The $191-billion Indian IT industry is slated to grow slower in 2020 fiscal at 7.7% compared to 8.1% in the previous year. CEOs of Indian IT firms seem to be “cautiously optimistic” about the future due to global macroeconomic uncertainties, says a survey by Nasscom.
Of the CEOs polled, 53% expect a similar or stronger global economy in 2020; 72% expect their global clients to deliver similar or better growth, while 60% expect tech spends to grow in developed markets in a similar range as in 2019. The findings were part of the ‘Strategic Review-Techade: The New Decade’ released on the sidelines of the three-day Nasscom Technology and Leadership Forum (NTLF) 2020 that commenced in Mumbai.
Focus on digital transformation
“Over the past year, the performance from the industry showcased the increasing focus on the digital transformation of businesses and also the expansion of digital-driven services to cater to clients across the globe. We are hopeful that this trend will continue to drive the growth of the industry in the coming years, and evangelizing innovation in the domain,” said Keshav Murugesh, Chairman, NASSCOM.
The survey identified the top three growth drivers for business. Topping the list was large deals for digitalization; this was followed by growth in the key verticals of BFSI and retail; the third driver was enhanced business opportunities in Europe and APAC. And 57% of CEOs surveyed expected the industry’s business performance to be similar or somewhat better in 2020.
The study also identified three key risks: macroeconomic factors and global economic opportunities; lack of digital capabilities and skills; and cybersecurity. As for the CEOs’ digital acceleration strategy, reskilling and building the right talent pool was on top of their mind; this was followed by products and platforms, and partnerships and co-innovation.
Another strong year for hiring
Despite the challenges, 73% of the CEOs surveyed expect another strong year for hiring. A separate part of the report says the industry will see 205,000 net new hires this fiscal, of a 4.36-million strong workforce.
A key trend witnessed last year was the continued focus on digital revenues, which grew by over 23%, once again a testimony to the prominence digital technologies and systems are gaining across portfolios. Investing in digital skills continues to rise as an imperative for the industry, with organisations building their capabilities and aligning business models to digital practices as up to 28% of organizational revenues was recorded for digital. Indian enterprises spent over $2 billion domestically to accelerate digital transformation.
“Talent, trust, and innovation remain our key imperatives as we move into the first year of this decade. The industry continued its hiring momentum with 205,000 new hires, and today we are proud to have 884,000 digitally skilled talent in the country. We will maintain this thrust with the launch of FutureSkills Prime to help build a workforce for the coming Techade,” Nasscom president Debjani Ghosh said sharing her thoughts.
The report also lists out five megatrends and emerging technologies for the next decade, which will push digitization-led global output to nearly $100 trillion or 40% of 2030 global GDP. Top of the list is a data-led economy, with 175 zettabytes of data by 2030 disrupted future of work, environmental sustainability stress, Asian economic eminence and mass urbanization and hyper personalization.
“Revenue from data-led solutions will offset new capital expenditure on data and analytics infrastructure, chief data officers will be ubiquitous. Megatrends 2030 will create unprecedented business and consumption shifts, pushing digitalization-led global output to nearly $100 trillion or 40% of 2030 global GDP,” the survey said.
While highlighting milestones during the past 10 years, the report said, the industry added 2 million direct jobs, creating 10,000 technology companies, crossing $105 billion in overall revenue, and attracting $50 billion-plus FDI.
Despite positive developments the caution optimism of IT leaders in justified this year, especially in the current situation as the technology sector is facing significant uncertainties including the impact of Brexit, the US elections and the heat of the Coronavirus in China.