Social networks help Indian talents in Valley

Dr AnnaLee Saxenian is a professor at the University of California at
Berkeley with a joint appointment in the School of Information Management and
Systems and the Department of City and Regional Planning. Her book Silicon
Valley’s New Immigrant Entrepreneurs and Regional Advantage: Culture and
Competition in Silicon Valley and Route 128 is a pioneering work that, for the
first time, explains the reasons behind the success of Indian and Chinese
entrepreneurs in the Silicon Valley, from a deep sociological point of view.
While she continues to write on the entrepreneurship and culture of Silicon
Valley, of late, she has written many papers on the return of the Indians to
India. Some of her recent papers on the subject includes Bangalore: The Silicon
Valley of Asia? and The Bangalore Boom: From "Brain Drain" to
"Brain Circulation" .

In
this e-mail interview with Voice&Data, Dr Saxenian says that the product
design and such high value work will increasingly move to China and India.

What is the percentage of Indian-promoted companies in Silicon Valley in
recent times, that is 1998 onwards? Has there been any major change since the
time you published your research findings?

The percentage of Indian-run companies in Silicon Valley has continued to rise:
during 1996-98 they accounted for 10.9 percent of total SV technology companies
started since 1980; in 1999-2000 (my latest data) their share rose to 13.9
percent. In 2000 the absolute number of Indian-run companies was 1,283.

Why do so many Indians in Valley turn entrepreneurs?

Silicon Valley has a set of institutions (venture capital, local professional
networks and associations) that support entrepreneurship, and the culture of
Silicon Valley glorifies entrepreneurs, so it turns engineers and scientists
into aspiring entrepreneurs. This has been the case for native as well as
foreign-born professionals. In addition, immigrants tend to be self-selected
risk takers, having taken the original risk of leaving their home countries.

Why do many of them succeed?

They succeed for several reasons: first, Indian immigrants are extremely
talented, having often graduated from India’s elite engineering universities;
second, the Indian community has created social and institutional networks that
increase the likelihood of success (mentoring, information sharing, angel
investing, etc.); and finally, like other first-generation immigrants, Indians
often work very hard.

There is a perception that Indian success stories in the US business are
restricted to Silicon Valley. Do you agree?

Not at all. There are successful Indians in middle and senior management ranks
of many large non-technology US corporations and financial institutions as well
as universities. An Indian is now the managing director of McKinsey & Co. In
fact one of the reasons for the early successes of the Indian software services
industry is the role played by Indians in Fortune 500 companies, encouraging
their senior managers to take advantage of low-cost software development
opportunities in India.

Are Indians still considered good techies, but not so good managers?

This perception has changed significantly over the past decade, largely because
of the high profile successes of Indian technologists who became managers.

Of late, many Indians are looking back to India for funding companies and
starting companies with an India-centric business model. Why?

Indians perceive, rightly, that they have a distinctive opportunity in funding
or starting companies that take advantage of Indian resources, especially
skilled workforce. They understand Indian culture and institutions (government,
financial, as well as business) better than most foreigners do and so are more
likely to succeed in that environment.

You have talked appreciatively of ethnic social networking. Don’t you
think it is against the spirit of globalization?

Ethnic networking becomes a problem only if it becomes exclusionary and closed.
Social networks are ubiquitous and critical to the functioning of the economy,
both local and global. If they remain open they accelerate information flows and
learning within groups, whether based on profession or ethnicity or whatever.

Shyamanuja Das