Indians lead in founding US tech firms

Bangalore, January 10 :

Indians have founded more engineering and technology companies in the US in the past decade than immigrants from Britain, China, Taiwan and Japan combined. Of all immigrant-founded firms, 26 per cent have Indian founders.

This emerges from a study of engineering and technology companies started in the US from 1995 to 2005. This study points out that while the US “immigration debate” focuses on “millions of unskilled immigrants who have entered the US illegally”, it has “overlooked hundreds of thousands of skilled immigrants who annually enter the country legally”.

Indian entrepreneurs were dispersed around the US, with sizable concentrations in California and New Jersey, found this study called “America’s New Immigrant Entrepreneur” undertaken by a team of students at the North Carolina-based Duke University’s Pratt School of Engineering. Duke University, a private coeducational research university founded in 1838.

Significantly, almost 80 per cent of immigrant-founded companies in the US were within just two industry fields, software and innovation or manufacturing-related services.

Immigrants were “least likely” to start companies in defence, aerospace and the environmental industries. They were most highly represented as founders in the semiconductor, computer, communications and software fields.

Estimates from the researchers say contribution of non-citizen immigrants to international patent applications increased from 7.3 per cent in 1998 to 24.2 per cent in 2006. Indians formed the second-largest group of immigrant non-citizen inventors - after the Chinese.

From 1999 till now, the per centage of firms with Indian or Chinese founders had increased from 24 per cent to 28 per cent. Indian immigrants out-paced their Chinese counterparts as founders of engineering and technology companies in Silicon Valley.

An earlier research project showed that some 17 per cent of Silicon Valley start-ups were found to have a Chinese founder as against seven per cent with an Indian founder.

However, from 1995 to 2005, Indians were key founders of 15.5 per cent of all Silicon Valley start-ups. Immigrants from China and Taiwan were key founders with 12.8 per cent.

Said the study, “What is clear is that immigrants have become a significant driving force in creation of businesses and intellectual property in US - and that their contributions have increased over past decade.” The study was undertaken by students in the Master of Engineering Management programme, led by executive-in-residence Vivek Wadhwa, research scholar Ben Rissing and sociology professor Gary Gereffi.

Ramakrishnan Balasubramanian, part of the research team, said that among the surprises was the “fact that Indians are way ahead of the Chinese in terms of the number of companies in the Silicon Valley and Bay area”.