Service sector set for a boom by 2020

INDIA COULD SOON BE AMONG THE TOP THREE PHARMACEUTICAL MARKETS BY INCREMENTAL GROWTH AND THE SIXTH-LARGEST GLOBALLY IN ABSOLUTE SIZE, WITH AN ESTIMATED CAGR OF ABOUT 12% OVER THE NEXT THREE YEARS

The fourth industrial revolution that we are currently witnessing is being defined as the new age of automation, which is led by exceptional technological developments. The pace of artificial intelligence and its scope continues to grow exponentially. The service sector in India has, since the 1990s, been the most dominant sector of India’s GDP and a sector that has attracted significant foreign investment. Along with that, the job landscape of the country has been evolving constantly.

As of 2018, 34.49% of India’s employed population was working in the service sector.

In first half of the 2019, the sector contributed to 57.12% of GDP added at current price and the net services exported stood at $38.95 billion. Despite a few months of slowdown in November and December, the growth of the service sector picked up pace yet again in February 2019.

Even in the months of slowdown, the PMI has remained above the 50% mark that separates growth from contraction and the job creation in the sector has continued to expand reaching a three-month high in February.

SECTORS TO WITNESS GROWTH

With the increase in BPOS, KPOS and other forms of foreign investment to employ Indians, the service sector is set only to add jobs and provide greater levels of employment in the nation. There are various sectors that will add to this growth like pharmaceuticals and IT.

India is on its way to becoming one of the leading destinations for high-end diagnostic services. The Indian pharmaceutical market is estimated to grow at a CAGR around 12% over the next three years.

By 2020, India could be among the top three pharmaceutical markets by incremental growth and the sixth largest globally in absolute size. This will add a significant number of jobs and employment opportunities for the service sector. With so many companies embarking on digital transformations, business-it hybrid roles will emerge to help organisations fulfil their evolving digital visions. The launch of the 5G services in 2019 will also open up a significant number of jobs in the sector.

According to the IBEF (India Brand Equity Foundation) figures, the Indian IT industry is set to touch $225 billion by 2020. Along with this, the service sector will also see a transformation in workplace culture and skill requirement with the advent of artificial intelligence, automation and robotics. Recruitment processes in the service sector will witness a massive change too.

FUTURE OF JOBS

Over 40 million new jobs are expected to be generated by 2020, as per a report titled ‘India’s New Opportunities 2020’ by the All India Management Association, Boston Consulting Group and the Confederation of Indian Industry.

The Indian government has undertaken various steps towards boosting growth of the service sector. With supportive government policies, jobs are expected to be created from Ayushman Bharat, the National Health Protection Scheme. Along with that, the government introduced ‘Services Exports from India Scheme’ (SEIS) aimed at promoting export of services from India by providing duty scrip credit for eligible exports.

India has experienced a robust growth in the service sector in the last few decades, but sustaining such growth is equally vital and to achieve sustainable growth, India has to keep moving towards new horizons.

The author is vice-president and head

of corporate communication at Aptech, a corporate training company