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News Updates - 17 April 2001 Boot camp for engineers - Forbes magazine More Bangalore for their bucks - Business 2.0 Trolling for brains - Washington Post Boot Camp for Engineers The elite Indian Institute of Technology trains winners - for the U.S. as well as India. The six campuses of the Indian Institute of Technology admitted just 2% of applicants last year; Harvard College took 11%. At the elite Indian engineering colleges students must attend 42 hours of lectures and lab classes each week, twice as much time as the typical MIT undergraduate spends in class. And while the University of California system may stop requiring SATs for admission, the Indian Institute would not dream of lessening its total reliance on tests. The 150,000 applicants each year must first pass exams in chemistry, physics and mathematics before they can sit for a second set of grueling analytical tests. The 20,000 who make it to the second test stage compete for 3,000 entry spots. Those with the highest scores get first pick of majors. They usually choose computer engineering. "It is like salmon swimming upstream. If you get there, there must be something in you," says Umang Gupta, (class of 1971), chief executive of $50 million (sales) San Mateo, Calif.-based Keynote Systems, a Web site monitoring company. So it's no surprise that graduates of the Institute have come to play such a prominent role in American business, and not only at tech companies. The alumni roster includes Sun Microsystems cofounder Vinod Khosla, Juniper Networks founder Pradeep Sindhu, Sycamore Networks founder Desh Deshpande, Telcom Ventures founder Rajendra Singh and Cirrus Logic founder Suhas Patil. But United Airlines President Rono Dutta, McKinsey & Co. Chief Executive Rajat Gupta, Citibank Co-Chief Executive Victor Menezes, US AirwaysChief Executive Rakesh Gangwal and Providian Financial Chief Executive Shailesh Mehta are also grads.
The intense winnowing process guarantees those admitted to the Institute are smart and hardworking. Then the boot-camp-like atmosphere toughens them for business battle. "Most IITians don't have a problem dealing with cut-throat corporate America,'' says Gupta, who wrote Oracle's first business plan. "If anything, their problem is toning down some of their aggressiveness." Toning down? For Oracle? Consider: Exams are held every four weeks. No feel-good American-style pass/fail or grade inflation here; some professors give only one "A" on each exam. At the end of the semester, students are publicly graded in each class. "I was at IIT nearly 30 years ago, but just last week I woke up sweating in the middle of the night dreaming that I was back in IIT sitting for one of those killer exams," admits Sudhakar Shenoy, chief executive of McLean, Va.-based IMC, a software services company. Despite the competition, the pressure breeds a sort of battlefield camaraderie. And the tight-knit IIT old boys' (yes, it's almost all boys) network gives a big boost to Indian entrepreneurs in the U.S. Example: Graduate Kanwal Rekhi sold Excelan, a computer networking company, for $200 million in 1989. Since then he has invested in a dozen companies founded by other IIT grads. Rekhi has an open-door policy for would-be entrepreneurs. Despite such benefits, most American teens would never put up with the Indian Institute's grueling regime. Indeed, the children of some of India's wealthiest citizens happily head to the U.S. instead, for more relaxed undergraduate studies. But for working-class and middle-class Indians a diploma from IIT, which charges just $600 a year tuition (up from $10 in 1990), is a passage to affluence, in India or abroad. Each year about 40% of graduates head to the U.S. for graduate school. "Our name has huge brand equity in educational institutions everywhere in the world," says Prem Vrat, former director of the IIT Delhi campus. "A delegation from Germany's top five universities has been pleading with us to send our students there," brags Amitabha Ghosh, director of IIT Kharagpur. Japanese, French and Australian universities have courted grads, too. Those graduates who head straight to work also have plenty of offers. In the U.S. they can command starting salaries of $50,000. IBM, Intel, McKinsey, Sun Microsystems and Teligent have all recruited at the Indian schools. The Institute holds a proud spot in the country's history. India's first prime minister, Jawaharlal Nehru, set up the first campus in 1950 to churn out engineers to build big public works and infrastructure projects. That first school was housed in a former British jail. Today, six sprawling tree-lined campuses are spread across the country. Living conditions, spartan by Western standards, are better than at other Indian universities. (Room and board is just $33 a month.) More than 100 students share two common phones in each residence hall. Still, the Delhi campus has a 2,000-person stadium, a