On the surface, India is a tech player’s dream destination.
Indians have made outsized contributions to Silicon Valley: Among the unicorns—private startups valued at over $1 billion—founded by immigrants, most were led by Indian-origin entrepreneurs. Over two-thirds of H-1B visas issued every year go to Indians. Major US-based tech giants such as Amazon, Uber, and Adobe, too, have all looked to tap the growing Indian market.
So when Vivek Ravisankar, co-founder and CEO of technical recruiting platform HackerRank, was considering the best places for tech companies to expand their engineering teams in, he intuitively looked at India. Ravisankar himself came to the US from India in 2012 when Y-Combinator chose to incubate his startup. He and his co-founder Hari Karunanidhi are alumni of the National Institute of Technology (NIT), Trichy, in Tamil Nadu. Although HackerRank is based out of Palo Alto, the company’s Bengaluru office is an indispensable part of the team. Its own online coding challenges revealed that Indian institutes dominated the list of universities with the top coders in the world.
However, surprisingly, India fared poorly, ranking 26 out of the 28 major global tech hubs evaluated in HackerRank’s April 06 report (paywall).
The coding recruitment platform rated each country on nine factors: corruption perception, english-language proficiency, competition for talent from other tech companies, average salary, rent, taxes, internet speed, STEM grads, and skill. Overall, Singapore topped the list because it had “the lowest taxes, fastest internet & exceptional talent.” Last year, the Singaporean government committed $19 billion towards R&D and the local engineering ecosystem, while Google expanded its office in the city-state to 1,000 engineers.
While India ranked fourth for its supply of cost-efficient engineering talent, it ranked 19th on skill sets as the quality of its talent is questionable. Besides, it isn’t going to stay cheap forever. “The developer cost, the executive cost, was supposed to be at least 50% (compared to Silicon Valley). Now it’s like 75%. And it’s not going down, it’s only going up,” says Ravisankar. India is also at the bottom on corruption and taxes. Moreover, the time difference with the US doesn’t make life any easier.
Most importantly, India is the worst when it comes to the internet.
An Economist Intelligence Unit study of internet inclusiveness ranked India first among 75 countries on policies to ensure connectivity. However, network availability and quality in the country were deeply flawed. A 3Q 2016 Akamai report says India’s 4.1 megabits per second (Mbps) average internet speed is Asia’s slowest. Frequent power cuts in pockets of the country and a sizeable chunk of the population—240 million—lacking power supply, only add to the chaos.
Where to go
As the Trump administration clamps down on immigrant workers, companies in the Valley—the biggest tech behemoths and up to 19,000 startups—will probably seek innovation hubs outside the US. Even otherwise, the region is approaching saturation.
HackerRank designed an interactive tool that lists the top countries for users based on parameters that matter to them. “Large companies like Google or Facebook might care less about cost than a startup. Smaller, more agile companies may prioritize cost-effectiveness and skill level to hire developers who can start coding on day-one,” the report states. “If you’re anticipating overseas collaboration, then low corruption levels and language barriers could take priority.” For instance, despite its shortcomings, a company that values cost savings above all might find India favourable due to the low rents and cheap labour costs here.
The following are HackerRank’s top five countries for collaboration, cost, and talent, and their rankings in the sub-categories used to determine them.
|4. New Zealand||17||1||3|
|3. The Philippines||2||13||8|
While these locations show promise, Silicon Valley remains a class apart. “I think Silicon Valley is still one of the best places to start a company because of infrastructure, for things like Y-Combinator, and other investors,” says Ravisankar. “People there have solved the social network problem. People have built YouTube, people have built Paypal, people have built Square.”