In 1950, the first Indian Institute of Technology (IIT) was founded in a former detention camp at Kharagpur, West Bengal. A pet project of Jawaharlal Nehru, the goal was to replicate the institutions of higher educational excellence in the West, with focus on engineering, mathematics and the physical sciences. The idea was to develop scientific minds required to drive India’s economic development as the young democracy matured.
The government invested in the IIT concept, opening several more in a short time. But the initial outcome was not to its liking when graduates started leaving India for the West. This, critics claimed, illustrated that the system did not work.
Five decades later, Nehru is having the last laugh as IIT grads, techies and scientists are returning home in droves. They started returning in small numbers in the ’80s and ’90s and fuelled the early growth of India’s information technology industry. In due course of time, the IT industry moved into sophisticated areas such as aerospace components and semiconductor design. The result: today there are better career opportunities for young Indians here than in the West. In China, too, the attraction for the West has waned. Beijing is pouring billions into building sophisticated research labs to attract not only proven applied technologists but also theoretical and basic scientists skilled in disparate areas like materials sciences and artificial intelligence.
As the tide has turned, the spectre of a hegemonic power shift from West to East in human capital resources has gone from something that might happen in a decade or more to something that might happen in the next few years.
Meanwhile, politicians in Washington DC, led by US Senator Charles Grassley from Iowa, is trying to make it difficult for US companies to hire workers on H-1B visas, the most popular and prevalent form of employment visas for science and technology companies. Under the guise of reducing H-1B visa fraud, on November 19, Grassley and Senator Bernie Sanders introduced a bill to bar companies that lay off US workers from hiring foreign labour through H-1B and other programmes.
If the only cause of the exodus from the US were the economic downturn and political pressure, then stopping it would be less difficult. But as research by our team at Duke, Harvard and University of California-Berkeley has shown, Indians and Chinese are now leaving the US for professional and cultural reasons. The comfortable lifestyle they once could only find in the US is now available in their home countries. Other strong drivers: ageing parents and desire to be closer to friends and family. But the most important factor is a strong belief that they will have brighter professional and economic futures at home. In fact, many foreign students say they would prefer to return to their home country to start a business or build a career.
As that flow of brains continues to slow down — and possibly reverse — a significant percentage of US innovation would be lost to the rising East. That foreigners residing in the US contribute enormously to innovation is beyond dispute. We calculated that foreign nationals residing in the US were named as inventors or co-inventors in one quarter of WIPO patent applications filed from the US in 2006. Additionally, 16.8 per cent of international patents applications had an inventor or co-inventor with a Chinese-heritage name and 13.7 percentage had an inventor or co-inventor with an Indian-heritage names. Ethnic Chinese and Indians represent less than 3 per cent of the total US population.
In 2006, immigrants contributed to 72 per cent of the total patents filed at Qualcomm, 65 per cent at Merck, and 60 per cent at Cisco Systems. And contrary to claims that immigrant patent-filers crowd out US-born researchers, emerging research is showing that immigrants tend to boost patent output by their US-born colleagues. These immigrant patent-filers emerged from the US university system, where foreigners now dominate the advance degree seeking ranks in science, technology, engineering and mathematical disciplines. For example, during the 2004-05 academic year, roughly 60 per cent of engineering PhD students and 40 per cent of Master’s students were foreign nationals.
Beyond intellectual contributions, immigrants have been key entrepreneurial drivers in the US. According to another survey we conducted, a quarter of all technology companies in the US have at least one founder who is an immigrant. Indians dominated this group: they established more start-ups than the next four groups from Britain, China, Japan and Taiwan combined.
However, there is no government data on how many of these entrepreneurs and knowledge workers have already left the US. Future departures seem set to increase. In a similar study of over 1,200 foreign national students matriculating in the US, we found that only 6 per cent of Indian, 10 per cent of Chinese, and 15 per cent of European students said they want to stay permanently.
What’s more, those that have left the US did so at a critical time in their careers — just before they would be likely to start their own companies. On average, these company founders had lived in the US for 14 years. The average returnee in our survey was in their mid-30s. The implication is clear. Those who had left will start companies in their home countries, where most of the benefits of this entrepreneurship will accrue.
It is clear that a big shift is underway. The US is no longer the only magnet for the world’s best and brightest. Senators Grassley and Sanders may not have to wonder about H-1B visa fraud in the not-so distant future if the American Dream for Indians and Chinese techies is better fulfilled in Shanghai or Bangalore.
Vivek Wadhwa is Senior Research Associate at Harvard University and Director of Research, Duke University, US
The views expressed by the author are personal.