By Rajesh Mehta and Uddeshya Goel
The USA, the land of opportunities, has been luring Indian professionals in diverse fields for decades. The key ingredients to the migration to these developed nations have been higher salaries, the top-notch standard of living, and a scope to climb the income ladder. In fact, according to the Ministry of External Affairs, 1% of the Indian population lives abroad.
However, in the past few decades, especially since the Financial Crisis of 2008, climbing the income ladder has got much difficult in developed nations like the US, UK, and Canada. This means that a youngster is less likely to surpass the income level of his father. This has led to a downturn impact on the positive perceptions of the Indian Diaspora, who have started to explore alternative career paths in their home country.
The last two pandemic years have been a conundrum for businesses across the nations but what came out crystal clear was the high confidence in countries like India with robust capabilities and great minds to steer the economic growth curve. This is evident from the fact that besides the fragile global economy, the investments in the Indian private equity in the first eight months of the year were at $47.3 billion, which was at par with the previous full-year high recorded in 2020. Interestingly 15 Indian start-ups became unicorns in the first half of this calendar year while nine more reached unicorn status in July and August. That is more new unicorns created in India in just two months than the eight that emerged in all of 2020. It brings the country’s total to 57, closing the gap with China, which boasts about 160 unicorns, which in turn is second only to the U.S., with roughly 400.
With the uncertain business environment triggered by the COVID-19 pandemic and immigration-related issues, many talented Indians in the US who were forced to return to India are now seeing the start-up ecosystem as a platform to monetize their expertise and build home-grown technologies for the world. The peculiar thing about this change is the fact that not only tech and software start-ups are trying to poach this inflow of rich talent, but also the companies in the banking, consumer discretionary, healthcare sectors are quite keen to hire foreign returnees to fill up digital skills and cloud migration positions.
Even as covid has caused major dislocation in the Indian economy, it has also acted as a tailwind for digital and technology-enabled businesses, thus making it a big criterion for private equity firms that are looking to bet on the next set of high growth companies in India. It became clear that sectors like Ed-tech, Fintech, SaaS, and Health-tech would become more prominent amongst investors as they demonstrated resiliency, while other sectors bled during the pandemic. Besides this, In India, the future holds promise for deep-tech start-ups in space and drone technology after the government liberalized these industries, AI-VI technology catering to the metaverse and biotechnology. These sectors have opened doors to immense entrepreneurial opportunities for the returning Indian Diaspora to act upon and grab a piece of the growing pie. This can act as a catalyst for “reverse brain drain” and may result in a new wave of start-ups, which can deploy global experiences and knowledge with a desi touch.
Today, on the occasion of Pravasi Bharatiya Divas, India invites its people from around the world to return and showcase their capabilities where it is highly valued. With labor costs still very low, the English language knowledge and fluency still very strong despite competition from the Philippines and China, high-tech R&D infrastructure in making, and good financial supports, India’s position is surely better than the best in the world right now.
This has also the potential to turn into a virtuous cycle, wherein the Fortune 500 companies can initiate large projects in collaborations with new-age start-ups in India, spearheading the growth in Biotechnology, Computer Sciences, Artificial Intelligence (AI), and more. Thus, making significant investments to improve and establish digital infrastructures and build townships to cater to the families of these skilled migrants. This is quite evident from the fact that tech giants like Apple Inc, Tesla Inc, Google, etc have been betting big on India and bringing the NRIs back to the country for bigger operations.
People with better skillsets are now finding it difficult to grow professionally in Silicon Valley, because of the stagnation that prevails there. They like any other investor are now looking at investing their brains in growing the Indian economy, which provides much better opportunities for growth in unexplored markets. Many of them will return and build companies that will employ thousands, with a difference that this time the jobs will be in Hyderabad or Pune, and not in the Silicon Valley.
(Rajesh Mehta is a leading consultant & columnist working on Market Entry, Innovation & Public Policy. Uddeshya Goel is a financial researcher. Views expressed are personal and do not reflect the official position or policy of FinancialExpress.com)