‘In Today’s Economy India Needs To Compete At All Levels’

IT entrepreneurs remain one of India’s top exports Vivek Wadhwa tells MATEEN SYED

Vivek Wadhwa is a strong proponent of entrepreneurship and is most vocal on the influence and impact of immigrant entrepreneurs in the US, especially in the hightech bastion of Silicon Valley. He reiterates that the continued success of the US is, in part, directly proportional to the policies and the conducive environment extended to the skilled immigrant workforce. As an entrepreneur and a research academic his work and word carries weight. His research, done with Anna Lee Saxenian, the Dean of iSchool at UC Berkeley, is widely referenced. Born in Delhi to an Indian Foreign Service officer, Vivek lived in Australia for a decade before moving to New York for higher studies. He worked his way up the ranks; starting as a programmer at Xerox and investment bank First Boston before moving to North Carolina to co-found his first company which went IPO and was later acquired. Saving his second company, through the roller coaster ride of the dot.com bust, took a toll on Vivek’s health and compelled him to direct his entrepreneurial passion towards academia. Widely quoted in major publications and a frequent guest on premier channels, Vivek is the Associate Director at the Center for Entrepreneurship and Research Commercialization at Duke University. He is also a senior research associate at Harvard University and a visiting scholar at UC Berkeley.

Tell us about your research on the contributions of immigrant entrepreneurs in the US.
Anna Lee Saxenian had done a study in the late 90s on the influence of immigrant entrepreneurs on the US economy. She looked primarily at two high-tech regions – Route 128, near Boston, and Silicon Valley. Over twenty years ago, both regions were spoken of in the same breath, in terms of research and the commercialization of IT products, but a decade or so later Silicon Valley had zoomed past Route 128. A detailed analysis showed that highskilled immigrants were a contributing factor to the entrepreneurial successes of Silicon Valley. In the 80s and 90s, immigrants founded a quarter of the companies and of these Chinese outnumbered Indians two to one.

How did your personal involvement add to the analysis?
I joined the effort to update the research in 2006 and looked at the data using similar methodologies. What I found was absolutely mind-blowing; the trend that had started in Silicon Valley had become a nationwide phenomenon. From 1995 to 2005, 25 percent of the start-ups were founded by immigrants. Indians outnumbered the next four groups combined, even outstripping the Chinese. In Silicon Valley, 52 percent of the startups were founded by Indians. It was amazing to see immigrants’ entrepreneurial contributions across all regions where technology activity was high.

What made Indians succeed in such numbers especially in Silicon Valley?
This is where my current research is focused. It can’t be a miracle that the Indian community in Silicon Valley is churning out entrepreneurs. And it can’t be the influence of Silicon Valley alone. Russians are the third largest immigrant group here and they are not amongst the top ten entrepreneurial groups – it’s got to be something more. My hypothesis is: networking and entrepre neurshipfostering organizations, like TiE (The Indus Entrepreneurs) provide an ecosystem of support to emerging entrepreneurs.

You attribute your own entrepreneurial success in part to TiE?
I have to give you a little history. In my career graph I had moved up the ranks and became the VP of a technology group at First Boston. We built very advanced technology in the late 80s and IBM came and invested in the group, which was spun off into a new entity called Seer Technologies where I was the co-founder and CTO. We grew from $0 to $120 million in five years and took the company public. It was later acquired and I left after some time. Mind you, this company was started in the Research Park Triangle area of North Carolina. After that success, I had access to the CEOs of many top IT companies in the US. When the time came to start my second company, not one venture capitalist in the local tech region showed interest. I was surprised and disillusioned. Had I been in Silicon Valley, I would have been flooded with investment offers. That’s when I learned about TiE and helped form its local chapter. I met accomplished individuals through TiE who were instrumental in encouraging, supporting and mentoring me for my next company. So my take is that organizations like TiE are microcosms fostering entrepreneurship amongst immigrants, just as Silicon Valley is for the whole US and the world.

Could this model of Silicon Valley be replicated in India?
As a culture, we were influenced greatly by the British. We were divided on religious, ethnic and caste lines and we learnt to suspect, despise and undercut each other. But in Silicon Valley we have risen above that and assimilated ourselves in the mainstream and we are reaping the benefits.

Credit for Indian successes in the US is also given to India’s educational institutions like the IITs. As an academic, do you see this influence in Indian students coming to US universities for higher studies?
In our study, we found that among Indian entrepreneurs who founded companies in the US, only 15 percent were from the IITs. When you compare the total number of IIT graduates to the total output of all engineering graduates in India, this is proportionally higher. But 85 percent of the founders are from other Indian institutions. So India’s technical education does play a role and it is spread across the country in different universities. Students who come here to universities of high repute are generally among the top in India. In today’s global economy, India needs to compete at all levels. And to harness its young workforce it needs to continue to improve its educational system in spite of all its politics.

The current economic crisis is adding to the growing calls for limiting skilled immigration to the US. Could this be a hindrance to the long-term economic prosperity?
In the last two decades, immigrant entrepreneurs have contributed greatly. 24 percent of patents filed with the World Intellectual Property Organization were filed by immigrants. We found that in 2005, technology companies founded by immigrants generated $52 billion in revenue and employed 450,000 people. The number of jobs generated by these companies far exceeded the number of immigrants allowed into the country in the same ten-year period, not to mention the extent to which they fueled the economy. The fact that we have 25 percent more start-ups than we may otherwise have had is hugely important for US economic growth and for our global competitive advantage.

WRITER’S EMAIL
mateen.syed@yahoo.com