U.S.-educated entrepreneurs likely to
return to India, China

By Mike Swift

SAN JOSE — A study of highly educated Indian and Chinese
entrepreneurs who leave tech hubs like Silicon Valley to return to their
homeland to launch startups reports that they have found that economic
opportunity truly is better in India and China.

“I was surprised at how overwhelmingly positive people were about being back
home. The numbers were just astonishing,” said Vivek Wadhwa, a visiting scholar
at the UC Berkeley, who cowrote the study with AnnaLee Saxenian, dean of the
school of information at Berkeley, and scholars from Duke University and Harvard
University. “The numbers are like a slap in the face for these politicians who
are downplaying the rise of a new India and China.”

The survey found that 72 percent of Indians and 81 percent of Chinese who
returned found that the opportunities to start businesses were better in their
home countries. Just 14 percent of Indians and 5 percent of Chinese who had
returned felt the opportunities had been better in the United States.

The scholars used the professional social network LinkedIn to track down
highly educated natives of those countries who returned home after living in the
U.S. for several years.

Wadhwa’s research several years ago had found that 52 percent of Silicon
Valley startups were launched by immigrants, many of them highly educated
products of Stanford University, Berkeley and other schools. The fact that large
numbers of those Chinese and Indian entrepreneurs who

are returning home are pleased about their decision several years later,
and are broadcasting those feelings back to other Indian and Chinese
entrepreneurs who remain here, is bad news for the valley’s economic future,
Wadhwa said in an interview.

“It means we’re going to have that many fewer startups in Silicon Valley,
less vitality, less energy, because they are all going back,” Wadhwa said.
Because of that “reverse brain drain,” he believes less than half of the
valley’s startups are being launched by immigrants now.

When President Barack Obama visited Facebook last week for a
town hall event about the country’s budget debate, he said he backed changes
that would make it easier for highly educated immigrants to remain in the U.S.
and start companies here. To an approving audience at Facebook, Obama said it
was important that the U.S. find a way to make sure highly educated and creative
immigrants like former Intel (INTC)
CEO Andy Grove, a native of Hungary, build their companies here rather than
returning to their home countries.

“We want more Andy Groves here in the United States,” Obama said. “We don’t
want them starting companies — we don’t want them starting Intel in China or
starting it in France. We want them starting it here.”

But Wadhwa said Obama’s call to do that as part of comprehensive immigration
reform is ducking the problem.

“His words were not backed by any action,” Wadhwa said. “This comprehensive
immigration reform is an excuse not to do anything because that’s not going to
pass. There is no way in the world. We couldn’t agree on health care, how can we
agree on amnesty for illegals? It ain’t going to happen.”