Indian techies in the US explore prospects back home

For most of the past decade, Duke computer science professor Pankaj Aggarwal saw a familiar pattern among his Indian national students.

They would arrive at Duke, get an education, then be recruited to stay in the US to work on an H-1B visa or to go on to a US graduate school. In the past five years, Aggarwal has seen a rapid shift in behaviour. Indian nationals matriculating at US institutions are now more likely to seek opportunities at home rather than strike out for the American Dream. Further, in these trying economic times students opt to return home to more secure social safety networks and feel comfortable that they will not be sacrificing career opportunities.

When I joined Duke's Masters of Engineering Management programme in 2004, nearly all of my foreign students said they planned to stay in the US for at least a few years. In the class of 2009, the majority now expect to return straight home. They are among the tens of thousands of Indian nationals pulling up stakes and beating a path back to the sub-continent, content in their decision. In reality the great recession is perhaps a tipping point but not the primary rationale for their decision to return to India en masse.

We knew that Indians were returning home before but no one really had bothered to talk to them about their decisions. Over the course of the past two years, my research team at Duke University spoke to over 500 Indians who had worked or studied in the US but returned home. They are no longer students but they likely reflect the students' mindset.

Here is what we learned.

Most returnees originally came to the US for career and educational opportunities. But the majority of returnees cited career as the primary reason to return. On our survey, 79% of Indians cited growing demand for their skills in their home countries as a strong reason to return home. Returnees also believed that their home countries provided better career opportunities than they could find in America.

This belief was validated by our finding that more than twice as many respondents held senior executive jobs in India than they did in the US.

Equally important for India and the US, 56.6 % of Indian respondents indicated they would likely launch a business within the next five years. The entrepreneurial spark of Indian and Chinese entrepreneurs played a key role in turning Silicon Valley into an economic dynamo.

When we researched this topic, we found that roughly 52% of all the technology companies in the Valley were founded by immigrants, with Indians founding more companies than others. A one-quarter of all international patents filed in the US hade inventors who were foreign nationals in the US Patents are good proxies for innovation and, in many cases, a precursor to the launch of a company.

Curiously, a relatively small percentage of Indian respondents listed visa difficulties as a major reason to return home. However, I believe that is hindsight bias and visa problems played a more significant role than they perhaps remembered. Many of the students I am speaking with now are returning home because they could not get H-1B visas or are frustrated with the visa process.

In another subsequent survey, we focused on foreign national students in the US, and found that a significant percentage of Indian students were worried about getting a work visa to stay in the US. With one million Indian nationals and their families holding H-1Bs and waiting in line to gain permanent residence to the US a process that could take over a decade with no guarantees of success it's hard to imagine that smart engineers and scientists can't do the math, see their slight chances of attaining full citizenship in a reasonable timeframe, and return home.

Many of the Indian returnees we spoke with indicated that the believed quality of life was on par with what they enjoyed in the US, Respondents also felt that their relative purchasing power was higher in India even if their absolute salary was lower. They also felt that they enjoyed most of the comforts of Western life including cars, air conditioning and decent health care. But the biggest quality of life factor pulling the returnees home was the ability to be closer to friends, to enjoy their native culture and, most importantly, to better care for aging parents. An astonishing 89.4% of Indian returnees said that they would have better opportunities to care for their parents at home than in the US. This is likely a reflection of the difficulty in obtaining visas to bring aging parents to the US.

How will the thousands of returning students benefit India? It's fairly easy to extrapolate some ideas on this. According to a growing body of research, foreign nationals have made outsized contributions to the US economy, in particular in science and engineering disciplines. A paper by William R Kerr of Harvard Business School and William F Lincoln of the University of Michigan found that holders of a temporary work visa called the H-1B visa add significantly to US innovation as measured by patents issued. Kerr and Lincoln also found that in periods when H-1B visa numbers went down, so did patent applications filed by immigrants. Jennifer Hunt of McGill University and Marjolaine Gauthier-Loiselle of Princeton University analysed long-term changes in the US population a paper published in January 2009 titled How Much Does Immigration Boost Innovation? They calculate that, for every percentage point rise in the share of immigrant college graduates in the US population, the total per capita number of patents for the entire population should increase by an astonishing 6%.

These papers imply that many of these same immigrant college graduates, if they are working at home in comparable fields, would likely have a similar impact on patent filings. Granted, many of them will be in India working for US multi-nationals such as Cisco Systems and Microsoft. But patent filers represent a living, breathing intellectual good that fuels economic growth not only in the company where they filed the patent but also in subsequent companies where these filers land, be they Indian or multi-national. The upshot of all this? Simply put, India is gaining a tremendous reservoir of talent trained at some of the best educational institutions in the world which is trained to think globally and interact easily with both Eastern and Western business cultures.

The author is senior research associate at Harvard University and executive in residence, Pratt School of Engineering, Duke University.