India’s Diasporic Dividend

India’s Diasporic Dividend

November 2, 2014 | Author: Dr Hemant Kanakia, CEO Kanakia Ventures

The Modi government has ushered in a new reality in Indian Politics. A promise of a clean and efficient government and focus on economic development creates the right environment to ask what we, as non-resident Indians, can do to help India. In the last two decades, countries such as Israel, Taiwan and China with large diasporas, have learnt how to effectively utilize this diasporic power. India can do the same. Not only does India have one of the largest diaspora – by some accounts as large as 30 M  – many have now reached pinnacles of power in the business, scientific and academic world. That India has so far failed to take advantage of her diasporic dividend is attributable to a shortsighted focus on remittances and investments rather than attempts at harvesting intellectual contributions of the diaspora. With the recent change of government, perhaps it is time now to examine existing obstacles and ways to navigate around them.

 

On the whole, the country is moving in the right direction with respect to improving responsiveness of bureaucracy and restarting big infrastructure projects. The changes being made are as yet small but will add up over time. It may take time to show appreciable benefits. The federal structure of India and the fact that some important large states are still led by dynastic rulers, with ample scope for corruption, dissuades NRI’s from participating in the economic development agenda. In spite of these difficulties, I believe there are opportunities to enlist help from NRIs.

 

After having spent nearly four decades in USA, first as an entrepreneur and later as a venture capitalist, I have spent the last few years in India building up an ecosystem for entrepreneurship. During this stint, I have noticed a few things that could be helpful to interested NRIs.

 

One of the most important points to note is India has always made progress by individual initiatives and not by government ordained top-down plans, as is the case with Singapore, Taiwan, or China.

 

The second point is that India has a surfeit of economists, social scientists and social activists and it seems to the author that NRI participation is redundant in those areas. However there is a dearth of capable people in STEM – Science, Technology, Engineering and Management disciplines. Considering a whole generation of well-trained young engineers and doctors have migrated to the US and UK in search of a better life and career since the 1960’s, this is hardly surprising. This has created a vacuum of sorts, particularly, in positions of power, in policy circles, research centers, universities and industries.

 

In order for any help from the diaspora to be effective, two major structural problems need attention. Politicians and career bureaucrats, who run the government of any nation, find it difficult to locate the right group of experts with a selfless desire to serve the country. In USA, this problem is partially mitigated by strong professional bodies with established peer-to-peer evaluation traditions. These groups serve as a conduit to identify the right group of experts enabling the government in making policies relevant. In India, the absence of such groups has led to government seeking help from experts who are either good at self-promotion or whose strength lies in deep networks within the bureaucracy rather than domain knowledge. Another problem arises because many NRIs have developed the sensibility that works in a mature democracy and free market ideology developed in the West over a long period of time. This sensibility and philosophy sometimes leads NRIs to apply their domain knowledge to wrong problems or to right problems with wrong solutions for India.

 

To overcome the above-mentioned difficulties we need a more organized effort among NRIs: developed from within. The problem of identifying the right experts with a genuine and self-less desire to help is best solved by creating a committee of 100 eminent personalities in the US and UK. This group, in which membership should be based on recommendation, should bring together NRIs with influential professional positions, either past or present, in STEM related industries as well as successful NRI entrepreneurs and venture capitalists.

 

This group is essentially a brain trust playing several roles. It would be a filter for identifying domain experts able to help as and when called upon by the Government of India. As advisors, the group can help India avoid pursuing development of Industries with marginal utilities and / or a high probability for failure. For instance, when it comes to manufacturing electronics items in India, it is better to focus on Indian design talents and encourage fabless semiconductors or Original Design Manufacturing (ODM) industry.  The previous government’s focus was on semiconductor fabrication factories, an industry with high capital requirements, fewer jobs and a high probability of failure in India, due to the lack of infrastructure.

 

The group should also play an advocacy role. It can suggest how incentives and regulatory laws will attract or repel NRI migration back to the homeland on a short-term or long-term basis. The group can also identify best technologies that address major problems affecting economic development and well being of Indians such as education, pollution and healthcare.  Help can be offered to migrate these technologies to India.

 

Another task of this committee can be to work towards creating a favorable perspective of India in US and European circles – press, political leaders and industry leaders. That would also mean needing to combat the cynical and self-fulfilling pessimism shown by many NRIs about the progress India is making and is capable of making.

 

The creation of this group should not be seen as an impossible and herculean task.  In the past NRI’s have been able to create groups such as TiE and Pan-IIT organizations. They have a different agenda but nonetheless serve as a model and beacon of hope for NRIs to unite and create this committee of 100. Such a group will give NRIs a significant role to participate in India’s economic development in the coming decade.