IIT: the Indian university shaping global tech

January 2022

Key points

The Indian Institutes of Technology account for a growing number of global tech leaders fashioning the digital future. Investment analyst Abhishek Parajuli explores why.

© Hindustan Times/Getty Images

Since Jack Dorsey stepped down as Twitter’s chief executive, a lot of ink has been spilt on his replacement: Parag Agarwal, the firm’s Indian-born ex-chief technology officer.

Parag joins a long list of Indians at the helm of US tech firms. There is:

  • Satya Nadella at Microsoft
  • Sundar Pichai at Google
  • Arvind Krishna at IBM


And that’s not to mention the founders or leaders of Adobe, Palo Alto Networks, VMware, Sun Microsystems and Match Group.

So, why do so many Indian leaders succeed at US tech firms?

There’s no simple answer, but it seems notable that many of them attended a single university network, the Indian Institutes of Technology (IITs). In fact, seven of the nine tech company leaders mentioned above, including Parag, graduated from an IIT.

The institutes are shaping technology globally despite being little known in the west.

The Wall Street Journal called them a ‘unicorn nursery’. And the network ranked fourth in the world after Harvard, Stanford, and the University of California in terms of the number of unicorns – private companies worth more than $1bn – created by its graduates.

That doesn’t surprise me. Almost every Indian start-up I have encountered personally – Delhivery, Flipkart, Zomato, Meesho, Swiggy, M-Fine, and upGrad, to name but a handful – was founded by an IIT grad. And a recent study found that of the 26 Indian companies that became unicorns in 2021, more than half their founders were IITians.


Vinod Khosla, co-founder of Sun microsystems and IIT Delhi alumni © Getty Images North America

Engineering the future

So, what are the IITs? And why are they so successful in producing tech leaders?

I spoke to a dozen alumni, professors, and administrators to find out. The story that emerges reveals as much about the university as it does about India’s digital future.

The IITs were born out of desperation. During the two centuries of British colonial rule, India’s infrastructure had been designed to carry raw materials to the shores and shuttle the British military to quell dissent among the Indian people.

The tools required for development – literacy, electricity, factories, and hospitals – were largely missing. As such, India needed engineers. And that’s where the IIT story began.

Over time, India has set up 23 IIT campuses that are run quasi-independently, like the colleges of Oxford or Cambridge. IIT graduates have touched every sphere of India’s development, from nuclear power and the space programme to public policy.

The IITs have also driven innovation outside of India.

IIT Delhi alumni Vinod Khosla co-founded Sun microsystems which, in turn, created Java, the computer language at the heart of everything from data science to video games.

And IIT Madras alumni Deepak Sekar’s salad preparation robotics firm Chowbotics was acquired by DoorDash last year. The US food delivery firm has said it will offer the technology to its merchants to help them grow their businesses.

Analytical thinking

There are three reasons why the IITs have produced so many tech leaders.

Firstly, their ability to identify India’s brightest minds. Admission is through a problem-solving exam, and in a country where inequality and corruption are often rife, this test is a rare equaliser.

Preparation for the Joint Entrance Exam, or JEE, is taken so seriously that there are even admissions tests for the best places to coach you for the exam. It takes years of monastic dedication to get in. In 2021, just 0.5 per cent of undergraduate applicants were accepted. That makes Harvard’s 5 per cent rate look generous.

The mere mention of an Asian standardised test can conjure images of rote memorisation.

In some cases, that happens. For example, China’s Gaokao university entrance exam.

But the JEE is a problem-solving test in which memorisation alone gets you nowhere. Thus, when hundreds of thousands of India’s smartest kids spend tens of thousands of hours studying for it rather than engaging in rote learning, they practise problem solving.

The cognitive psychologist Anders Ericsson famously proposed that mastery requires 10,000 hours of practice. His evidence wasn’t airtight, but to spend so much time studying is clearly better than using it to play Candy Crush.

The second factor that sets IITs apart is that they offer India’s best professors and facilities. Though the curriculum may be somewhat dated, it turns out that if you put thousands of bright kids together, they end up teaching themselves. As much learning happens in dorm rooms and cafeterias as in lecture halls and labs.

Thirdly, when IIT students graduate, the institution’s name opens doors and increasingly investors’ wallets. There are even funds that specifically target IIT grads. The alumni network has become a tech incubator that helps graduates start, fund, and scale their ventures.

Overall, by finding the very best minds and bringing them together to collaborate, compete, and grow, the IITs are helping India enter a new age of innovation.

Why should investors care?

There are two reasons why all this should matter to investors.

The first is nebulous but important. Almost every tech founder you meet in India will have gone to an IIT. Many of the policy makers and bank analysts you meet are also products of this system. Appreciating the most formative period of their lives helps you understand them better and connect with them on a more personal level.

Secondly, when it comes to investing in the Indian tech sector, the depth of talent in the IIT network should fill you with optimism about the future of digital India. As a country, India faces myriad challenges. But those challenges also present opportunities. Thanks to the IITs, the country has no shortage of sharp, driven minds capable of turning capital and computer code into socially useful and profitable ventures.

A boom in the technology sector alone might not be enough to propel India forward. No country, so far, has achieved middle-income status without cracking manufacturing. But the 21st-century technologies being pioneered at the IITs might offer India an additional, if not an alternative, ladder for growth. As the Modi government works hard to turn India into a global manufacturing hub, it should take heart from the fact that when it comes to producing world-class technology leaders, the country is already operating at scale.

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The views expressed in this communication are those of Abhishek Parajuli and should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect personal opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in January 2022 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

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