The Out­look

How are India’s top IT com­pa­nies gear­ing up to be a part of the na­tional vi­sion to be a $1 Tril­lion dig­i­tal econ­omy by 2023

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BE CAU­TIOUS, AHEAD! It is well known that India is the world’s largest BPM des­ti­na­tion. The rev­enue of IT and BPM in­dus­try in India is es­ti­mated to be reach $ 350 bil­lion by 2025, says In­vest India. The cur­rent size is said to be worth $177 bil­lion in 2019.

India is set to be­come a $1 tril­lion

dig­i­tal econ­omy by 2023, through gov­ern­ment tech­nol­ogy adop­tion ini­tia­tives, such as Aad­har, GSTN, BHIM, etc. There will also be a JAM Trin­ity — Jan Dhan – Aad­har – Mo­bile — to en­able digi­ti­sa­tion across in­dus­tries.

DIG­I­TAL IN­NO­VA­TION HUB

India is emerg­ing as the hub for “Dig­i­tal Skills”. India spends $ 1.6 bil­lion an­nu­ally on train­ing work­force. It is the largest em­ployer within the private sec­tor, em­ploy­ing 3.9 mil­lion peo­ple. India is also trans­form­ing into a dig­i­tal econ­omy with over 450 mil­lion plus in­ter­net sub­scribers.

The In­dian IT in­dus­try has over 17,000 firms, of which 1,000+ are large firms with over 50 de­liv­ery lo­ca­tions in India. The coun­try’s cost com­pet­i­tive­ness in pro­vid­ing IT ser­vices, ap­prox­i­mately 3-4 times more cost-ef­fec­tive than the US, con­tin­ues to be its unique sell­ing propo­si­tion in the global sourc­ing mar­ket. The large IT-BPM clus­ters are based in Delhi NCR, Kar­nataka, Ma­ha­rash­tra, Te­len­gana and Tamil Nadu.

IN­DUS­TRY TRENDS

• Cloud com­pu­ta­tion - Al­lows off­load data man­age­ment, back­end de­vel­op­ment & de­sign.

• E- Gov­er­nance - E- health, E-ed­u­ca­tion & E-tick­et­ing

• 4G and 5G - Sig­nif­i­cant data us­age, low la­tency, high re­li­a­bil­ity and low en­ergy con­sump­tion.

• Green IT - En­vi­ron­ment-friendly bat­ter­ies, re­new­able en­ergy sources and man­age­ment of power sys­tems.

• Molec­u­lar com­mu­ni­ca­tions - Bio-nanoma­chines com­mu­ni­cate to per­form co­or­di­nated ac­tions. Codi­gion, from Shilliong, Megha­laya, of­fers its in­sights of In­dian IT and soft­ware in­dus­try. The soft­ware in­dus­try has faced ma­jor dis­rup­tion in tra­di­tional busi­ness model with the in­tro­duc­tion of dig­i­tal trans­for­ma­tion tech­nolo­gies like AI, IoT, cloud com­put­ing, Big Data and so on. The In­dian IT in­dus­try is scal­ing up, of­fer­ing more end-to-end so­lu­tions and gov­ern­ment schemes like Make in India, Start-Up India, and Dig­i­tal India.

The dig­i­tally skilled man­power is also in­creas­ing. The wage level is lower than most coun­tries, re­sult­ing in the un­matched value propo­si­tion. A highly qual­i­fied pool of tech­ni­cal man­power, the gov­ern­ment’s ini­tia­tive, and dig­i­tal tech­nolo­gies, have shown greater im­pact in the soft­ware mar­ket.

India has now be­come one of the largest global out­sourc­ing des­ti­na­tion across the globe with a 55% mar­ket share. It has 35% in BPM share. The IT sec­tor con­trib­utes to 7.7% to India’s GDP. India has over 5,,000 star­tups with 1,200 star­tups be­ing added in 2018.

