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India, China experience entrepreneurship boom

Press Trust of India  |  Washington 

More and more skilled people from countries like India and China are increasingly returning home from the US, which has led to an "boom" in the two Asian countries, a new report said today.

The report 'The Grass is Indeed Greener in India and China for Returnee Entrepreneurs' of the Kauffman Foundation in association with the Duke University, University of California-Berkeley and the Harvard University said the current trend has come as a "major loss" to the US.

What was once a "brain drain" that advantaged the US economy now is reversed, to the long-term benefit of India and China, the report, which is based on a survey of skilled 153 Indian and 111 Chinese workers in the US who returned home, said.

Nearly half said they wanted to start companies back home.

"The data from the final section of the survey suggest, however, more complex process—one characterised by a two-way 'brain circulation' with potential benefit to both the United States and these emerging economies," the report said.

While there are no hard data available on how many skilled immigrants have already left the US, Vivek Wadhwa, one of the author of the report, estimates that 150,000 have returned to India and China, each, over the past two decades.

"The trend has been accelerating dramatically over the past five years; tens of thousands are now returning home every year. Most authorities agree with these estimates.

"For example, the Chinese Ministry of Education estimates that the number of overseas Chinese who returned to China in 2009 having received a foreign education reached 108,000: a sharp increase of 56.2% over the previous year; in 2010, this number reached an all-time high of 134,800," he said.

Skilled immigrants are now leaving the US in droves, Wadhwa said.

This is because of economic opportunities in countries like India and China; a desire to be closer to family and friends; and a deeply flawed US immigration system.

"Whether we call this a 'brain drain' or cheer the 'brain circulation' doesn't matter. It is a loss for America. Innovation that would otherwise be happening here is going abroad," he said.

The most significant factors drawing both Indians and Chinese home were economic opportunities, access to local markets, and family ties, the report notes.

More than 60% of Indian and 90% of Chinese returnees said the availability of economic opportunities in their countries was a major factor in their return.

Approximately, 78% of Chinese were lured by the attraction of local markets as were 53% of Indians.

And 76% of Indians and 51% of Chinese said it was family ties that brought them back home. The returnees took pride in contributing to their home country's economic development.

More than 60% of Indians and 51% of Chinese rated this as very important.

Government incentives weren't at all important for Indians, but did lure back 23% of the Chinese.

And Only 10% of the Indians and Chinese left the US because they had to; others may have been frustrated with their visa situation, but had other, more important reasons for returning home.

Wadhwa said among Indians, the strongest common advantage to entrepreneurs who had moved home was lower operating costs; among Chinese, it was access to local markets.

In India, 77% ranked operating costs and 72% ranked employee wages as very important advantages; in China, 64% and 61% did.

In China, 76% ranked access to local markets as very important. In India, 64% did.

The availability of qualified workers was perceived as a more significant advantage in India than in China, with 60% in India and 43% in China saying this was very important.

First Published: Thu, April 28 2011. 13:47 IST
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