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Rediff.com  » Business » 150,000 entrepreneurs in US have returned to India!

150,000 entrepreneurs in US have returned to India!

Last updated on: April 28, 2011 17:30 IST

150,000 entrepreneurs in US have returned to India!

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Lalit K Jha in Washington


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

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 United States.

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.

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Image: An American flag is unfurled in the outfield before the start of Game 3 of Major League Baseball's ALCS playoff series between the Cleveland Indians and the Boston Red Sox in Cleveland.
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'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 authors 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," he said.

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"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 per cent 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.

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"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 per cent of Indian and 90 per cent of Chinese returnees said the availability of economic opportunities in their countries was a major factor in their return.

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Seventy eight per cent of Chinese were lured by the attraction of local markets, as were 53 per cent of Indians.

And 76 per cent of Indians and 51 per cent 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 per cent of Indians and 51 per cent of Chinese rated this as very important.

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

And only 10 per cent 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.

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

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

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


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