And how its entrepreneurs will transform India —and the world

VIVEK

WADHWA

Distinguished Fellow Singularity University

Fellow, Rock Center for Corporate Governance, Stanford University

Director of Research, CERC, Pratt School of Engineering, Duke University

Columnist Washington Post, Wall Street Journal, Forbes, ASEE Prism, LinkedIn

Twitter: @wadhwa

Increase from 800-2000 startups by 2020? —this is not “hyper growth”!

India shouldn’t be succeeding at all based on the data

China numbers are suspect – inconsistent data collection, unrelated degrees.

2006 data

© 2008 Vivek Wadhwa

China numbers are suspect – inconsistent data collection, unrelated degrees.

2006 data

2006 data

India is rapidly becoming next global center of research, design and innovation: Pharmaceutical

Drug discovery, specialty pharmaceuticals, biologics, high value, bulk manufacturing, advanced intermediate manufacturing

Aerospace In-flight entertainment, airline seat design, collision control/navigation control systems, fuel inverting controls, first-class cabin design

Consumer Appliances/Semiconductors, etc. Design of next-generation washing machines, dryers, refrigerators, digital TV, cell phones, automobiles, tractors, locomotive motors India racing ahead in R&D, despite its weak education system

and graduation rates

50% of engineering graduates not employable IIT’s graduate less than 5000 engineers Country has weak infrastructure and weak education Yet: Tip of the iceberg: In 2007, top 5 IT companies hired 120,000 engineers.

Accenture and IBM India added 14,000 each. India is racing ahead in becoming a global R&D hub

How? India adopted the best practices of its Guru (the U.S.) and perfected these

The disciple became the guru

Company 2004 2005 2006 2007 2008 2009P CAGR

Accenture (India only) 9,953 16,014 23,186 36,852 41,500 43%

HCL 16,358 24,090 32,626 42,017 51,038 62,435 33%

Infosys (including subsidiaries) 25,634 36,750 52,715 72,241 91,187 102,838 37%

Satyam (excluding subsidiaries) 14,032 19,164 26,511 35,670 45,969 53,878 35%

TCS (including subsidiaries) 33,774 45,714 66,480 89,419 111,407 133,837 35%

Wipro 28,502 41,857 53,742 67,818 82,122 98,092 30%

0%

5%

10%

15%

20%

25%

2004 2005 2006 2007 2008

HCL

Infosys

Satyam

TCS

WiproAttrition Rates

Accenture global attrition rate 2008 – 18%, U.S. It services industry norms – 15-30%

Now let’s go to America

Tech and engineering companies founded from 1995-2005:

• 25.3% nationwide had an immigrant as a key founder

• 52.4% of Silicon Valley startups founded by immigrants

• 2005 revenue -- $52 billion. Employed 450,000

• Indians founded 26% of these -- more than the next 4 groups (from U.K, China, Taiwan and Japan) combined

WIPO patents:

• 25.6% had foreign national authors in 2006. Increased from 7.6% in 1998

• 16.8% had a Chinese-name and 13.7% had and Indian-name authors in 2006. Increased from11.2% and 9.5% in 1998

Legal, educated, skilled workers currently waiting for green cards as of 2007—many more now

500,040 in main employment-based visa categories plus 555,044 family members 259,717 intl. grad students plus 38,096 in practical training (includes postdocs)

Permanent resident visas available yearly: 120,120 in the three main employment visa categories (EB-1, EB-2, and EB-3) Largest numbers in queue from India and China Max. number of visas per country – 8,400 (7% of pool)

1—1.5 million skilled immigrants waiting for yearly quota of 120,000 visas – with 8,400 max/country

Average age of Indians – 30, Chinese – 33 Indians – 65.6% masters, 12.1% PhD’s. Chinese 51% masters,

40.8% PhD’s…primarily in management/STEM 26.9% Indians, 34% Chinese were U.S. perm. residents/ citizens Indian senior management positions increased from 10.2% in

the U.S. to 44.1% in India and Chinese increased from 9.3% in the U.S. to 36.3% in China

More than half plan to start businesses in home countries

2.5%

10.5%

34.1%

37.5%

14.2%

1.2%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

60 - 69

50 - 59

40 - 49

30 - 39

20 - 29

0 - 19

Percentage of all Respondents

Fou

nd

er

Age

24.9%

69.9%

4.5%

0.7%

Single Married Divorced/Separated Widowed

40.3%

16.4%

28.0%

11.0%

3.4% 0.9%

0 1 2 3 4 5

Average Number of Children Marital Status

High School Diploma or

Lower, 5.9%

Bachelors, 44.0%

Masters, 31.0%

PhD, 10.0%

Associates Degree,

Certification, Some College,

2.3%

MD, 3.8%

JD, 3.5%

Highest Completed Degree

Applied Sciences*,

9.0%

Engineering 27.6%

Mathematics 1.5%

Computer Science,

Information Technology

9.0%

Business, Accounting,

Finance, 33.4%

Healthcare, 5.5%

Arts, Humanities and Social Sciences,

2.8%

Economics, 1.8%

Law, 4.2%

Other, 4.6%

Fields of Highest Degree

STEM Fields 46.5%

0

10

20

30

40

50

$0

$1

$2

$3

$4

$5

$6

$7

$8

All Startups Startups w/ an Ivy-Leauge Founder Startups w/ a High School Founder

Ave

rag

e 2

00

5 T

ota

l Em

plo

ye

es

Ave

rag

e 2

00

5 S

ale

s (M

illi

on

s o

f U

SD

)

