In my consultations with state governments, I was struck by how the Indian diaspora is already clearly on their political radar. This will only grow as the diaspora itself becomes more politically active. In this, Australia over the next 20 years may well move along a Canadian path where Indo-Canadians are prominent in all political parties and hold high ministerial positions. A politically active Indian diaspora will inevitably create an additional incentive for Australian state and federal governments to be seen as active in promoting the bilateral relationship.
It is important to acknowledge that the Australian Indian diaspora is not one cohesive whole. Much like India's complex society, it is made up of diverse sub-groups, state and community associations. It may not naturally self-organise in a way that maximises its political or economic leverage, complicating engagement.
This chapter sets out the current disposition of Australia's Indian diaspora, how this relates to international experience, and what more Australia could do. There are four themes that emerge around which to focus efforts on leveraging the diaspora.
The Indian diaspora in Australia is not yet sufficiently prominent in our leading industry sectors or business associations. It can't yet play a significant role in mobilising confidence to expand trade and investment with India.
Over 8 per cent of Australia's population is born in Asia – a much higher percentage than in other Anglophone countries – yet only around 4 per cent of Australia's top 200 publicly listed companies have board directors of Asian heritage.130
Australian companies with 'Asia capable' workforces, including migrant representation at all levels of the organisation, are rare. Indeed, 67 per cent of ASX 200 board members show no evidence of extensive experience operating in Asia, while 55 per cent demonstrate little to no knowledge of Asian markets. Those that do claim immersive experience in Asia overwhelmingly rely on time spent in Singapore and Hong Kong, two markets consistently ranked at the top of the World Bank's Ease of Doing Business index.119
But this is not to presuppose that only large listed companies have a role to play. Most Indian diaspora businesses in Australia are SMEs, and they too have the capacity to be meaningful drivers of economic integration with India. It has been estimated that within three years, around 66 per cent of SMEs in countries like Australia could derive at least 40 per cent of their revenue from outside their country of operation131 – so the key is to ensure that SME growth occurs in exportable sectors of the economy.130
Indian postgraduate student numbers are on the rise in Australia, but most are enrolled in masters by research courses in oversupplied fields. Indeed, we may be seeing Indian students leaving their undergraduate STEMM qualifications. Australia needs to do more to promote its academic excellence.
There is a positive feedback loop between greater bilateral research collaboration and Indian perceptions of the quality of Australian educational institutions. Between 1993 and 2013, India was one of the top three source countries for Australian academics (the other two being the United Kingdom and China). Indian diaspora researchers play a disproportionately large role in Australia's collaborative efforts with India – 60 per cent of the Australia-based authors of scientific publications co-authored by researchers in India and Australia were of Indian descent. So the current enrolment bias among Indian students towards masters by coursework degrees is likely to limit the future of research collaboration between Australia and India.
India puts a large effort into working with its diaspora. It no longer considers overseas migration of Indian skilled professionals as 'brain drain', but rather as a 'brain circulation' that enhances India's global image and contributes to 'brain gain' in India through innovation, investment, and business expansion. India's professional diaspora is regarded as innovative 'opportunity entrepreneurs'132, who forge links, invest in, and mentor high value technology ventures between their countries of residence and origin. The diaspora are now seen as integral to India's growth story and there is strong receptivity within India to a 'diaspora forward' engagement strategy.
The AIBC, the leading current diaspora business organisation, has limited presence among peak industry bodies in India and Australia. While it serves as a representative body for the Indian business diaspora and participates in bilateral trade delegations, it does not have an explicit advocacy strategy to promote diaspora presence and leadership in the key chambers of Australian commerce and industry. It has not yet developed a profile of diaspora entrepreneurship in Australia's competitive industry sectors or coordinated with Indian counterparts to attract Indian mid-size enterprises to invest in tie-ups in these sectors. The 2018 AIBC constitutional amendments should help drive change over time.
