Bengaluru, NFAPost: According to Nasscom, the year 2021 is going to a period of building future-readiness for the $190 billion strong Indian technology sector as the country underwent dramatic changes with the last years disruptive business impact created by Covid-19 pandemic.
In a report released by Nasscom ‘Technology Sector In India 2021- New World: The Future Is Virtual/Strategic Review’ as part of 29th Technogy and Leadership Forum summit, India’s apex technology organisation states that there is a need for shaping the future towards a better normal.
The report highlights the fact there is need for re-imaging technology to make crisis into an opportunity, need for hyper digitisation and enhanced use of technology to make an impact. Also, the primary areas of focus like customer-centric operation, building expertise in remote operational model, accelerated digital capacity building and expanding access in emerging and growth sectors.
The report states the key accelerator for the industry is the increased digital adoption in end-user industries and accelerated digital transformation timelines and remote work enablement -workplace modernisation & cybersecurity. Also, technology is allowing enterprises to address direct to consumer business models.
There is an emergence of Covid resilient offerings like digital customer experience, omnichannel customer engagement, cloud transformation. This is supported by growing cloud acceleration in small and medium enterprises (SME) along with the emergence of tech-focused startups in the country.
Nasscom states that the trends defined in 20220 is expected to find traction in 2021. These areas include changing business models via developing strategies for digital world and growing outsourcing business from many firms. The report also states that 3Cs like cloud, collaboration and cybersecurity will be the centre of recovery.
There is a reality that digital business revenue will continue to grow during the current year and India market will witness extreme digitisation. Here the report also highlights that merger and acquisition will be the core of business during the year.
Commenting on the report, Minister for IT and Electronics Ravishankar Prasad tweeted that testifying to its growth, despite the downturn, Indian Tech industry continues to be the net hirer with over 138,000 net new hires & significant focus on digital upskilling. “Truly leading India’s growth growth in this re-defined,” tweets Ravishanar Prasad.
Nasscom report on Technology Sector In India 2021- states that as India stands at the cusp of a re-imagined techade in the new normal, it is reassuring to witness the Indian tech industry lead its path to growth by the continual increase in revenue and jobs despite the global crisis in 2020.
It is important to find that annual enrolment in the STEM talent pool is India stands at 2 million and the country has emerged as the largest tech talent pool country with 4.47 million people. Among them, the country also offers leading digital tech talent pool of 1.17 million and its witnessing a combined annual growth rate (CAGR) of 30%.
Nasscom also highlights the fact that there is a need for technology industry to go for massive digital upskilling efforts. This is primarily due to business world over are going through a phase of digital disruption. The report states that India will have to upskill around 2.5 lakh employees every year.
- Global impact of the COVID-19 pandemic has led to two major resets or shifts – an acceleration in the pace of digital transformation and a novel, hybrid work model that has redefined the dimensions of already evolving workplace and work culture
Technology Industry Performance
- India’s technology industry is expected to record a positive growth of 2.3% in FY2021 to touch $194 billion (excl. eCommerce).
- Exports, at ~$150 billion, is likely to see a modest growth of 1.9%; however, domestic technology sector is likely to perform better – y-o-y growth expected to be 3.4% ($45 billion)
Digital Transformation Imperative
- Consumers of technology – established companies, start-ups and increasingly governments across India – have unequivocally suggested significant increase in digital investments over the next 18 months
- With heightened urgency to execute in months what was expected in years earlier, the focus is on delivering customer-centric solutions through new data-led business models, while enabling hybrid work and mass-scale digital skilling
2021-22 Annual Outlook
- The latter half, H2, of FY2021 is witnessing strong recovery of the technology sector in India, and industry seems to be back to pre-COVID level growth, coupled with strong deal pipelines, and solid margins.
- 67% of CEOs polled in a NASSCOM 2021 CEO Survey expect global India’s technology sector to grow significantly higher in 2021 as compared to 2020
The report also came up with new highlights as part of CEO survey. The CEOs anticipate significantly better global economic growth and increase in hiring in 2021 as compared to 2020. This is driven primarily by growth in technology industry and increased tech spend among global companies.
Nasscom CEO survey states 97% business heads finds the fiscal year 2022 will bring economic growth which will be bettter than the previous fiscal. Also, 67% of CEOs expect Indian technology industry to grow significantly higher than 2020. Besides 71% CEO expecting global technology spend to be significantly higher than 2020, the Nasscom survey also states that CEOs expect 2021 hiring to be more than what the industry hired in 2020.
With overall growth of 2.3% in 2020, India’s tech industry has emerged from the crisis more relevant and resilient than ever. The report also appreciates proactive steps and continued support extended by Ministry of Electronics & IT and Department of Telecommunications, even during the time of Covid-19 crisis.
Talking to NFAPost, Chairman of Axilor Ventures Kris Gopalakrishnan said the demand for tech services demand will grow for IT services due to the accelerated transition during the pandemic.
The India model (Global Delivery Model) withstood the transition to Work From Home better than we thought and no business suffered disruptions during this transition. We are able to retrain the professionals to the new skills required. All of these point to higher demand and sustained supply. Industry will recruit more people to meet the demand.
He highlighted that there will be robust in the next 2-3 years due to accelerated transition to more digital – cloud, mobile, IoT, AI/ML etc. “IT Services is a segment of the industry that is doing well and India has clear leadership due to single-minded focus of industry leaders to innovate and sustain leadership. We need to invest more into India product, SaaS and tools businesses so that achieve global scale and impact,” he said.
Kris Gopalakrishnan also stated that for these segments, India needs to invest more in R&D to create own intellectual properties (IP) and technologies. “Academic and research institutions must become ambitious in their research programs and industry must invest in these,” he said.
NASSCOM Technology & Leadership Forum (NTLF 2021), a platform which has been the voice of the 190-billion-dollar industry eco-system, will start tomorrow. NTLF 2021 with the overarching theme ‘Shaping the future towards a better normal’ aims to achieve three key objectives – mark as a celebration of technology which has served as a backbone to boost businesses during the crisis, draw a roadmap for the way ahead towards building a better future and bringing out the importance of trust and responsible tech in this hyper virtual world.