meditation center and a little-used recreation center. Professors live on campus, too, creating an intense, if insular, educational experience. George Verghese, a professor at the electrical engineering and computer science department at MIT, finds that IIT students' "knowledge base tends to be less broad but much deeper [in their specialties] than that of MIT undergraduates." When IMC's Shenoy entered graduate school at the University of Connecticut, he was quickly assigned to teach math to a group that included some of his graduate student peers. "That's when I realized how rigorous our math training at IIT had been," he says. Indeed, the Institute has become so respected that it now risks falling victim to its own success. With top graduates getting juicy offers from abroad, fewer stay for graduate studies at IIT. And professors, unhappy over the dearth of top graduate students and salaries of just $6,000 a year, are being lured away, too. Recently, at the Delhi campus, 14 of 30 computer science professorships sat vacant. But the Institute and its determined graduates are fighting back. Alumni have started raising money for faculty perks and expanded programs. Excelan founder Rekhi, for example, gave $5 million to fund professors' research and travel and to build a new information technology school at the Mumbai (formerly Bombay) campus. Meanwhile, IBM and Indian software companies have set up offices at some schools, allowing faculty and students a chance to make some extra cash without leaving their campus. "As India moves into the 21st century, its technologists will play an even more important role,'' says Keynote Systems' Gupta. "IIT is crucial to India's future.'' More
Bangalore For Their Bucks Last year's expansion of the H-1B visa program lets U.S. tech companies recruit even more workers from India. Indian companies are also in on the action. In Congress, they called it the American Competitiveness in the 21st Century Act. But the federal law enacted last year that extends and significantly expands the guest-worker program for skilled citizens of other countries could just as aptly have been dubbed the Indian Software Developers Competitiveness Act. That's because technology firms based in India-or U.S. tech firms run by Indian nationals-make up 10 of the top 25 companies to have snapped up H-1B visas. With 600,000 additional H-1Bs to be doled out during the next three years under the new law, Indian-owned and Indian-run firms operating in the United States will have an inside track on the next group of highly proficient, English-speaking tech workers to arrive from the Asian subcontinent-and thus a stronger competitive position against the U.S. companies the new law was designed to assist. U.S. high-tech heavyweights-including Microsoft, Oracle, Intel, Cisco Systems, and Motorola - use their fair share of workers brought into the country on H-1B visas, 43 percent of whom were from India in the time period covered by the most recent U.S. Immigration and Naturalization Service report. Early
warnings That argument certainly resonates with many U.S. tech workers, whose anti-H-1B diatribes scorch online tech-job bulletin boards. But it carried little weight in Congress, where the H-1B extension measure sailed through the Senate last fall by a 96-1 vote. And top-tier U.S. technology firms certainly don't seem concerned about an Indian takeover of the H-1B program. Quite the contrary: Not only are they hiring droves of visa holders, but also they are farming out growing volumes of increasingly sophisticated work to the Indian companies that use the program. Microsoft Chairman Bill Gates, for one, has been to India twice in the last several years-the most recent being last fall to celebrate his company's 10-year anniversary of doing business there. During that trip, Gates announced that Microsoft (No. 6 on the H-1B users list) has formed a "strategic global relationship" with Bangalore, India-based Infosys Technologies (No. 14) to jointly work on Windows 2000 and Microsoft.Net solutions. Not to be outdone, Nortel Networks executives visited Bangalore six weeks later to announce that Infosys will set up a "wireless center of excellence" for their company. 'Vendor
of the Year' The company now has 22 centers in India dedicated to specific corporate clients, including Hewlett-Packard (HP), Lucent Technologies, Nortel, Ameritech, and General Electric. Most Tata Consultancy employees, tied in with the rest of the world through the Internet and videoconferencing facilities, never need to leave India. But with several thousand H-1B visa holders on its payroll, Tata has the luxury of being able to station large teams of software developers in its clients' offices as well as in its own facilities in the United States. Its customers certainly seem grateful for the services provided. The Indian consultancy has collected "Vendor of the Year", "Best Business Partner of the Year" and "Best Commodity Supplier" awards