More could be done in Australia to incubate and mentor diaspora entrepreneurs in fields where Australia has a competitive edge. The IndUS Entrepreneurs (TiE) group has a proven track record assisting entrepreneurs of Indian origin in the United States with mentoring, incubating, networking and venture capital financing. TiE chapters exist in Australia, but they maintain a low profile. Another useful focus for engagement will be diaspora professional groups, including a number that already exist in the professional services.
The Indian diaspora in Australia lacks presence and influence in higher levels of state and federal politics, policymaking, universities, large corporations and peak industry bodies.129 Australia needs to do more to encourage diversity in these areas. Increasing political representation in Australia on the part of the Indian diaspora will be a potent driver of the bilateral relationship.
India has the largest diaspora population in the world, with over 13 million Indians living outside the country and 17 million people of Indian origin spread across 146 countries.98 They range from long-standing populations in places like the Caribbean, Fiji, South and East Africa and Malaysia, to the very large numbers now building the Gulf States.
The Indian diaspora of the United States, United Kingdom and Canada comprise a relatively small proportion of total population, but they have emerged as powerful economic players in their own right and in their ability to strengthen economic ties with India.
Each of these countries has experienced a surge in the migration of highly skilled Indian professionals and students with tertiary and higher educational qualifications since the 1990s, and has nurtured this talent and its potent advocacy for enhanced economic ties with India.
In general, the Indian diaspora in these countries are recognised for contributing to innovation and entrepreneurship, competition, economic growth and job creation.
In particular, their prominence in leading industry sectors and establishment of dynamic professional and business associations has helped build trust and understanding to expand trade and investment with India. They provide insights into India's business norms, cultural landscape and language diversity, and facilitate connections with state governments and industry bodies. They lobby their governments for stronger political and business alliances with India and promote frequent visits, delegations and conferences across government and industry. And their diverse perspectives help support the uptake of new technologies and processes.
There are common factors that contributed to the emergence of Indian diaspora as powerful economic players in the United States, United Kingdom, Canada and Singapore:
Source: Australian Bureau of Statistics (AU). 2016 Census. Canberra AU: The Commonwealth of Australia; 2016.
Source: Australian Bureau of Statistics (AU). 2016 Census. Canberra AU: The Commonwealth of Australia; 2016.
As with experience in comparable countries, the Indian diaspora in Australia is highly educated, employable and wealthy. The initial track of Australia's Indian diaspora story mirrored the experience in other countries, but the employment of Indian migrants over the past decade has charted a different course.
The introduction of the Migration Act in 1966 enabled larger numbers of Indians to migrate to Australia.128 As elsewhere, Indian immigrants to Australia in the 1960s and 1970s were mainly highly-qualified professionals in well-paying jobs in medicine, engineering and business. Many who came on Colombo Plan scholarships to study in Australian universities subsequently returned to settle in Australia and pursued successful careers.
During the 1980s and 1990s, Indian engineers and IT specialists arrived under the skilled-migrant program and settled to pursue careers in the country's emerging knowledge-based economy.
Source: Australian Bureau of Statistics (AU). 2016 Census. Canberra AU: The Commonwealth of Australia; 2016.
In Australia, skilled migration and education-related migration from India increased dramatically between 2006 and 2016, more than doubling the numbers of the India-born population123, making the Indian diaspora a relatively young community compared to the United Kingdom, Canada, Singapore and the United States. It's clearly no coincidence that this expansion mirrored the period of significant labour shortages during the mining construction boom – spread roughly equally between professional and non-professional sectors.
An analysis of where the Indian-born population was employed, and in which sectors they are building businesses, provides an indication as to whether we are truly maximising the potential of this community as a driver of Australian growth and innovation.
As we would expect, employees of Indian origin were broadly distributed across the economy during the period of low unemployment generated by the mining boom.
