B2B - Back to Bangalore

In Silicon Valley, B2B is back with a vengeance, only now it stands for something else - Back to Bangalore (we also have a new version of B2C - Back to China, but that’s another story).

Saritha Rai wrote an article titled "Indians Find They Can, Indeed, Go Home Again" (purchase required) for the New York Times over the holidays (January 26, 2005) that did a nice job of discussing this trend. She reports that:

Nasscom, a trade group of Indian outsourcing companies, estimates that 30,000 technology professionals have moved back in the last 18 months.  Bangalore, Hyderabad and the suburbs of Delhi are becoming magnets for an influx of Indians, who are the top-earning ethnic group in the United States.  These cities, with their Western-style work environment, generous paychecks and quick career jumps, offer the returnees what, until now, they could only get in places like Palo Alto and Boston.

30,000 in the past 18 months! That’s a lot of movement.  I have been looking for statistics on this reverse migration (comments would be appreciated from anyone who has seen more systematic views of inflows and outflows over time of Indian technology professionals in the US).  Anecdotally, I have to tell you that this is becoming a significant trend – and it is not just low level engineers, but some of the best and brightest of technology architects and entrepreneurs. Rai quotes one of the returnees:

“When I left India 25 years ago, everybody was headed to the United States,” said Mr. [Ajay] Kela, who pursued a Ph.D. at the University of Rochester and stayed two decades, working for companies like General Electric and AutoDesk.  For India’s best and brightest, a technology or engineering career was an irresistible draw to the United States, even until four or five years ago.  “But now they all want to get on the plane home,” said Mr. Kela, who returned with his wife and two children.

Now, to be fair, not all of these returning Indians are leaving U.S. companies. Rai does a good job of illustrating the range of opportunities to return to India through her profiles of the Indians on a street of Palm Meadows, a residential community outside Bangalore:

One of his neighbors recently returned to India from Cupertino, Calif., to run a technology start-up funded by the venture capital firm Kleiner, Perkins, Caufield & Byers. Across the street from Mr. Kela [who returned from Foster City, Calif., and is president of Symphony Services, an outsourcing firm based in Palo Alto], is another Indian executive, this one from Fremont, Calif., who works with the outsourcing firm Infosys Technologies. On the other side is the top executive of Cisco Systems in India, who returned here after decades in the Bay Area and New York.

As a denizen of Silicon Valley, I can’t help but notice that these returnees have all left Silicon Valley.  Many are still working for American companies, at least for now – that’s the good news. The bad news is that this is a significant loss for Silicon Valley as a geographic location for innovation, especially if their departures are not matched by arrivals of equally talented Indians.

I know, geography is not supposed to matter any more in this flat world.  As I wrote in an earlier posting on "The World Is Spiky", I think this is only part of the story.  I worry about the future of Silicon Valley as a spike aggregating talent on a global scale and creating an incredibly rich environment for innovation, learning and capability building.

Make no mistake about it, the entrepreneurial success of Silicon Valley in the past has depended heavily on the technical and entrepreneurial talent of immigrants from Asia – as anyone can see by walking into a meeting room of a Silicon Valley start-up and looking around the room.

If we lose our ability to attract and retain the best talent from around the world, I believe that our ability to innovate and to get better faster will suffer as a consequence, even with high bandwidth connections to Bangalore and other ecosystems across the globe.  Spikes still matter, big time.  I will go further and suggest that, in a world of accelerating change, spikes matter more than ever.  We lose sight of this at our own peril.

Comments

[Sanal Kumar]

John, the reverse brain drain is absolutely true. I have been here in the US for about 6 years now..and gotten to a point where I am living a comfortable life...a house in a nice suburb, an SUV, and weekend barbecues in the summer. But I am seriously thinking of returning back to India because...now in India you have exciting career opportunities and growth potential; you get to stay close to ageing parents and the kids can grow up in the same culture that you grew up in (which is a big worry for most Indians who move to the US)....the combination is quite a powerful magnet. I am only thinking about it, but there are many many people I know who have already caught the flight back home...

[neelakantan]

While migration happens from India to US and vice versa, I am not sure that these numbers have spiked significantly in the last few years. Second, you have very rightly mentioned, many of these returnees continue to work for their US based employers. From a US perspective, I would not sound off an alarm at this point at all.

[Alexander Osterwalder]

Writing from Chiang Mai, Thailand, one thing I observe is that the opportunities for new businesses are growing by the day. If highly qualified people can stay here and earn a decent living they won't go to the US or if they are in the US they will consider coming back. Space still mattters. And as a Swiss living in Thailand I must say that I really enjoy the quality of life. By the way, Chiang Mai is between India and China - only the US is far away ;-) Warm regards from the North of Thailand, Alex

[viinnie mirchandani]

John, the same thing started happening with Ireland a few years ago. Labor is much more fluid than it was one, two, three generations ago. In the current anti-immigrationmood in the country we may only accelerate this "reverse brain drain". John Doerr of Kleiner had a great idea we should staple a greencard to every post graduate science or engineering degree a foreign student earns at a US university...I wrote about this a few months ago...see

http://dealarchitect.typepad.com/deal_architect/2005/10/as_american_as_.html