In his early 20s, Romesh Wadhwani arrived in the United States with just a few dollars in his pocket. With a bachelor’s degree from the Indian Institute of Technology in Bombay, he entered Carnegie Mellon’s graduate programs with the entrepreneurial bent of so many Indian-born students studying in American colleges and universities.
Now, the billionaire Wadhwani is channeling his wealth toward helping South Asian students with company-building aspirations like himself.
The 2012 Forbes 400, which ranks the wealthiest people in the nation, has its fair share of of entrepreneurs who hail from India and came to the U.S. with very little. Among them are the $1.5 billion mind behind 5-hour Energy, Manoj Bhargava, as well as technology pioneers-turned-venture-capitalists Vinod Khosla (net worth: $1.4 billion) and Ram Shriram (net worth: $1.6 billion). The wealthiest of them all, Wadhwani (net worth $1.9 billion), understands India’s potential for entrepreneurial winners. In fact, he’s betting on it.
The founder and chairman of the Wadhwani Foundation, Wadhwani made his fortune creating business software firms. He has devoted the majority of his fortune to create jobs and foster entrepreneurial talent in the world’s second most populous nation. Wadhwani, who recently signed the Bill Gates and Warren Buffett Giving Pledge, says he’s committed to hand over 80% of his wealth to his foundation out of an ”obligation to give back” to his birth nation. As of June, his foundation had more than $100 million in assets, according to Wadhwani.
“When we started the foundation, right from the beginning it was clear that we were not just going to give $10,000 here and $50,000 here and let 10,000 flowers bloom,” he says. “We had the opportunity to grow companies at scale. It’s not just important to apply money, but to apply effort and money, and we began by picking a few initiatives each of which could achieve significance of scale.”
Among those initiatives are goals such as training entrepreneurs, building research centers, creating opportunities for the disabled, affecting joint India-U.S. policy and offering career-based training programs, part of the foundation’s five-pronged approach all focused on improving the economic outlook and employment situations of India and other developing nations. According to a report from India’s Ministry of Labour & Employment for last year, the unemployment rate for the country was estimated to be 3.8%, while labor force participation rate–the ratio of of the working-age population who are working or are unemployed and looking for jobs–was 52.9%. The most recent figures for the U.S. in August placed the nation’s unemployment rate at 8.1% and the participation rate at 63.5%.
While India’s reported unemployment rate is much lower than the United State’s figure, Wadhwani says that India still has a “jobs crisis.” He points to the high number of unskilled workers without college or even high school degrees that can’t find work because of their educational backgrounds. Among one of the biggest focuses of the Wadhwani Foundation, he says, is the development of a network of community and skills colleges in conjunction with India’s Ministry of Human Resource Development.
“Over 10 million high school students from 10th, 11th and 12th grade drop out of high school every year and several million drop out of first or second years of college programs,” Wadhwani says. “Most end up becoming contract laborers earning a few dollars a day and live truly horrible lives often in the slums of India… It’s a big opportunity for our foundation to help create a skills development initiative… to focus on skills and careers education rather than college.”
While the Wadhwani Foundation is focused on developing individuals for certain occupations, its founder also hopes to create jobs as well. It’s established biotechnology and cardiac research centers in Mumbai and Bangalore with the intent, says Wadhwani, of fashioning India into a viable place for R&D.
In that same vein, the foundation’s longest-running initiative, the National Entrepreneurship Network, is centered on the idea of job creation through the promotion of entrepreneurship within South Asian schools. Founded in 2003, NEN has now exists on 600 campuses and involves some 1,200 faculty members with the goal of helping young minds find ways to establish companies. Wadhwani estimates 15,000 to 25,000 jobs have been created already through the network and hopes that figure can rise to 100,000 in the next five years.
“A lot of people think of India, and they think it’s so entrepreneurial,” says NEN cofounder Laura Parkin, pointing to successful Indian-born entrepreneurs. ”But just like everything else in India, that’s true and false at the same time. There’s [self-employment]… but what you didn’t have is that opportunity driven entrepreneurship that we see here and take for granted here, where an educated middle class person decides to walk away from a job and start something.”
About two-thirds of new jobs come from newly started companies, says Parkin. “If you’re missing that class of people, you’re missing a lot of economic growth.”
Wadhwani is exactly the type of person Parkin is referring to. From his days as a Carnegie Mellon grad student, whose first stateside entrepreneurial endeavor was a dormitory canteen peddling junk food, to the founder and CEO of $2.5 billion (revenues) private equity technology group Symphony Technology, Wadhwani is the archetype of the minds that Indian universities need to find and foster within the country’s borders.
“Romesh doesn’t change his personality when he’s going from business to philanthropy,” says Parkin. “He doesn’t become the hands-off person that gives money away and feels good about it. He’s passionate and goal-focused.”