The success of the Indian diaspora in Silicon Valley and their contribution to the successful growth of the Indian IT industry has been globally recognised by scholars and policymakers. They are regarded as the exemplar for industry and diaspora-induced economic development that mutually reinforces growth in trade, investment and knowledge-exchange between the two countries.
Silicon Valley and Bengaluru rose synergistically. From the onset of Silicon Valley's rapid growth, it became a destination of choice for Indian technology graduates, many of whom remained in the United States after obtaining their degrees and rose to senior positions in leading Silicon Valley technology firms. In 1986, the Indian Government introduced the Computer Software Development and Training Policy which liberalised access to technology and software tools, invited foreign investment, and supported access to venture capital. It invited leading industry professionals of the United States Indian diaspora to advise the Department of Electronics and to invest in the development of the Indian software industry. The diaspora professionals actively contributed to policy reform in areas of Indian telecommunication regulation, science and technology policy, reform of educational institutions and capital markets. This led to the growth of Indian software solution companies such as TCS, Infosys and Wipro.
Diaspora professional associations such as the Silicon Valley Indian Professional Association and The Indus Entrepreneurs played, and continue to play, a significant role in this. They helped forge a common, pan-Indian identity in the United States. They served as mentors for Indian engineers studying and working in the United States and played a key role in ensuring international quality and performance standards, including providing new business contacts and new markets in both countries. They collaborated with Indian industry organisations like CII, NASSCOM and IIT Alumni Associations to celebrate technology entrepreneurship in the United States and India. They played an important role in mobilising their networks to raise venture capital and functioned as angel investors for start-ups and social enterprises. And the dynamism of the United States Indian diaspora in founding engineering and technology companies in turn proved a major attraction for Indian investors in United States industry.
About 30 per cent of India-born employees were in food and accommodation services, retail and wholesale trade, and transport services; roughly 10 per cent work in manufacturing, agriculture and construction sectors. Just over 50 per cent were employed in professional, managerial, and technical service occupations, with the main industry categories for India-born employees being IT systems design and enabled services, accountancy, medicine and health services (Figure 32).
The major change between 2006 and 2016 in sectors of employment for Indian-born employees was a decrease in those employed in manufacturing and an increase in those employed in health care and social assistance.
Source: 1) Australian Bureau of Statistics (AU). 2016 Census. Canberra AU: The Commonwealth of Australia; 2016. 2) Australian Bureau of Statistics (AU). 2011 Census. Canberra AU: The Commonwealth of Australia; 2011. 3) Australian Bureau of Statistics (AU). 2006 Census. Canberra AU: The Commonwealth of Australia; 2006.
The story of missed opportunity is more stark in the Australian diaspora's entrepreneurial journey. Australia's Indian diaspora shows the same entrepreneurial spirit demonstrated elsewhere. Between 2006 and 2011, businesses owned by Australia's India-born population rose by 72 per cent, compared with a 40 per cent increase for those born in China. However, as Figure 32 shows, the sector experiencing the most significant growth in Indian diaspora entrepreneurship between 2006 and 2016 was the transport, postal and warehousing sector. While embracing the entrepreneurship and personal drive that has seen the surge in self-employment in this sector – this is clearly not going to drive Australia-India economic integration.
The trends in Australia's student intake from India show a similar missed opportunity. Indian students form the second largest international cohort (15 per cent) in Australian universities, following students from China (34 per cent). The numbers of Indian international students in postgraduate courses in Australian universities have been growing rapidly since 2014. However, masters by coursework is by far the most popular option for Indian students (70 per cent), followed by bachelor degrees (22 per cent), and has been growing rapidly since 2014. Only 2 per cent of Indian students in Australia pursue doctoral degrees.
Most of those enrolled in masters courses graduate in oversupplied fields140, rather than in programs focused on advanced fields, technologies and economic sectors where Australia has a global edge. The top four preferred fields of higher education for Indian students are: Management and Commerce (48 per cent), IT (24 per cent), Engineering and Related Technologies (11 per cent), and Health (6 per cent).
