Mystery Of Indian-Born Foreign Stars

Should we not be creating roles in India for the talented, asks Ajit Balakrishnan.

How many of us Indians wished some days ago we caught a glimpse of Winston Churchill turning in his grave at St Martin's Churchyard in Oxfordshire, when Rishi Sunak was elected prime minister of Great Britain.

And with that news came a flurry of social media messages from friends across India: 'Did you know Indian-origin persons head Google and Microsoft', and when I impatiently pointed out that being part of India's technology sector, how could I not know that, I got another series of messages: Did you know that the prime minister of Portugal is an 'Indian boy' and I bet you didn't know that a recent prime minister of Ireland is a 'half-Indian boy' and yet another one, that the vice-president of the United States is a 'half-Indian girl'.

Isn't it surprising that while all this is happening elsewhere in the world, in our own country the biggest businesses are headed by the owners' sons, the biggest Bollywood films feature 'star kids', the sons and daughters of yesteryear stars, and every major Indian political party features a 'politico-son'?

I could not but sink into a deep reflective mood during the past week, trying to make sense of these bewildering paradoxes.

India's higher education system has for decades pursued a course of merit-based admission, clearly trying to get over the feudal social system that we found ourselves in at the arrival of Independence.

But we now find that many of the top graduates of our medical, engineering, management, and similar institutes seeking and finding careers and fame outside India whereas our own businesses, political parties, and other institutions are still happily ensconced in a feudal father-to-son/daughter inheritance system.

Checking back into my memory, I can remember that up until the 1960s practically all my cousins who graduated as physicians emigrated to America. I recently discovered that this pattern was not just my cousins.

A 2008 study showed that of the physicians who graduated in the 1989-2000 period from India's most prestigious medical college, the All Indian Institute of Medical Sciences in New Delhi, 54 per cent were in the United States.

So far as IIT grads are concerned, many studies say that 20 per cent of them leave the country, ostensibly for further studies, and this has resulted in the finding that since the 1950s, 25,000-30,000 IIT grads are living in the United States.

A recent study of software engineers by an industry Web site says the ratio of salaries being paid in the United States and India is 12:1. Needless to add, this wage difference is the driving force behind the Indian software services industry’s exports worth more than $200 billion and employment of five million people.

What is the cycle of events that makes highly qualified Indians and Indian knowledge-based companies seek their fortune internationally and leave the domestic market to family-owned businesses with their feudal structure?

Is it the dollar/rupee exchange rate, which was Rs 8 to the dollar when I started working in the 1970s and which has become more than Rs 80 as I write this?

Or is it the tiny size (in value terms) of our domestic markets?

I remember a report from the National Council of Applied Economic Research, which pointed out the number of families whose heads would qualify as being 'managerial' was a mere 30 million and their household income on an average was a mere Rs 13,000 a month and the equivalent numbers of the next highest group of households, the 'professional and technical' category, was a mere 50 million also with a household income of Rs 13,000 a month.

I quote these numbers not to be pessimistic about the future, but to point out that real breakthroughs have historically happened when true innovation has stepped in and created products that are transformative in affordability.

For example, in 1906, Henry Ford launched his first car and pulled people away from horse-drawn carriages by setting the cost of buying and operating his car for one year at $1,364 whereas the equivalent cost for a horse-drawn carriage was $2,180, and he did it profitably. That is how real innovations happen and create markets as well as high-quality jobs.

We also need to be aware that with the next wave of innovation in Internet-related technologies speeding up and technologies like chat bots nearly matching basic human skills, the many hundreds of thousands of call centre employees will find their jobs under serious threat.

While these threats remained ignored, we see all our large tech players pursue the vision of 'digital transformation' -- essentially providing technical labour services to companies abroad to Internet-enable their businesses.

Is this driven by the belief that India's domestic market for anything technically complex is very small and consequently it is best for Indian tech companies to avoid any innovation-driven approaches and concentrate only on providing labour services to foreign companies?

Should we -- instead of having hundreds of committees debating how to attract foreign direct investment, or save forex, or create employment, or such other topics fashionable among economists -- get our attention focused on how to create a massive domestic market for products and services by harnessing real product innovation?

Should we not take steps to ensure that our best talent stay back in India to drive innovation in our domestic market rather than 'escape' away abroad?

Ajit Balakrishnan (ajitb@rediffmail.com), founder and CEO, Rediff.com, is an Internet entrepreneur.