India, Inc.; No longer just an outsourcing hub for low-level jobs, India is luring top American talent and unprecedented new investments by tech giants like Microsoft and Intel.
Newsweek, Wednesday, December 14, 2005

By Vibhuti Patel

Dec. 14, 2005 - Erik Simonsen got his MBA at New York University, but the 28-year-old decided to go half a world away for his internship. He chose Copal Partners, a small technology company near Delhi over similar companies on the East coast and in Silicon Valley . "I was drawn to India because while U.S. markets are stagnating, so much is happening here," he explains. "It's a chance to re-experience the dotcom environment of the 1990s. Companies are growing so quickly here that opportunities to take on responsibility are greater." 

Simonsen is at the leading edge of an increasing number of science, business and technology students from elite colleges and universities heading to India, the world's third-largest economy, to get global experience. "Internships have become a big deal in the last five years and India is particularly attractive because of its huge language advantage," says George Day, a professor at the University of Pennsylvania's Wharton School of Business. "We can't just drop students into China—there's a language problem," says Day. "China is the big engine, but India is the place to ride the curve upward.”

Universities are responding to the demand for international experience, particularly in emerging Asian markets. Last summer, Yale president Richard Levin took a 12-member team to set up joint ventures with several Indian universities. The Ivy League school will send 30 interns over this year and expects to send 50 next year. It also has 30 faculty collaboration projects underway in a number of subjects ranging from public health, to management and forestry. And this year, Massachusetts Institute of Technology's India program, funded by the National Science Foundation, flew over 28 PhDs to pursue their research in science and economics. "MIT sends students because it's aware of our globalized world," says coordinator Deepti Nijhawan. "But it's a leap of faith."

As of last week, that leap looked a lot less risky. Within days of each other, tech industry giants Microsoft and Intel announced unprecedented investments in their Indian research and development facilities. On December 7, Microsoft chairman Bill Gates said that he was putting $1.7 billion into the company's operations in India over four years. About half of that amount will go to its research and development center in Hyderabad—Microsoft's largest campus outside its headquarters in Redmond, Wash. "India has emerged as the new Mecca for high-technology investments," said Gates at the opening of a sleek new facility in India's IT capital of Bangalore. A few days before Gates's trip, Silicon Valley chip maker Intel's chairman Craig Barrett announced that his company was investing $1.1 billion in India. And in October, Cisco Systems Inc. announced that it would put more than $1 billion into India over three years—its largest non-U.S. investment ever. A good chunk of that money, like Microsoft's investment, is going for the kind of innovative work that attracts world-class grad researchers and engineers, rather than the low-level call center jobs stereotypically outsourced to India. 

While research positions with American companies based in India may soon be a draw for American engineers, American students already in India are gathering professional experience with Indian companies. Thirty-year-old Tim Hentzel is an MBA student at the Wharton School of Business who first went to India in 2004 on his school’s three-week "global immersion" program. Infosys, an IT business and consulting services firm traded on the Nasdaq, piqued his interest because "their [106] interns come from all over the world—I needed the international experience." Infosys also appealed to him because their interns work on hands-on projects, are matched to mentors and have easy access to the company's top executives. Of his stint at the company's spa-like campus in Bangalore, Hentzel says, "it's the best decision I made. India's on the cutting edge." He says he put in long hours and made lasting personal and professional contacts because "I had gone to work, not for a safari." 

Navi Radjou, an emerging markets expert at Forrester Research, says those professional contacts are the reason that internships like Hentzel's are going to be more than just resume padding for the next generation of ambitious American managers. "If you ask General Electric, they'll tell you that 60 percent of their future revenues are going to be coming from emerging markets like India and China," he says. " If you are a young kid and you want to be top leader the in the future you'd better understand that other 60 percent. It's not just about having our companies trading with other companies, it's getting our people to connect."

MBAs aren't the only ones seeking professional experience in India. Emily Hueske, who is researching mutating proteins in mice for her PhD, spent two months at the National Center for Biological Sciences in Bangalore. "Our lab at MIT wanted to do the work that this excellent neuroscience lab is doing; I wanted to go because India's religion, food, culture are so different." She valued meeting Indian families, and the "real" people that casual visitors don't see. "It was the most solid work time I had with a specific goal. The lab is supremely set up—different from MIT because it's more conservationist, there's more recycling."

For Indian-American business and technology students, India's economic rise could be both a professional and personal boon. Samuel Varghese, a married 35-year-old, has an MBA from Duke University. He used to go "home" to India every year to visit family. When it was time to choose an internship, he went to Infosys "primarily because it was a good job opportunity, the company has tremendous growth," but also because "living and working there is different from visiting India." But Navi Radjou at Forrester says that to lure more Indian-American (and American) talent, India will have to improve its crumbling infrastructure. "If you want to build chip manufacturing facilities, you need good electricity, you need good roads to transport the chips. And if you want Indian expats to come back, they need decent schools and houses."
Even intrepid young managers like Simonsen took some time to get used to less-sophisticated living conditions. He was surprised to find that his base of Gurgaon, near Delhi, has "bars, shopping malls and world-class buildings in empty fields with wild dogs and pigs." The constant dust is hard to cope with, and he got sick. "It's welcoming and I'm flexible, but it's a huge change in lifestyle. I miss home comforts and [the] variety of food." 

Nonetheless, Simonsen says that the challenges are far outweighed by the chance to move up fast in a national economy that's growing at seven or eight percent a year. He started with Cobol Partners as an intern and within a month he was promoted to senior vice president of operations, in charge of IT, recruiting and administration. Simonsen was thrilled. "I'd never have got such responsibility in a U.S. company—Copal has grown 300 percent in manpower in six months. You have doubts from home, but once you're here, it's different."