from a host of U.S. companies, including Oracle, Target, and GE. Computer consulting firms in the United States are considerably more ambivalent about Indian firms that have latched on to the H-1B program than the Microsofts and Nortels of the world. After all, they are the ones directly threatened by the specter of cheaper-but-just-as-sophisticated Indian competition. Mark Rothman, president of Myta, an IT staffing firm in Rockville, Md., shares the dread of competition with many other National Association of Computer Consultant Businesses (NACCB) members. He has hired plenty of H-1B holders to fill his own company's ranks with skilled workers, but he fears that if too many visas are handed out "the overseas companies will come in and overtake everything." He "hates it" when offshore development centers in India "can do the job at half the price and they take some of my business away." And yet Rothman says he has to conclude, "If they can do high-quality work cost-effectively in India, more power to them. If we're not good enough, and we get our butts kicked until we get better, we should get better quicker." If Tata's local recruitment efforts prove successful, the Indian firm will create new jobs in the United States even while it ships other jobs to India. Indeed, that is already happening on a major scale, says Kailash Joshi, a former IBM executive and president of The IndUS Entrepreneurs (TiE), a Silicon Valley-based group of successful business executives born on the Asian subcontinent. TiE estimates that the combined market capitalization of companies founded by Indo Americans is as much as $200 billion. "It is a massive number of jobs that we have created. The Indian connection was an important part of that value creation," says Joshi. The H-1B program is a natural outgrowth of globalization, which benefits everyone, Joshi insists. "If having Indian resources and knowledge workers as part of a company makes it more competitive, I say so be it," he says. "Everybody has access to the same workers. Intel has them. Cisco has them." And if companies find that it is cheaper to ship the work to India, "that is the nature of the beast," Joshi says. "When I was at IBM, we moved manufacturing out of the United States on a mass scale when we found out that we could not compete. Companies that are international, that's what they are going to do."
THE world is a global marketplace. Money flows like water across national borders, creating a perpetual motion machine of investment, development and wealth creation. Theoretically, it is a system in which everybody wins. The global market for knowledge and expertise, by contrast, has developed far less rapidly, and thus far has produced only one big winner: the United States.Information technology (I.T.) generates about a third of the economic growth in this country with just five million workers, said Dr. B. Lindsay Lowell, director of research at Georgetown University's Institute for the Study of International Migration. And over one million of those people are foreign born. India for example, may have the world's largest diaspora of scientists. IndUS Entrepreneurs, a group whose members include the leading Indian software engineers in Silicon Valley, estimates that 30 percent of the software engineers there are of Indian origin. And AnnaLee Saxenian, an economist at Berkeley, has used a Dun & Bradstreet database to count 750 Silicon Valley companies run by Indians. ON the other side of the ledger, though, India itself appears to have benefited enormously from its far-flung citizens. The worth of India's IT exports has catapulted, to $4 billion in 2000, from just $150 million in 1990. And the Indian government projects that by 2008 that number will be $85 billion. "The fact that all these Indians are here is enabling massive changes which are beneficial to India, and also beneficial to the U.S.," said Dr. Jagdish Bhagwati, an economist at Columbia University, who is a special advisor to the United Nations on globalization. Sheer wealth and unmatched research infrastructure continue to make the United States the Mecca of scientists and engineers. Data from the National Science Foundation show that, except for a brief dip mid- decade, students from the top exporters of talent in Asia enrolled in American graduate programs in increasing numbers during the 1990's. Last year, some 75,000 were here from China and India alone. The most recent figures also show there are about 20,000 students here at any given time from the three largest European exporters, Germany, Britain and France. AS the market for brains tightens, the United States could come to regret its reliance on foreign talent at the expense of educating its native born, said Dr. Lowell of Georgetown. "In the short to medium term, the U.S. makes out like a bandit," he said. "In the medium to long term, the outlook is questionable, even for the U.S." |
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