View from India: Tech industry net hirer during Covid
The pandemic, with all its disruptions, has staggered growth across several industries. The IT industry, though, seems to be in a different league.
At a time when the global output is estimated to have shrunk by 3.2 per cent, led by the 2020 pandemic, the Indian technology sector has rallied to grow at 2.3 per cent year on year. The growth can be attributed to the rapid acceleration in digital transformation and tech adoption.
The pandemic has urged the IT industry to increase their digital investments. Enterprises are re-balancing their technology investments to prioritise digitisation, while organisations are building their capabilities and aligning business models to digital processes much more than before. To that effect, up to 28-30 per cent of the industry revenues can be attributed to digital processes and investments. Another interesting Covid trend is the increasing impetus for pursuing the vision of Atmanirbhar Bharat (Self Reliant India), hence the domestic digital adoption intensified in 2020. The Indian domestic market, driven by hardware-led demand, has shown resilience and grown at 3.4 per cent during the year.
With an increased focus on innovation, India has witnessed more than 115,000 tech patents filed by companies in the last five years. Covid-19 has accelerated digital adoption across industries and technology service providers are witnessing a sharp growth in digital deals.
Indian tech has contributed 8 per cent relative share to the national gross domestic product, with 52 per cent relative share in services exports and 50 per cent share in the total foreign direct investment based on inflows for the period April to September 2020. Testifying to its growth, and despite the downturn, the Indian tech industry continues to be a net hirer with significant focus on digital upskilling. The industry is expected to add over 138,000 net new hires in FY2020-21, taking its total employee base to 4.47 million. The digital talent pool is expected to cross 1.17 million, growing at 32 per cent over the last year.
“Digital transformation is the topmost priority for global corporations and in a highly connected world that will remain largely contactless for an extended period, there are shifts in business models, customer experience, operations and employee experience. Our CEO survey for 2021 indicates that almost 70 per cent companies expect investment in global technology higher than the previous year,” said UB Pravin Rao, chairman at Nasscom.
As India stands at the cusp of a re-imagined 'techade', 2021 will re-define the industry narrative for the future. “As we look at 2021, while there are positives on the vaccination front and accelerated digitisation across verticals, the technology industry in India is well geared to build on these trends and continue its transformation journey in this re-defined techade,” said Debjani Ghosh, president of Nasscom, optimistically.
As we enter the new normal, however, analysts are cautiously optimistic, and technology is expected to drive front-end operations and customer experience. In the next normal, discussions with CEOs suggest the industry is warming up to a blended work model. A higher prevalence of remote work along with a boost in gig workforce can be the way ahead in 2021.
Interestingly, as the industry looks forward at leaner structures with more flexibility and faster adoption of cloud-based products and services in 2021, 60 per cent of the industry CEOs expect larger digitisation deals. Investments are anticipated in core sectors including banking, financial services and insurance, retail and manufacturing. Hyper-digitisation and technology adoption acceleration will happen across sectors. This year, the spotlight will be on the emergence of growth verticals like healthcare, pharma, medical devices, software and internet, along with consumer electronics.
In this hyper-digital economy, TRUST with the four cornerstones of competence, reliability, integrity and empathy, will be the single-most-important currency, leading the industry growth towards a better normal.
These key trends are part of Nasscom’s Strategic Review 2021 titled, ‘New World: The Future is Virtual'.
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