay Banga, Nokia CEO Rajeev Suri, SoftBank Corp. CEO Nikesh Arora, SanDisk CEO Sanjay Mehrotra and Adobe Systems CEO Shantanu Narayen, among others. 

Indian leaders also attribute part of their success to the skills and connections they gained through working and studying abroad. Infosys, Reliance Industries, the Mahindra Group and India’s largest conglomerate the Tata group, have all benefited from having executives who have spent time studying overseas. 

Uttara Choudhury is Editor, North America for TV 18’s Firstpost news site and a writer for Forbes India. In 1997, she went on the British Chevening Scholarship to study Journalism in the University of Westminster, in London.

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