Emergic: Rajesh Jain's Blog

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Silicon Valley Brain Drain

April 22nd, 2004 · No Comments

Always-On has an article by Greg Gretsch of Sigma Partners who visited India in early February:

Everything you’ve heard about how exciting and dynamic things are in India today is true: if anything, it’s understated. Politicians and labor unions who are expressing concern about U.S. call center and SI jobs going to India are focusing their energies on the wrong problem. The problem is not the inevitable transfer of certain business functions to where they can most efficiently be performed, but the migration of the entrepreneurs and experienced workers who create the companies (and the wealth) to their ancestral homelands.

We’ve all heard the stories about the quality of the Indian workforce. They’re smart, they’re well educated, and yes, compared to engineers in Silicon Valley, they’ll work for peanuts. But there are two critical pieces of human capital that India (and countries like it) lacks that Silicon Valley has in spades. The first is years of relevant experience: each new generation of technology is building on the successes and failures of the one that came before it. The second is high-tech entrepreneurs: people have worked in an industry for long enough to know how things are done and that solutions to important problems are worth some money. But there’s nothing genetic that leads these shores to produce more entrepreneurs than anywhere else.

For the last 30-plus years, the best and brightest from around the world came here. They first came here to get educated. That’s why the graduate programs at our top engineering schools are filled to overflowing with the best and brightest from India, China, Russia, and everywhere else around the world. The world’s diasporas came to the United States to get educated. And then once educated, they realized that the companies that would put all that good education to best use were companies right here in the good ol’ U.S. of A. If they happened to be in an area where companies are started as fast and furious as they are in Silicon Valley, they may have gotten the idea to try to start one themselves. They built up that critical experience, and some even became one of our most treasured natural resources: the entrepreneur who innovates, creates jobs, and creates wealth.

Now some of those people are heading home. So those bright engineers who graduate from IIT with arguably the best engineering education in the world won’t be forced to reinvent the wheel. They’ll have mentors who learned their trade through years of hard work in the valley and elsewhere. And some of those who head back will be the entrepreneurs with the ideas and the initiative to start high-tech companies that are ready to compete on a global scale.

I think there are immense opportunities in India at this point of time as all the revolutions – computing, Internet, wireless, broadband – are happening at the same time. The next 3-5 years will transform the social and technology landscape in India. If one is willing to take some risk and be entrepreneurial, India is the place to be.

Tags: Emerging Markets

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