Indian students comprised a similar proportion of global international students in the United States (13.6 per cent), but this is maintained at doctoral level (14 per cent of all temporary student visa [F–1] holders pursuing doctoral degrees) and about 80 per cent were enrolled in STEMM majors (MPI, 2017). According to the Survey of Earned Doctorates, 85 per cent indicated their intention to stay in the United States upon completion of their studies – a significant injection of intellectual firepower.
Significantly, 70 per cent of a representative sample of Indian students enrolled in post-graduate study in Australia in 2016 and 2017 had undergraduate qualifications in STEMM. We need further research to determine whether these students ultimately return to STEMM careers, or whether these skills are lost to the Australian economy.
Current enrolment biases among Indian students towards masters by coursework degrees present a risk also to the future of research collaboration between Australia and India.
Between 1993 and 2013, India was one of the top three source countries for Australian academics (the other two being the United Kingdom and China). In 2014, 30 per cent of all postgraduate researchers were international students, with the figure higher in the STEMM disciplines of engineering (54.2 per cent), information technology (51.5 per cent), agriculture and environment (45.6 per cent) and natural and physical sciences (36 per cent).
Source: Australia India Institute. Working Paper Commissioned for the India Economic Strategy.
Source: Australia India Institute. Working Paper Commissioned for the India Economic Strategy.
In the decade to 2017, joint research papers between Indian and Australian researchers have doubled, indicating increased collaborations. Unsurprisingly, Indian diaspora researchers play a disproportionately large role in Australia's collaborative efforts with India. Of all scientific publications co-authored by researchers in India and Australia, a large majority of the Australia-based authors (60 per cent) were of Indian descent. Enhancing the reputation of our education system and building collaborative research and innovation ecosystems between Australia and India depends on a pipeline of high-performing students and academics.
There is no noticeable correlation between the overall growth in trade with India and increase in migrants from 2006 to 2016 (Figure 35). Certainly, there appears to be no direct relationship between Australia's major exports to India and the industry categories in which Indian migrants have been employed during this period.
There may be some correlation between India's exports to Australia and the movement of professional staff generating these exports. Around 30 per cent of Indian exports to Australia comprise services, of which 'professional, technical and other business' make up one-third. This services export category most likely correlates with the rising numbers of Indian migrant employees and entrepreneurs, particularly between 2011 and 2016, categorised under professional, scientific, and technical services (see Figure 32; mostly in IT and business solutions).
Source: 1) Australian Bureau of Statistics (AU). 2016 Census. Canberra AU: The Commonwealth of Australia; 2016. 2) Department of Foreign Affairs and Trade (AU). Services Trade Access Requirements Database. Canberra AU: The Commonwealth of Australia; 2017
Australia tends not to use its domestic diaspora groups strategically to advance its foreign policy and trade interests. This must change. The opportunity is ripe for Australia to capitalise on its Indian diaspora, which should be seen as a national asset in the bilateral relationship and deployed accordingly.
The challenge for the Australian Government is fine-tuning the settings across immigration, education, foreign and trade policy to leverage the Indian diaspora. In a broad sense, the settings are performing well. Australia ranks 6 out of 100 countries on the ability to grow, attract and retain talent.141 The fact that migration has delivered an economic dividend for Australia is in large part due to policy settings which favour migrants of working age who have the necessary skills to contribute to the economy. In any case, there are limits to what government can do to some of the settings that are inherently demand-driven, for example, the temporary skilled migration program.
However, the government should deepen its engagement with Australia's Indian diaspora as a resource to advance economic links and build transnational networks for trade, investment and innovation.
We need to shift our thinking about the diaspora away from the multicultural narrative, important as that is, and towards seeing the Indian diaspora as a network which can open doors, help navigate Indian business culture, enhance the community's understanding of contemporary India and contribute to Australian public diplomacy in India.