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The Lessons of Indian Entrepreneurship


Friday, October 19, 2012

The remarkable success of immigrants from India in entrepreneurship would surprise most Americans. But that in and of itself shouldn’t surprise most Americans, because it is a surprise to many in the Indian-American community as well, including Neesha Bapat.

Bapat serves as the lead researcher for a project at Stanford University’s Arthur & Toni Rembe Rock Center for Corporate Governance that focuses on the history of immigrant entrepreneurs in America. In a recent article for Forbes magazine (http://www.forbes.com/sites/singularity/2012/10/15/how-indians-defied-gravity-and-achieved-success-in-silicon-valley/), she presents an overview of Indian economic mobility with a special emphasis on their growth in Silicon Valley. Bapat notes that in the 1950s and 1960s, Silicon Valley was populated by a few immigrants from India who were primarily low-level engineers who faced dismissive stereotypes that discouraged economic mobility. In the 1970s and 1980s, however, that began to change dramatically. Large numbers of graduates from India’s top engineering colleges began arriving and prospering in unimaginable ways. Some engineers, such as Vinod Dham, introduced startling breakthroughs like the Pentium chip, while others would co-found companies like Sun Microsystem.

In 1999, a UC-Berkeley study found that entrepreneurs from India had launched 7% of all startups in Silicon Valley from 1980 to 1998. Several years later, Stanford researchers discovered that a quarter of American startups and just over half of those in Silicon Valley were founded by immigrants. Of those immigrants, over 13% of Silicon Valley startups and nearly 7% of those nationwide were Indian. Researchers were astounded, as immigrants from India comprised less than 1% of the population at the time.

Over the last few years, the proportion of startups founded by immigrants has dropped to just below 25%. However, when Bapat recently reevaluated rates of immigrant entrepreneurship, she was shocked to see that Indian immigrants had founded 8% of all technology and engineering startups while still only composing less than 1% of the U.S. population.

How they did this holds valuable lessons for all immigrants groups as well as native Americans. First, as Bapa points out, the Indian engineers who began arriving in the ’70s and ’80s embraced the corporate culture of Silicon Valley. Second, as they became better established, they began to mentor each other. Third, they also established entrepreneurial networks. With continued immigration restrictions, measures such as these take on more importance in sustaining the vitality of Indian entrepreneurship than ever before.

While some may charge that these efforts by Indian immigrants were insulating, this approach is no different from other ethnic and national groups who help each other when no one else will help them. In the bigger picture, the accomplishments of Indian entrepreneurs are our successes, as these enterprises go on to hire many native American citizens. It is yet another reminder how immigrant entrepreneurs are a vital link to securing the United States’ economic future, and how the current restrictive immigration environment is an impediment to us all.



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