Valley diaspora set to rock India (from India)

Silicon Valley is suffering a brain drain that is just going to keep getting worse. Historically the valley has been the beneficiary of brain drains from around the world.

The diaspora of China, India, Russia, etc, all came to sunny California to start their companies and make their fortunes. Companies like Juniper, Q-Logic, Exodus , and Silicon Labs are among the hundreds of companies that have generated billions in sales and wealth started by the best and brightest from around the world. Now some of those great minds are packing up and heading home.

I spent the first week of February in India with a TiE delegation of other venture capitalists and TiE Charter members.

Everything you’ve heard about how exciting and dynamic things are in India today is true _ if anything, it’s understated. Politicians and labour unions who are expressing concern about US call centre 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.

Take Bob Kondamoori, the Chairman and Founder of Xalted Networks formerly of Dallas Texas and Santa Clara, California, but now based in Bangalore India.

He started his company in the typical Silicon Valley way. He raised three rounds of funding starting in October 2000 from a prestigious list of venture capitalists.

Like so many other telecommunications companies at that time, he ran out of money and found it next to impossible to get the venture guys to loosen the purse-strings enough for him to pay the high costs of keeping his company going in the US.

Instead of giving up hope and closing his doors, Bob picked up and moved his company to a place where a dollar lasts longer — his homeland of India.

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) lack that Silicon Valley has in spades. The first is years of relevant experience — each new generation of technology building on the successes and failures of the one that came before it.

The second is high-tech entrepreneurs — the person who’s worked in an industry for long enough to know how things are done and to know where the problems that are important enough to solve that their solutions are worth some money.

But there’s nothing genetic that leads these shores to produce more entrepreneurs than anywhere else.

For the last 30+ 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 diaspora came to the US 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 ole 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 and tried 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 now 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 that 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.

We now have our own Silicon Valley Diaspora to moan about - the best and the brightest leaving these shores for bigger and better opportunities elsewhere. So watch out. While this first wave of India Shining is dominated by call-centre and IT outsourcing, the next wave is likely to be dominated by software and hardware companies that build their products in India and their sales and marketing in the US.

Excellent article and very true.

I have seen a shift recently in the mix of hits on the web site for my hi-tech consulting business. Slowly but surely, more are coming from India, China, Taiwan, Indonesia, and other countries in southeast Asia.

Does this mean there will be a reversal of the decades long emigration of many of the most talented Indians to the US?

Some of our family's best doctors have been of Indian extraction.

We now have our own Silicon Valley Diaspora to moan about - the best and the brightest leaving these shores for bigger and better opportunities elsewhere.

So Americans are not among the "best and brightest"?

So now those bright engineers who graduate from IIT with arguably the best engineering education in the world won’t be forced to reinvent the wheel.

I would like to see some evidence for this. Better than MIT? Stanford? Carnegie Mellon?

Lots of Indians go to Stamford, CalTech and MIT after studying at IIT. My brother-in-law just received an Engineering MBA at Carnegie Mellon, where he was surrounded by Indians who did their undergrad work at IIT.

Yes, I know that. But does that not prove my point (I am talking about research universities.) I have never heard anyone at MIT talk about going to IIT for grad work or talk up the research over there. I am sure that one can get a decent BS over there as curricula is basically straight forward. I would even assert that in CS and to a certain extent EE that 4 years is really too much time for the undergrad basics. The article seemed to imply that IIT is equal to these institutions. I find that hard to believe both in terms of breath and depth. That was my point. I either attended, taught at or interacted with all of these American institutions and have employed IIT graduates. I just do not agree with the article that IIT is on the same level. I sure it could get there some day. I even went out and looked at there various campuses web sites and I do not see a caparision with even MIT even by aggregating all IIT campuses.

So Americans are not among the "best and brightest"?

As any number of globalist Freepers will point out, Americans are the product of a bad education system and are pretty much spoiled, lazy, incompetent and greedy.

Offshore = good. Profitsatanycost = good. Wal-Mart = good.

There WILL be a day of accounting.

I hate to say this, but aside from current members of the professional and aspiring-to-be professional classes, many Amurcans are lazy when it comes to education and the education of their children. They simply brag about how great their public schools (where their children are socially promoted) are when little Jane or Johnny can barely do long division.

If you make it to high school and all you care about is sports and how popular you are, you will join the long list of Wal-Martians working sh-ty jobs. Who's fault is it that the people I see perfoming well on the job are those who took their education seriously, who are disproportionately Indians, East Asians and Upper-Middle income whites?

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