Look what Trump is trampling on: Indian entrepreneurism

Indian entrepreneurism in the United States has gradually evolved from technical leadership to business leadership as many migrants have successfully started their ventures. Indian immigrants have founded more engineering and technology companies than immigrants from the UK, China, Taiwan and Japan put together. Studies indicate that Indian immigrants are more likely to start ventures in the technology sectors when compared to their US counterparts. The American government has well-acknowledged the contributions made by Indian immigrant entrepreneurs to the US economy.

According to a 2016 study by the National Foundation for American Policy, India leads the list of immigrant founders of billion-dollar companies in the US, which are together valued at $19.6 billion. Of the 44 immigrant entrepreneurs identified in the list, 14 were from India, that is, 30%. These immigrant-founded start-up companies excel at job creation in the US and across the globe. Indian immigrant founders, through their companies, generated more than 12,000 jobs in 2016 alone.

Some of the leading Indian companies generating employment in the US include Mu Sigma, founded by Dhiraj Rajaram, valued at $1.5 billion, with more than 3,500 employees; App Dynamics with more than 900 employees and valued at $1 billion, founded by Jyothi Bansal; Nutanix with more than 860 employees, co-founded by Dheeraj Pandey and valued at $2 billion; Zscalar, started by Jay Choudhary, with more than 600 employees and valued at $1 billion; Jasper, founded by Mohammad, with more than 425 employees and valued at $1.4 billion; Zenefits, founded by LaksSrini, with more than 1,500 employees and valued at $4.5 billion; Bloom Energy, valued at $ 2.9 billion, with 1,200 employees founded by
Sridhar.

Other companies such as Instacart, Sprinklr, Actifo, etc, initiated by Indian entrepreneurs and which are valued at $1 billion or more employ more than 2,000 people. It is estimated that, at this pace, if the immigrant entrepreneurs are supported by a start-up visa policy, which was proposed during the Obama administration, there is a possibility and potential for creation of between 1-3.2 million new jobs over the next 10 years in the US.

Dhiraj Rajaram of Mu Sigma, an Indian multinational data analytics company, was born in Chennai and brought up in Bengaluru. He graduated from Booth School of Business, Chicago, and later worked as management consultant at PricewaterhouseCoopers (PwC) in the US and with Booz Allen Hamilton in India.

After quitting his job from Booz Allen Hamilton, Dhiraj started Mu Sigma in 2004. He was named ‘Entrepreneur of the year’ in 2014, and Mu Sigma was listed in 2012 among America’s fastest-growing private companies.

Ragy Thomas, founder and CEO of Sprinklr, earned his MBA from Stern School of Business, New York University, and his computer science engineering degree from Pondicherry University. Ash Ashutosh started Actifio in Massachussets, US, with just four employees in 2009. Actifio now works with global enterprises such as IBM, Sunguard, HBO, Netflix, Dell, etc.

The achievements of the immigrant founders through their companies are commendable despite their share of constraints and impediments. Founders recognise that it can be quite difficult for foreign-born entrepreneurs to sustain and grow their business in the absence of a reliable immigration system or start-up visa which can enable the foreign national to navigate the US immigration and legal system. Now, the new restrictions and low quota available on H-IB visas can hinder start-up companies in hiring skilled labour.

Jyoti Bansal has been profiled as one of the outstanding immigrant entrepreneurs. He waited nearly eight years for his employment-based green card to start AppDynamics, which now employs more than 900 people and provides the equivalent of a “24/7 MRI” for company websites. Bansal told Forbes: “I was fascinated with the concept of start-ups and creation…..America has everything we need to create great companies here. We have great openness; we have a good legal structure and access to capital. But in technology, it’s all about talent. We need an immigration system that allows people to keep coming here.” Although the US economy encourages and promotes entrepreneurship in spirit, foreign nationals have difficulties gaining immigration status for starting a company.

The administrative reforms supporting the ‘start-up visa’, planned and proposed by the Obama administration in 2016, would have been a boon to Indian and other foreign-born entrepreneurs. It allowed foreign-born entrepreneurs to remain in the US for five years if they proved that they had significant stakes in a start-up company with the potential for revenue generation and job creation.

The Department of Homeland Security (DHS) estimated that about 2,940 immigrant entrepreneurs would be potentially eligible annually for visas under the International Entrepreneur Rule. According to Wharton management professor, David Hsu and immigration attorney Cyrus D Mehta of Cyrus D Mehta & Partners, an immigration law firm in New York, the rule had latent advantages in investments and jobs more than offsets or hitches, even if some percentage of fraud occurs due to people who game the system by creating fake companies.

However, the Trump administration seems to be putting a hold on the special immigration programme for foreign entrepreneurs as part of their new policy regime. As a result, the so called ‘start-up visa’ or the ‘International Entrepreneur Rule’, which could impact both India and America, remains a distant dream. Technology and business leaders from Silicon Valley have criticised the freeze and the possible elimination of the rule. Puru Vashishtha, a Silicon Valley based entrepreneur-investor and an alumnus of Stanford University, says that the start-up visa would have been a windfall for Indian students and technology entrepreneurs. He remarks, “Given the real shortage of tech talent in the US, this start-up visa would have been a great enabler.

It has the potential to take innovation to the next level. This move to cancel it is a big setback.” According to Vivek Wadhwa, an Indian-American technology entrepreneur, Trump’s policy to delay and ignore the ‘start-up’ visa is a ‘lose-lose’ and ‘brain-dead’ policy for America.

(The writer is Sr Assistant Professor, Xavier Institute of Management & Entrepreneurship, Bengaluru)