However, despite the downturn in the financial ecosystem, state lockdowns also had an advantage; the pandemic has prompted companies around the world to increase their investments in their respective digital infrastructure. The IT sector accounted for 8% of India’s GDP in 2020, which is a substantial increase from its contribution of 1.2% in 1998. In 2019-2020, India occupied the position of the largest business destination. supply in the IT-BPM industry globally.
According to Gartner’s forecast, IT spending in India will rise to $ 98.5 billion by 2021. With the imposition of home isolation due to the pandemic, more and more people have started to access digital services from their homes. To make ends meet, the IT industry has consistently responded to these demands by providing online services to businesses.
“India is poised to create massive job opportunities in the IT / BPM sector, through technologies such as citizen development, AI and the cloud”
The resulting demand and confidence in the industry has enabled companies like Cognizant, Infosys and Wipro, Tanla Solutions and HCL Tech to expand into digital as well as increase their revenues. In addition, Tech Mahindra grew by 39.2% with net profit of Rs 1,353.2 crore for the first quarter of fiscal year 2021-2022. Wipro experienced 22.3% revenue growth with Tata Consultancy Services growing 18.5%.
According to the latest Naukri JobSpeak report, the Indian labor market grew 57% year-on-year in September. The IT / software sector in particular grew 138 percent (year-on-year). In addition, with the thickening of the tech intervention and the gradual post-covid reopening, the retail and hospitality sectors also saw their hires increase by 82% and 70%, respectively. As digital innovation grows, the scope for job creation and acquisition will also increase.
Equipped with one of the largest developer communities in the world and growing diversification into sectors such as BFSI, retail and telecommunications, India has also been able to receive major investments from other country. According to the Software Technology Park of India (STPI), software exports also saw an increase of 7%, from $ 62.82 billion in 2020 to $ 67.40 billion in 2021. The software and software industry Computer hardware has undergone FDI inflows worth $ 71.05 billion over the past 20 years. On top of that, it accounted for 44% of the total FDI inflows of $ 81.72 billion in 2021. Large Indian companies have also provided innovation hubs and research centers with blockchain and artificial intelligence.
“For tech cos, the key to success will remain their ability to respond to market needs in real time”
Some notable international collaborations include Infosys’ recent partnership with Archrock, Inc, which is a renowned supplier of natural gas compression services based in the United States. Infosys plans to increase the efficiency of its field service technicians through the assimilation of digital tools. Apart from this, Tata Consultancy Services also decided to continue its 17 year collaboration with Virgin Atlantic in the UK, digitizing the airline’s operations.
In addition to digital services and cloud computing spearheading IT innovation, the growth of India’s software as a service industry has been predicted to hold immense potential to further our economic progress. McKinsey and SaasBoomi reports predicted that this industry will be worth $ 1 trillion by 2030. Indian SaaS companies like Freshworks and Salesforce are just two of many Indian SaaS companies, startups and unicorns.
“SaaS startups should develop solutions for underserved segments. They should invest in an appropriate GTM strategy rather than focusing only on technological elements. “
Last year SaaS companies received investments worth around $ 1.5 billion. The relatively low cost of hiring in India, the growing preference for software engineering and the abundance of developers in this field could eventually lead India to dominate the industry in a few years. However, the commitment to strengthen the discipline is still lacking, given that the Indian startup community has a long way to go to be seen as competitive enough against foreign startup ecosystems like Silicon Valley.
According to a report by Bain & Company, some Indian SaaS companies like Browserstack and Chargebee have been on par with US SaaS companies in capital efficiency. Obviously, Indian SaaS companies are of immense interest in various VCs.
The growth of the IT sector must be supported by encouraging government initiatives and policies. The government has already taken various steps in this direction with the introduction of industry-oriented skills development. In 2020, it released guidelines on ‘other simplified service providers’ (OSPs) to keep the IT industry running smoothly, as well as BPO and IT services. In 2021, it launched innovation platforms to drive the growth of globally competitive AI manufacturing and construction.
“India is a geography that will benefit from computing power. From farmers to the pharmaceutical industry, SAAS-based models are the answer to many of India’s needs ”
The development of advanced computing (C-DAC) also introduced technologies such as the automatic parallelization compiler, the cybersecurity operations center and the parallel development environment (ParaDE). Apart from this, the Indian government plans to develop Biotech-PRIDE (Promotion of research and innovation through data exchange) as well as our MoU with the government of Japan is also oriented towards further development. 5G and telecommunications security.
“By accelerating Campus to Corporate, making tax breaks for capital investments easier and clearer, the government can further stimulate growth in the industry.”
Digital interventions in the telecommunications sector have already taken the step towards increased technological potential. Telecom organizations are working on operational integration of business intelligence and analytics, automation of customer experience and relationship management, use of IoT, ML and Big Data to enable smart infrastructure and cloud migration. As we saw during the Covidian waves, technological interventions in health infrastructure and fintech have also been immense. Against the backdrop of such providential developments, IT companies can only accelerate this move towards digital.
“The pandemic has caused the emergence of certain sectors which have shown a constant increase. Tech companies should focus on these sectors ”
As McKinsey stated, India’s IT industry has the potential to acquire a turnover of 300-350 billion dollars by 2025. In addition to this, we can also imagine that BPM represents 50 to 55 billion dollars of this global turnover. As the pace of immunization accelerates and the economy tracks its rapid path to recovery, the IT industry is required to support these advancements and innovation. The IT industry has illustrated its commitment and preparedness despite the disruption caused by the two consecutive waves of COVID-19. Even if a possible third wave could slow this momentum, a greater reliance on digitization could persist, helping the sector to prolong its growth and foster job creation.
“The third wave, if it does occur, will have even minimal effect as we have been implementing the teachings of the past eighteen months. The IT industry is well equipped to maintain and accelerate our growth. Dr. Harsh Vinayak, Senior Vice President, Intelligent Automation and Data Services, NTT DATA