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Immigrants find more opportunities back home

Posted on May 3, 2011
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Does a graduate or undergraduate degree from the US and/or five or fewer years of professional work experience in that country give Indian and Chinese immigrants in their 30s enough heft to return home to start new businesses?

Do immigrants from India and China go to the US to become residents or to arm themselves with the experience and education needed to succeed at home? Or is the trigger to return home caused by push factors such as visa hassles and slow economic recovery in the US or pull factors such as “economic opportunities, access to local markets and family ties” back home?

A study led by Vivek Wadhwa, an Indian-origin scholar in the US associated with University of California, Berkeley, Duke University and Harvard Law School, seeks to throw light on such questions. Wadhwa himself is fighting for fairer immigration laws for Indians in the US.

The study, which was supported by Wadhwa’s fellow academics, has been published as The Grass is Indeed Greener in India and China for Returnee Entrepreneurs: America’s New Immigrant Entrepreneurs, Part VI, this week by Kauffman: The Foundation of Entrepreneurship.

Wadhwa and his team surveyed 153 Indians and 111 Chinese (primarily male) respondents, who came to the US for further studies and chose to return home and have set up entrepreneurial ventures primarily in the area of information technology (IT) that are at least 12 months old. The survey said that these immigrants were fed up with “restrictive immigration policies” in the US, apart from having family ties and capitalising on opportunities to start their own business in their home countries.

Dane Stangler, Kauffman’s director of research, said the personal characteristics of immigrants coming to the US for studies or work from India and China have not changed over the years and even in the past four or five decades. What has changed, starting in the early 1990s in India and earlier than that in China, are the circumstances at home.

The average age of both Chinese and Indian respondents who participated in the survey that was conducted between September 2010 and March 2011 was 37 and “most companies started by the returnees were less than five years old”. As many as 93% of Indians and 89% of Chinese respondents were male.

About 56% of the Indian companies and 33% of the Chinese ones started were in the IT sector. Also noteworthy is that a “few companies—26% of Indian respondents and 10%?of Chinese respondents—were family-owned”. The survey does not clearly state whether these are new family businesses.

About 60% of Indians and 51% of Chinese respondents said they took pride in contributing to the economic development in their respective countries.

As many as 72% of Indians and 81% of Chinese returnees said opportunities to start businesses were better or much better in their home countries, but in terms of quality of life, 43% of Indians and 40% of Chinese found a better quality of life in the US.

According to the survey, “lower operating costs for Indians and access to local markets for Chinese were among the strongest common advantages to entrepreneurs”. Employee wages, availability of qualified workers and the mood in their countries as well as business and personal/family networks came up as important determinants for both Indian and Chinese respondents.

Wadhwa warned in a blog that “the US will not be the only land of opportunity and it will not be the only land of innovation”. He ties this to his statements a few years ago on reverse brain drain from the US and the need for reforms to make it smoother for highly qualified immigrants to stay in the country.

Mint will be carrying more detailed findings from the report in a forthcoming issue.

30 April 2011

Malvika Chandan

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