Mountain View Voice

News - March 5, 2010

Brain drain takes toll on Valley

Region's high-tech talent returning in droves to India, China

by Kelsey Mesher

Smart, talented immigrants have shaped the entrepreneurial spirit and vitality of Silicon Valley for decades. But lately, with economies growing in China, India and elsewhere while the local tech scene remains stagnant, skilled immigrants are returning to their home countries in search of better opportunities.

And recruiters like Jack Perkins, of Mountain View, are helping them get there.

"The word is that India is booming, and there are more product development opportunities there," said Perkins, a principal at local boutique search firm Oryx.

These days, he said, Indian companies are on the lookout for "Silicon Valley DNA," which helps give them a "global perspective to move beyond the India-centric marketplace."

In the past, India was "really big on the services side, and back-office type of work and IT implementation and quality and testing," he said. "But now there's a critical mass of new product development for global (technology) products, taking place in India, and that requires a different type of engineer. So that's the market I'm addressing."

For example, Perkins is currently looking to fill a vice president of engineering position at a company in Mumbai: "They want the candidate to come from here because they need, as they put it, a real game changer," he said.

The trend bothers some industry watchers, who say an exodus of highly qualified individuals could have serious implications for the economic health of Silicon Valley.

"We have a lot to worry about," said Vivek Wadhwa, a researcher at Duke University and currently a visiting scholar at UC Berkeley.

"Now if you speak to anyone, meet any random Indian or Chinese, everybody knows somebody that has gone back home," he said. "It's a severe problem because we're losing critical talent."

Wadhwa's research focuses on the effects of globalization on engineering, and specifically on highly skilled immigrant entrepreneurs. Over the next five years, he estimates, 100,000 Indian and Chinese immigrants working in technology and engineering will return to their home countries in search of better professional opportunities. He believes tens of thousands of them will be leaving Silicon Valley.

"More than half of the startups during the dot-com boom were from immigrants," he said. "That's a major blow to Silicon Valley's vitality. There's nothing good about this for Silicon Valley."

In research conducted last year, Wadhwa's team at Duke surveyed 1,203 Indians and Chinese who had returned to their home country after working or going to school in America. The survey yielded a 90 percent response rate.

They found that 68.7 percent of Indians and 84 percent of Chinese believed their home countries provided better career opportunities. Almost half of Indians, and over 60 percent of Chinese, said financial compensation was a factor in returning. (Perkins said he wouldn't disclose for free the difference between typical salaries here and in South Asia.)

"It started with the economy," Wadhwa said, "but it was happening anyway."

Missing home

Even up-and-comers educated here seem to be following the larger drift.

"I'm thinking about sticking around for a couple of years, two or three but probably not more than that," said Ayush Khanna, a graduate student in the School of Information at UC Berkeley, adding that he chose the Berkeley program specifically for its proximity to Silicon Valley.

"I would say the primary motivation for me to stay would be the fact that I'd like to experience working in Silicon Valley to see what that's like," he said. A second reason to stay, he said, would be to pay back his student loans.

Khanna said he was surprised, when he moved to the U.S. from Mumbai last August, to find that the job opportunities here were not so different from those back home. While it used to be that "so-called elite" jobs, like research and development, were only available in America, the emerging South Asian economy has opened up similar opportunities back home, he said.

Wadhwa noted that aside from seeking better professional opportunities, many immigrants miss their families, or have trouble adapting to American culture.

In his research, a majority of Indian respondents said the emotional growth of their children was better in India, and 42.5 percent believed their home countries provided better education for children. And a vast majority cited closeness to family and friends in their home country, as well as care for aging parents, as other considerations in leaving the U.S.

"I'd definitely be making much better money here compared to there," Khanna said. "But the thing is there's also the small fact that I am from there, and that I have friends and family there, and there's not a huge difference in the quality of work that I get to do."

'People go willingly'

Perkins said the current brain drain will not cause the "death" of Silicon Valley, but described it as "one of the many headwinds" it faces.

"We can't assume that people who come here on an H-1B visa will do anything and everything to stay when there are very attractive opportunities back in the home country," he said.

Asked whether his work didn't hurt America's economy, Perkins replied, "The money I'm paid comes here, that's a good thing."

"I'm going with the flow," he added. "I'm in the Indian export business, and people go willingly."

Wadhwa agreed, describing the work of headhunters like Perkins as "a booming business right now because everyone wants to go. That's the future, unfortunately."

E-mail Kelsey Mesher at kmesher@mv-voice.com ?? ?? ?? ??

Comments

Posted by Jp, a resident of North Whisman
on Mar 4, 2010 at 2:15 pm

Its about time they are starting to leave!


Posted by Duh, a resident of Sylvan Park
on Mar 4, 2010 at 2:29 pm

That and the fact that legal immigrants have to wait over 6 years to get their green cards. Stuck in archaic laws which prohibit career advancement whereas anyone from a failed state can manufacture a story on religious persecution and get in and start drawing on the benefits that our government has on tap for such people. Capitalism going wrong - the only to maintain an edge is to get the best and brightest because these people create jobs for everyone else. Our elected officials are only good at rhetoric and preserving their own seat - they could care less about the business' access to retaining talent by creating over-burdening immigration laws just in case the tax-laws were not enough. How can a business succeed when the cost of doing business is so high here and access to talent is becoming more and more difficult while our government keeps expanding programs for people who are not producing and taxing those hard-working folks who are.


Posted by Michael, a resident of Castro City
on Mar 5, 2010 at 2:23 pm

It takes a certain courage to pull up roots and travel far to live & work in a strange place. It is similar to starting a company. It happened before with Research Triangle and Austin. The hope is that the flow never stops. It is better to have a might river than a cesspool.


Posted by Jeffrey Rodriguez, a resident of Blossom Valley
on Mar 6, 2010 at 10:27 pm

It is also a choice of what opportunities there are for our families, and the quality of life for us. Back home we still have relatives, a network of friends, and a warranty that our family will grow up on a familiar environment. Going back home is just natural. This country is not welcoming foreigners, we are still aliens after so many years living in this country despite the fact we speak the language, we pay taxes, participate in this society, and our kids are part of the American society. Furthermore, schools, medical care for our family and our parents is more affordable back home,and we have more to contribute and impact in our native countries, there are more opportunities to grow, etc. It is logical that given better conditions back home we would go back. We appreciate this country because it gave us many opportunities to grow and we in return gave a lot to this country.It is time to evaluate the current situation and take the right decisions to either stay on Silicon Valley or go back home. I am glad that I have those choices.


Posted by Peter, a resident of another community
on Mar 8, 2010 at 9:06 am

In the most cases H-1b workers not the best or the brightest - but the cheapest.


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