The Golden Diaspora

By Anthony Spaeth/New Delhi

When Manoj Night Shyamalan was growing up in suburban Philadelphia in the 1980s, his parents--both immigrants from India, both physicians--piled on the pressure. "There was simply an assumption that I'd come first in my class," he recalls. He was also expected to follow his parents into medicine. When he told them he would instead study moviemaking at New York University, they were horrified. Now they feel a lot better. In 1997, five years after his graduation, Walt Disney Studios paid Shyamalan $2.5 million for the screenplay of the Bruce Willis thriller The Sixth Sense and let the young writer direct the movie as well. The ghost tale has earned more than $680 million worldwide since its release last year and garnered six Academy Award nominations. "If it hadn't grossed $100 million," he laughs, "I don't know what my parents would have done."

Shyamalan, 29, did not win an Oscar on March 26, but he has carved out another leading role for himself, as one of America's premier success symbols for 722,000 Indian immigrants and guest workers scattered across the country. And he is only one among many. Today South Asian immigrants are climbing the top rungs in just about every industry.

Indians are running FORTUNE 500 companies (Rono Dutta is president of United Airlines, and Rakesh Gangwal is president and CEO of U.S. Airways) or, as consultants and securities analysts, telling others how to do so. (Calcutta-born Rajat Gupta, managing director of consulting giant McKinsey & Co., does both.) But above all, they are bringing their own entrepreneurial stamp to America's high-tech frontiers. Venture-capital fund Kleiner Perkins Caufield & Byers, one of Silicon Valley's biggest VC firms, says 40% of its portfolio consists of companies founded or managed by people of Indian origin. Indians have one of the highest per capita incomes of any immigrant group in the U.S. "It is a credit to this country that someone from a distant land can become an American," says Suhas Patil, founder and chairman emeritus of semiconductor manufacturer Cirrus Logic (1999 revenues: $564 million), who is now running an incubator company called Tufan, Inc. for Internet start-ups. "I am what defines America."

The Indian success story is a triumph of quality over quantity. According to the Center for Immigration Studies in Washington, an independent think tank, the U.S. is home to about 26.3 million immigrants, defined as people living in the U.S. who are foreign born and have permission to stay permanently. India's 722,000 is less than the number from the Dominican Republic. Some 15,000 to 20,000 Indians get student visas to the U.S. each year, and many manage to land jobs after graduation and stay on. But Japan gets three times that number, and South Korea double. The only category in which India really leads immigration statistics is the number of people granted H1B visas for "workers with speciality occupations." Indians take about 20% of all H1B visas issued each year, by far the largest proportion.

Other numbers tell an even more intriguing success story. Only 6% of Indian immigrants live below the poverty line, vs. 31% of Mexicans and 8% of immigrants from Britain. Fewer than 1% use public assistance.

While there has long been a trickle of immigration from South Asia, the big change came in 1965 when U.S. immigration statutes were liberalized to attract scientists and engineers to work in an American economy revved up by the Vietnam War. They fanned out to aircraft companies, NASA, military contractors and universities. Doctors were needed for President Lyndon Johnson's Great Society medical programs, and they were given preference too. Fewer than 2,000 people immigrated to the U.S. from India in the decade of the 1950s; in the '60s, 27,189 arrived; by the '80s, the number had jumped to a quarter-million. The immigrants often took jobs Americans had turned down because the pay was low or the location remote. "There would be an opening for a surgeon in Champagne, Ill.," says Fareed Zakaria, a Bombay-born academic who is managing editor of the prestigious quarterly Foreign Affairs, "and an Indian would take it."

Then came the Silicon Valley boom, which shows no sign of letting up. As a result of all these circumstances, the Indian diaspora in the U.S. tends to be the intellectual and commercial elite. According to the Center for Immigration Studies, only 3% of Indian arrivals lack a high school education, and 75% of working Indians are college graduates. (For immigrants from China, the figure is 55%.) Says Rajini Srikanth, a professor of Asian-American studies at the University of Massachusetts: "What we got were people who already came blessed with all kinds of valuable baggage." In many cases, the Indian schools that newcomers had attended were as good as or better than many of their U.S. counterparts.

Strong family ties also have helped. Vijay Goradia, who emigrated from Bombay in 1977 and now has a private petrochemical business in Houston with more than $600 million in revenues last year, says he could afford to take the entrepreneurial plunge because two brothers had preceded him to the U.S. and served as his safety net. "It gives you the spirit to be free, to take chances," he says.

Yet at the same time, people from the subcontinent have tended to aim more than other first-generation arrivals for mainstream jobs, either in the professions or in corporations. Some of that is a hangover from British colonial experience, where a job in the civil service was the ultimate badge of accomplishment and security--a sentiment still strong on the subcontinent. More positively, Indian immigrants say they fit into corporate America because they already speak English.

According to AnnaLee Saxenian, an associate professor of city and regional planning at the University of California, Berkeley, about one-third of the engineers in Silicon Valley are of Indian descent, while 7% of valley high-tech firms are led by Indian ceos. Some successes are well known, such as Vinod Khosla, co-founder of Sun Microsystems, and Sabeer Bhatia, who founded HotMail and sold it to Microsoft for $400 million. The number of Indian American New Economy millionaires is in the thousands. Massachusetts' Gururaj Deshpande, co-founder of a number of network-technology companies, is worth between $4 billion and $6 billion.

Bigger changes loom with the second generation: the kids are sure to have ingrained Indian values but a world view completely at odds with their parents'. Dilip Massand, co-founder of Masala.com an Internet site for the second generation that he hopes to build into a "virtual diaspora," was raised from the age of six months in the New York City borough of Queens. Massand remembers going to makeshift Hindu shrines in people's basements. "The Catholics had beautiful churches, and the Jews had elaborate synagogues," he recalls. "I remember asking myself why our gods lived in a basement."

It remains to be seen whether those successful Indian Americans can go back to kick-start opportunities in their native land, in the way that a "reverse brain drain" of technical talent helped build Taiwan's computer industry in the 1980s and '90s. K.S. Ramakrishna, raised in the southern state of Karnataka, got an M.B.A. from Ohio's Case Western Reserve University in 1990 but was forced to return home when his family business near Bangalore ran into difficulties. He straightened out the firm--it makes electric cables--but was disgusted by the local business culture: the complacency, corruption and lack of vision.

But Ramakrishna persevered. He started his own business, growing roses for export, and senses that further opportunities abound. "For me to start up a business in America, I'd have to come up with some brilliant idea," he says. "Here it's so simple: you find an idea abroad, modify it for Indian conditions, and you make money." The crowning achievement of the Indian diaspora may be that its members bring that same entrepreneurial spark back to life in their homeland.

--Reported by William Dowell and Romesh Ratnesar/New York, Barry Hillenbrand/Washington, Chandrika Narayan/Dallas and Jacqueline Savaiano/Los Angeles

With reporting by William Dowell and Romesh Ratnesar/New York, Barry Hillenbrand/Washington, Chandrika Narayan/Dallas and Jacqueline Savaiano/Los Angeles