Silicon Valley returnees say the grass is greener in India and China

Time was when America stood as the unrivalled beacon of economic advancement, and the world’s citizens-and certainly every Indian and Chinese of certain means, education, and wherewithal-were beckoned by the siren song of the American Dream.

The unintended consequence: Decades of a global brain drain breaking along American shores.

But Vivek Wadhwa, a visiting scholar at UC Berkeley who is also affiliated with Duke and Harvard universities, began to notice a shift in the mid-2000s. With India and China’s rapid economic growth, coupled with the backlog on permanent-residency visas for both groups, he reasoned that the U.S. was on the verge of seeing a reverse brain drain.

According to a new survey released today, “ The Grass is Indeed Greener in India and China for Returning Entrepreneurs,” Wadhwa’s prediction appears to be coming true.

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[caption id=“attachment_3025” align=“alignleft” width=“300” caption=“Chinese and Indians are taking the long flight back home. Happily. ChinaFotoPress/Getty Images”]  [/caption]

Authored by a number of scholars-including Wadhwa and AnnaLee Saxenian, the dean of UC Berkeley’s School of Information-the study builds on a 2008 survey that Wadhwa and Saxenian conducted of more than 1,200 repatriated Indian and Chinese immigrants, which found that they had returned home for improved career opportunities, family ties, and quality of life.

The new study polls a much smaller sample of about 260 Indian and Chinese entrepreneur-returnees. (Note: Given the small and non-random sample of survey respondents, the study authors acknowledge that their findings may not be generalizeable, though they may be “representative” of returnees who have started high-tech ventures in India and China.)

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What Wadhwa and Saxenian discovered this time around mostly bolsters the findings of their previous study: Returnees were lured home due to economic opportunities, access to local markets, and family ties.

More specifically, the new study found:

• More than 60% of Indian and 90% of Chinese respondents said the availability of economic opportunities in their countries was a very important factor.

• 78% of Chinese ranked local markets as very important reasons for returning home compared to 53% of Indians.

• 76% of Indians and 51% of Chinese respondents said that family ties were a very important consideration in motivating their return.

• Indians reported lower operating costs as a business advantage that came with returning home while Chinese respondents said access to local markets created a business advantage.

• The returnees also reported taking pride in contributing to their home country’s economic development; more than 60% of Indians and 51% of Chinese rated this factor as very important.

Overall, the respondents felt that the opportunities for starting a business and the speed of professional growth in India or China was better than in the U.S. Only 14 percent of Indians and 5 percent of Chinese said that opportunities had been better Stateside.

The one advantage that the U.S. tended to have for this group? Money, of course. Salaries were better in the U.S. for 64% of Indian respondents and 43% of Chinese respondents.

Interestingly, immigration concerns were not a driving factor for returnees. Only 9 percent of the respondents said that the availability of visas affected their decision to return home.

Not without precedent

The scholars behind the new study note that this scenario is certainly not without precedent, and similar immigration patterns have been seen with immigrants from Taiwan and Israel in the late 1980s and 1990s.

They write:

In both eras, the pull of economic growth at home, and the professional opportunities that growth generates, loom significantly larger than policy measures in either the United States or abroad. It is worth noting, in addition, that in both cases, the timing of these “reversals” also corresponds to periods of economic downturn in the United States that diminish the professional opportunities for immigrants.

The authors also encourage against viewing reverse migration trends to India and China as a zero-sum game since the study also found that the respondents kept in steady contact with friends and professional colleagues in the U.S. The scholars assert that this potentially creating a “two-way ‘brain circulation’ with potential benefit to both the United States and these emerging economies.”

A reflection of reality?

And though there’s growing concern in some circles that America is potentially losing talented and promising immigrant entrepreneurs through a reverse brain drain phenomenon, Indian observers will surely take a different view.

Vociferous debate resulted from a recent Rutgers University study that suggested that only 8 percent of Indian university students studying in the U.S. want to permanently emigrate.

Indeed, surveys don’t always map to reality. As one critic of the Rutgers study put it:

Survey respondents’ attraction towards India is driven by lofty-softy factors like family, giving back to the motherland, help build India’s higher ed, and comfort with society/culture. On the other hand, the factors behind keeping folks away from India are hard-nosed things that have a lot to do with job-related conditions: corruption, red tape, academic work environment, research funding, earning potential. [see page 16] Wonder which set of factors are likely to win?