Bangalore's brain drain

perspective In mid-2007, 20 years after he went to the United States to work, Madan Moudgal made the journey back to Bangalore.

For Moudgal, a healthcare technologist who grew up in the city, it was a homecoming. He wanted to be close to his elderly parents. He wanted to spend quality family time with his wife and their two school-going children who returned with him. He wanted to figure out firsthand what was happening in the 'new' Bangalore.

A few months ago, Moudgal spun his Bangalore connection into an opportunity. He launched a start-up Trignon Business Consulting with two other returnees. Trignon is an advisory service helping healthcare and retail companies in India and overseas maximize value for their outsourced work.

Bangalore is buzzing with an entrepreneurial spirit, Moudgal says--it has people with ideas and talent. Companies can start up on modest budgets, hire talented young people and take advantage of the ecosystem.

Over the last few years, thousands of bright, go-getting immigrants like Moudgal have left the United States to go home, especially to India and China. These returnees are the subject of a study America's Loss is the World's Gain released earlier this month by researchers at Berkeley, Duke and Harvard universities in collaboration with the Kauffman Foundation.

In India, the world's second fastest growing economy after China in recent years, the economic resurgence has created a demand for high-tech skills and brought exciting career opportunities. Immigrants have long-fueled innovation and economic growth in the United States. One in four technology and engineering companies started between 1995 and 2005, and 52 percent of Silicon Valley startups were founded by immigrants.

But the United States is no longer the only land of opportunity, says lead researcher Vivek Wadhwa, a tech entrepreneur-turned-academic.

The study said immigrants were flooding home to enjoy a better quality of life and better career prospects while being close to their family and friends.

Moudgal is a prime example. He candidly says he could not have conceived returning but for these changes back home.

The Moudgal family lives in St John's Wood, a residential high-rise in the Koramangala suburb of Bangalore, so named because it was built on land that belonged to the missionary hospital nearby. Other communities have 'Riviera' and 'Vista' and 'Manor' appended to their names, denoting comfort as well as appealing to the aspirations of the Westernizing middle class.

St John's Wood, like many new communities dotting Bangalore, bustles with returnees like the Moudgals. With landscaped lawns, swimming pools, squash and tennis courts, recreation areas for children, supermarket and services on call, these communities offer a haven for those transitioning from the West, buffering them from the chaos in the streets outside. "I feel like I am marooned in an island," he said.

Moudgal who spent the big chunk of his career as a healthcare technologist in the consulting firm EDS says the return has not been without its share of frustrations.

The numbing noise, traffic and pollution have made Bangalore less livable than when he left in the 1980s. "There is no discipline on the roads," he complained.

Starting up in Bangalore has its share of annoyances, too. In structuring a contract, for instance, Moudgal found that unlike in the West, you cannot pull templates off the internet and modify. "You need a local angle and the process is complicated," he said.

Traditional thinking still exists in the start-up environment. Accepting equity instead of a salary or breaking away from the hierarchical structure is not mainstream. "People who are not in your employ and moonlighting may not deliver on their promises," Moudgal said, adding: "Not all workers are self-starters".

But the pull of cities like Bangalore will get stronger for many Indian immigrants in the West, especially given the current global economic turmoil, Moudgal predicted. "Many people who may not otherwise have risked a move back home are now willing to take that plunge."

He himself is an American citizen and does not foresee living in India permanently. His plan is to stabilize the startup and then move to the United States to focus on business development.

Saritha Rai is a business and technology writer based in Bangalore, India. This article was first published on ZDNet Asia's sister site, Silicon.com.