CHAR­AC­TER­IS­TICS

India is con­sid­ered to be one of the ma­jor IT force in the global soft­ware mar­ket with ad­vance­ment in ed­u­ca­tion, gov­ern­ment ini­tia­tives, investment op­por­tu­ni­ties, and skilled man­power. The young and skilled IT de­vel­op­ment man­power at­tributes to the In­dian soft­ware de­vel­op­ment growth. How­ever, the In­dian IT wages are lower as com­pared to other

India is set to be­come a $1 tril­lion dig­i­tal econ­omy by 2023, through gov­ern­ment tech­nol­ogy adop­tion ini­tia­tives, such as Aad­har, GSTN, BHIM, etc

coun­tries. The qual­ity of work form India is more ro­bust and ef­fi­cient as com­pared to oth­ers.

The soft­ware in­dus­try is backed by the Gov­ern­ment ini­tia­tives. Bank­ing and fi­nan­cial ser­vices are now aim­ing to­ward new investment op­por­tu­ni­ties. The mar­ket sec­tor breakup for FY18: IT ser­vices ($86bil­lion), BPM ($32 bil­lion), soft­ware prod­ucts and engi­neer­ing ser­vices ($33 bil­lion) and hard­ware ($15.40 bil­lion). The mar­ket size of the In­dian IT in­dus­try in 2018 con­sti­tutes domestic ($41 bil­lion) and ex­ports ($126 bil­lion). • India has be­come one of the top­most investment des­ti­na­tions in the IT in­dus­try. • The In­dian IT in­dus­try grew five

fold in FY17-18. • Cost com­pet­i­tive­ness is India’s USP in the global mar­ket. • India holds a 55% share as an out

sourc­ing des­ti­na­tion. • IT in­dus­try con­tributed over 7.9% in In­dian GDP in FY17-18. • India has more than 1000 de­liv­er­ies cen­ter in about 200 cities and 80 coun­tries for IT ser­vices. • IT in­dus­try is expected to add an­other 100k job in FY19. • The In­dian IT in­dus­try is expected to grow up to $350 bil­lion by 2025.

THREATS

The in­creased demand for IT and soft­ware is def­i­nitely caus­ing a short­age of skilled pro­fes­sion­als. There is also the in­creas­ing com­pe­ti­tion from other na­tions. India spe­cial­izes in IT-en­abled ser­vices, and is los­ing fo­cus on IT and soft­ware prod­ucts. That needs a relook. Com­pa­nies are ne­glect­ing the engi­neer­ing and R&D ser­vices as well, and the em­pha­sis seems to be more on low-end ITeS ser­vices. Be­sides, there is no fo­cus on the hard­ware man­u­fac­tur­ing sec­tor. In For­tune India, BVR Mo­han, founder and ex­ec­u­tive chair­man of Cyient, said 2019 will be chal­leng­ing for In­dian IT-ITeS in­dus­try. The year, how­ever, will bring in a lot of op­por­tu­ni­ties as the in­dus­try is expected to grow around 10%.

Tech­nolo­gies such as AI/ML, IoT, AR/VR, Big Data an­a­lyt­ics, ro­botic process au­to­ma­tion, and 3D print­ing are in­creas­ingly be­com­ing main­stream, cut­ting across in­dus­tries. These tech­nol­ogy dis­rup­tions are pre­sent­ing a for­mi­da­ble chal­lenge to the $167 bil­lion (2017-18 rev­enue) strong In­dian IT in­dus­try. To­day, up­skilling and reskilling of over 50% of the in­dus­try work­force has be­come an in­dis­pens­able obli­ga­tion for the ITITeS in­dus­try.

India is emerg­ing as the hub for “Dig­i­tal Skills”. The coun­try spends $ 1.6 bil­lion an­nu­ally on train­ing work­force in the sec­tor. The in­dus­try is the largest em­ployer within the private sec­tor, em­ploy­ing 3.9 mil­lion peo­ple.

Ac­cord­ing to NASSCOM, dig­i­tal ac­cel­er­a­tion saw $33 bil­lion rev­enue and 30% growth dur­ing 2018-19. There were 170,000 net new hires. 600,000 are dig­i­tally skilled. There were around 7,200+ tech star­tups in 2018, with 8 Uni­corns added. 50% Deep­Tech star­tups were added in 2018-19. There were ap­prox­i­mately 400+ AI star­tups. India be­came the first lead­ing coun­try in RPA de­ploy­ment. AI for ALL – a Na­tional AI Strat­egy, was also an­nounced. How­ever, 2019 is a year to be cau­tious. There are on­go­ing trade wars and pol­icy un­cer­tainty, currency fluc

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