Average 2005 Sales Average 2005 Employment

What makes the difference is higher education: not the degree or school

1.2

2.9

3.2

1.7

3.1

1.4

3.0

3.1

2.1

Couldn't find traditional employment

Working for someone else didn't appeal

Wanted to build wealth

Co-founder encouraged to start company

Wanted to capitalize on a business idea

Developed a technology in lab

Startup company culture appealing

Always wanted own company

Entepreneurial friend or family role model

1= Not important factor, 5 = Extremely important factor

7.8%

17.8%

64.4%

16.9%

14.2%

12.3%

14.6%

7.3%

Other

Friends and family

Personal savings

Business partner(s)

Venture capital

Private/angel investor(s)

Bank loan(s)

Corporate investment

1.3

1.7

2.2

2.5

3.0

3.2

3.2

3.3

3.3

3.8

4.0

4.1

4.4

Assistance provided by the state/region

University/alumni contacts/networks

Advice/assistance provided by company investors

Location

Personal/social networks

Your university education

Availability of financing/capital

Professional/business networks

Good fortune

Company's management team

Lessons you learned from your previous failures

Lessons you learned from your previous successes

Your prior industry/work experience

1= Not at all important, 5 = Extremely important

Now lets look forward

Take 30 steps…

LINEAR

01 02

03 04

05 06

07 08

09 10

11 12

13

30 meters

Source: Goodbye Linear Thinking by Peter Diamandis

Difference between linear and exponential

01 02 04 08 16 32 64 128 256 … 1,073,741,824 meters

26X around the Earth!

Take 30 steps…

EXPONENTIAL

Ca

lcu

lati

on

s/S

ec

pe

r $

100

0 c

om

pu

ter

Moore’s Law —5th paradigm of exponential growth

The exponential growth of

computing on a Logarithmic Plot

Ca

lcu

lation

s p

er

Se

co

nd p

er

$1

00

0

Year

2010

2023 2050

Calc./second for a $1000 laptop vs. time --Ray Kurzweil

Artificial Intelligence, Medicine, Robotics, 3D Printing, Synthetic Biology,…

As any technology becomes an information technology, it

starts advancing exponentially -- Ray Kurzweil

In other words, everything is becoming an I.T.

It is not just computing…also

1976 – 1st Digital Camera (Kodak) 0.01 MP / 3.75 lbs / $10,000

2014– Mobile Digital Camera >10 MP / 0.03 lbs / $10

1000x Resolution 1000x Lighter 1000x cheaper

1000,000,000 x better

1,000x Resolution & 1,000 lighter & 1,000 cheaper

Steven Sasson

Credit: Peter Diamandis

Early ICBM Navigation Inertial Measurement Unit 1960’s – $ Millions – 50 lbs Velocity/Orientation/Accel.

Accelerometer: $1

Gyroscope: $3

1st commercial GPS Receiver in 1981 Weight: 53 lbs; Cost: $119,900

Single Chip GPS Receiver 2010; <$5 each

2006 data

Micro-Electro-Mechanical Systems (MEMS): miniaturized mechanical and electro-mechanical elements made with microfabrication.

Source: MEMS and Nanotechnology exchange

2006 data

Would have cost hundreds of thousands of dollars and weighed 100 lbs+ just 30-40 years ago

What Santa promised What Santa delivered

Computing power required for voice and face recognition, sophisticated movements…and speech

Price, weight, limitations of sensors for 3D vision, motion…

Until now

Cheaper now to manufacture some goods in U.S. than China Source: The Everything Robotic blog by the Robot Report $32,000 Wall-Ye from Burgundy, France

Credit: Neil Jacobstein

Doctors can’t keep up, so IBM Watson is going to medical

school

Source: Eric Green, NHGRI, Current Topics in Genome Analysis 2012

Create uniqueness

design like nature

Create for the body

Increase complexit

y to reduce

cost Optimize for performance

Credit: Scott Summit

Sometime in the 2020s

Mary Meeker, KPCB Internet Trends 2013

—sub $50 smartphones

India has 875.48 M cell phone subscribers (10/13) Only 29 M land lines

Cisco estimates number of mobile-connected devices exceeds number of people on Earth

Cellphones revolutionized communications, changed

lives.

Imagine what Internet-enabled tablets will do

Credit: Statistica. Source: Apple, Google

www.wadhwa.com Twitter: @wadhwa

Tens of thousands entrepreneurs building health sensors, robots, drones, commerce, infrastructure tools

Hundreds of thousands app builders solving local problems

Millions of Internet businesses

Billions—world wide—benefiting from Indian innovation