Tehelka Magazine, Vol 6, Issue 30, Dated August 01, 2009
|BUSINESS & ECONOMY
‘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.
25 percent of start-ups in Silicon
Valley were founded by immigrants
From 1995-2005, 52 percent of
them were founded by Indians
Of the Indian entrepreneurs who
founded companies in the US, only
15 percent are from IITs
In 2005, IT companies founded
by immigrants generated
$52 billion in revenue and
employed 450,000 people
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.
|In Silicon Valley, we have risen above religious
and ethnic divides, assimilated ourselves in
the mainstream and 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
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.