In 2009, I moved to Silicon Valley to study immigrant entrepreneurship. As an immigrant myself, I wanted to understand why people like me were so successful at building technology companies in the US, and what the rest of the world could learn from this. At the time, Silicon Valley was still the center of the technology universe.
I was building on the work of UC Berkeley professor AnnaLee Saxenian, whose research fundamentally changed how scholars and policymakers understood global talent flows. Her research showed that immigrants founded roughly a quarter of Silicon Valley startups, led at the time by Taiwanese entrepreneurs, with Indians close behind. When I updated her work, I found that what began in Silicon Valley had become a nationwide phenomenon. Immigrants were founding about 25% of technology startups across the US, while their share in Silicon Valley had risen to 52%, with Indian entrepreneurs overtaking the Taiwanese and founding about 15% of the Valley’s startups.
All of this was happening as US immigration policy grew increasingly hostile and incoherent. Visas became harder to secure, green cards dragged on for decades, and the message to immigrant entrepreneurs was clear enough: Contribute, but do not expect to stay. I documented how these brain-dead policies were driving founders away and predicted that India and China would begin to rival the US in technology and innovation. The assumption was that returnees would lead this shift, a process Saxenian called brain circulation.
There is no doubt that the diaspora made a difference. Overseas Indians opened doors, invested capital, shared knowledge, and connected India to global markets. The returnees, including Sridhar Vembu, Kiran Mazumdar-Shaw, and Vani Kola, showed how global exposure could translate into entrepreneurial impact at home. I assumed that as more Indians returned, their impact as founders would only grow. And having moved the R&D operations of my own company, Vionix Biosciences, to India, I also assumed, with the usual NRI arrogance, that we brought something special to the table.
That assumption did not survive the data. In late 2024, Saxenian and I initiated a research project with our colleagues at the Indian Institute of Science in Bengaluru, with Professor MH Bala Subrahmanya and DPK Muthukumaraswamy, to study returnee entrepreneurs in India. This was meant to extend our earlier work at Berkeley, Duke, and Harvard. I expected it to confirm what we had been saying for years. Instead, it forced a reckoning. What our paper, just published by the Observer Research Foundation, shows is that returnees are simply not driving India’s entrepreneurial success; they are being outperformed by founders who never left.
India’s most successful technology entrepreneurs of the past decade are overwhelmingly homegrown. Founders such as Nithin Kamath, Vijay Shekhar Sharma, and Bhavish Aggarwal built category-defining companies without foreign credentials or Silicon Valley seasoning. They succeeded by understanding India deeply and executing relentlessly within its constraints. Our research revealed that, by nearly every meaningful business metric, startups founded by returnee entrepreneurs underperformed those founded by domestic entrepreneurs. The returnee-led startups raised less capital, achieved lower valuations, generated less revenue, and operated at a net loss, while domestically founded startups were profitable. The one consistent exception was employment. Returnee startups employed more people on average, which turned out not to be a virtue but a symptom of higher cost structures imported from capital-rich environments.
I was very surprised and turned to IT leaders, including Arjun Malhotra, Kris Gopalakrishnan, and CP Gurnani, to get their insights. They explained that domestic founders understand Indian markets, price sensitivity, regulatory friction, and the realities of scaling across a vast and uneven economy. They know how things actually get done in India because they have learned it the hard way, on the ground. Many returnees left India young, spent decades in structured and capital-rich systems, and returned assuming those operating models would translate smoothly. In reality, they don’t.
Frugality is the second difference. Domestic founders grow up conserving cash, controlling headcount, and reaching profitability early. These are survival skills in India. Returnees often bring habits shaped by abundance, including higher burn rates and longer runways, which quickly become liabilities. Seen this way, the results are not that surprising. Returnees often do well early, especially in fundraising, where foreign credentials help. Domestic founders are more likely to build companies that scale efficiently and profitably under Indian conditions. What works in Silicon Valley does not automatically work back home.
This has serious policy implications. Prime Minister Narendra Modi has repeatedly invited the diaspora to return, working from the assumption that India needs its returnees, as have leaders in China and elsewhere, often backed by tax breaks, preferential funding, and special programs. Some of these policies were inspired by Saxenian’s research. But even she acknowledges that the era of easy brain circulation is ending in a world shaped by nationalism, geopolitics, and tighter borders.
There are two lessons here. For India, the priority should be nurturing domestic entrepreneurs through better access to capital, regulatory clarity, and stronger research–industry links. For the US, this should be a wake-up call. It no longer has a monopoly on innovation and entrepreneurship. The world has learned what it needs to and moved on. When the US pushes talent away, it does not just lose people; it accelerates the rise of competitors who no longer need Silicon Valley’s permission.
Vivek Wadhwa is CEO, Vionix Biosciences. The views expressed are personal
