Immigrant Innovators
Indians launch 15 percent of Silicon Valley start-ups.
What lessons do they have for today’s tech entrepreneurs?
By Vivek Wadhwa
When I was a child, my Indian parents encouraged me to become a doctor or an engineer. Those were the two most prestigious professions for the middle class. Starting a business was for the less educated.
This view has long suppressed entrepreneurship among India’s young engineers. Things are surely changing, but even as recently as five years ago, joining a big technology company such as Infosys, TCS, or a multinational behemoth such as IBM provided India’s engineering graduates the best career and matrimonial prospects.
Why, then, do their kin who left for America dominate the ranks of Silicon Valley’s immigrant-founded start-ups? Indians account for 6 percent of the area’s working population. Yet they start 15 percent of its technology and engineering companies. That’s more than have been founded by the next four immigrant groups – from Britain, China, Taiwan, and Japan – combined.
This is a mystery that I researched with the help of notable academics such as AnnaLee Saxenian, dean of the University of California, Berkeley’s School of Information, and Harvard economist Richard Freeman.
It starts with education. We found that immigrant company founders tend to be very well educated. Ninety-six percent have a bachelor’s degree, and 74 percent have a master’s or higher — and three-quarters of these degrees are in science, technology, engineering, or mathematics (STEM). Indians are the most highly educated immigrant group, and their instruction typically is in English — so they start with a big advantage.
Skilled immigrants, in general, tend to come from middle- or upper-class families. They are usually at the top of the social ladder back home and come to a land where they are at the bottom. They face discrimination for their appearance, culture, and accent. And they endure resentment from natives who accuse them of taking away jobs. To regain their lost social status, immigrants work harder than they might in their home countries.
Also, people who leave everything behind to move to a strange, foreign land tend to be risk takers and are thus predisposed to embrace entrepreneurship. This may explain why immigrants have founded an extraordinary 52 percent of Silicon Valley start-ups. But why, among this group, have Indians achieved disproportionate success?
To put it simply, they learned and mastered Silicon Valley’s rules of engagement.
The first few Indian CEOs who cracked the glass ceiling got together to discuss the hurdles they had faced. They realized that the key to uplifting their community and fostering more entrepreneurship was to teach and mentor others. So they formed networking organizations to mobilize the information, know-how, skill, and capital needed to start technology companies. The first generation of successful entrepreneurs – including people like Sun Microsystems cofounder Vinod Khosla – served as visible, vocal role models and mentors. They also provided seed funding to other members of their community.
Starting a technology business became the “in thing” for Indian engineers in Silicon Valley. They began achieving extraordinary success and helping others — including entrepreneurs back home. This caused the technology culture in India to start changing.
Today, graduates from India’s engineering colleges still face the same pressure from their parents to take the safe route and join an established company — as do some Americans. But technology entrepreneurs are gaining stature – and matrimonial prospects.
Vivek Wadhwa is a scholar specializing in entrepreneurship. He is vice president of academics and innovation at Singularity University and is also affiliated with Duke University’s Pratt School of Engineering, Stanford University, and Emory University.