With a robust domestic IT market, a huge potential upside fanned by digital India initiatives, there are silver linings aplenty for India's cloudy IT industry to build on its IT services growth opportunities abroad once again provided it is able to chart the future of technology and prepare itself with offerings that will serve the needs of the global customers, writes Sanjiv Kataria for South Asia Monitor
By Sanjiv Kataria
A spate of job losses, slowing industry growth and imminent visa restrictions on software professionals by developed markets seems to indicate bad times for the USD155 billion Indian software industry which contribute 7.7 per cent to India’s GDP.
When one factors in the possibilities of increasing automation and emergence of Artificial Intelligence (AI) that mimics human cognitive abilities, the future of the IT industry looks even cloudier. IT gurus and industry intelligence experts are at a loss to explain whether IT would continue as India’s ‘sunrise sector’ or is it well past its prime and now staring at a slow death.
It started with the Indian IT industry association NASSCOM projecting the industry’s exports growing at 10-12 per cent for the fiscal year 2016-17. However, they grew by only 8.3 per cent to USD 117 billion. For 2017-18, NASSCOM’s forecast stands at 7-8 per cent. The industry body, headed by Indian IT and Business Process Outsourcing industry veteran Raman Roy, attributed this single digit projection to political and economic uncertainties impacting decisions and discretionary spend.
Slowing of traditional services business, growing protectionism in developed markets, and a shift in client spending to newer areas, such as digital and cloud, have added to the slow growth projection.
The IT services revenues from the Americas constituting two-thirds of India’s IT export earnings make the industry vulnerable to the growing rhetoric on protectionism and visa issues. However, this also provides India an opportunity to use this valuable experience to aggressively grow its business in the under-penetrated markets, like continental Europe, China, Japan, West Asia and Africa.
The growing opportunities in the digital business, which have the potential of becoming mainstream, is the silver lining for the industry. India has two outfits that can quickly hone the skills required to fulfil the demand thrown up by digital and cloud technologies – a robust engineering education system and in-house training facilities of top 100 IT industry players.
Combined with the fact that the industry already has the experience in building successful partnerships with customers, financial capability to make acquisitions in areas where it needs to access or enhance its capabilities and market reach, it can grow in the new areas of digital and cloud technologies.
What should excite the industry most is the vast India opportunity. Together with a formidable IT exports market India has an equally robust domestic market valued at USD 38 billion. And the equally vibrant digital revolution that is sweeping the country on the back of an explosive penetration of computers and mobile phones.
Let us consider these facts: Today, more than two out of three Indians have a mobile phone. One in every eight Indians has a computer. One in every three Indians has access to broadband. One in four Indians has access to a digital payment facility. With a slew of e-governance applications, mobile apps, digital wallets, payment gateways the domestic digital opportunity is poised for growth.
The innovative solutions that the Indian software professionals built for global giants have motivated Indian youth to take to the entrepreneurship route to come up with inventive solutions in cyber security, internet of things, gaming, multi-media graphics, and AI.
Prime Minister Narendra Modi-led government’s focus on driving the innovation ecosystem and strong thrust on entrepreneurship to empower millions of lives has already begun making a visible change in perceptions about India.
BharatQR, the world’s first interoperable QR solution, is a uniform digital payments technology that eliminates the need for costly point-of-sale (POS) terminals, therefore making electronic payment acceptance affordable and sustainable for small merchants and traders.
A Mumbai-headquartered AI firm Arya.ai, the brainchild of IIT Bombay alumni, works on building tools for creating the “neural network”, a vast computing system that mimics the human brain. It creates a cloud based system which allows the AI to evolve, learn from its earlier tasks and apply them to the next one.
These and many other applications have the potential of spurring domestic growth at unprecedented levels. With a robust domestic IT market, a huge potential upside fanned by digital India initiatives, there are silver linings aplenty for India's cloudy IT industry to build on its IT services growth opportunities abroad once again provided it is able to chart the future of technology and prepare itself with offerings that will serve the needs of the global customers.
(The author is a strategic communications and PR counsel who served as brand custodian for NIIT Technologies and NIIT Limited. He can be contacted at sanjiv. email@example.com )