4 Months agoIndia is a global driver in the IT & BPM sector. Know how!
With an aspiration to touch USD 350 Billion in revenue by 2025 from the present USD 143 Billion,1 2 India’s Information Technology and Business Process Management (IT & BPM) sector has continued to record double digit growth despite static growth in global tech spending. An important growth driver, it contributed 9.3% to India’s GDP in FY 2015-16.3 The industry is known for its cost competitiveness and high quality services across the world and has been instrumental in transforming the perception of India in the global economy. This reflects in India’s high market share in the global services sourcing industry which stands at 56% (highest in the world).4
Worldwide IT-BPM Service Growth (USD Billion):5
IT-BPM Domestic Market Growth (USD Billion):6
IT-BPM Export Growth (USD Billion):7
The industry’s revenue is projected to grow by 8% from USD 143 Billion in FY 2016 to USD 154 Billion in FY 2017.8 The sector contributes 38%9 of the total services exports from the country. India is also world’s biggest BPM destination.10 11 The e-commerce industry itself is growing at a CAGR of near 20%. Often referred to as the ‘Global Talent Powerhouse’, the sector is the largest employer within the private sector, employing 3.7 million people directly. India has more than 15,000 outsourcing firms out of which 1000 are large firms, employing a minimum of 5,000 employees each. As the world’s third largest tech-start- up hub, India boasts of over 4,700 start- ups. Additionally, India has over 600 offshore development centres of over 78 countries. Global industry giants from France, Germany, USA and Japan presently operate in the country.12
A number of factors have been driving the growth of the sector. With India having captured a sizeable portion of the global technology sourcing business, here is a look at the major catalysts for this accomplishment:
- The thrust towards digitisation:
India has successfully established itself as a digital economy with 375+ million Internet subscribers. India’s domestic IT-BPM market is growing at an impressive CAGR of 14%. Internet is now closer than ever to the masses. Projects like ‘Smart Cities’ (which will have IT driven systems to deliver urban utilities) coupled with schemes like National Digital Literacy Mission and e-kranti will continue the wave of digitization- a significant boost to the sector in India.13
The ‘Digital India’ campaign has put India on the path of becoming a digital economy and outlook for future seems promising. IT megaprojects such as nationwide broadband highways, universal mobile access and public internet access program are in the pipeline under the Digital India initiative. The National Optical Fibre Network aims to connect all 2,50,000 Gram Panchayats in the country with high speed broadband. IT solutions in the domains of education, healthcare, urban planning and financial inclusion are focus areas of the program and this is creating several opportunities for the IT sector. The Digital India initiative will create around half million direct or indirect jobs.14
- Tech startups driving growth:
Technology based startups are also key growth drivers of IT & BPM products in India with more than 4,700 startups currently operating in the country. India’s startup revolution will benefit verticals such as Internet of Things (IoT), Machine Learning, Artificial Intelligence (AI) and Health Care technology. In BPM segment, a strong annual growth will be fuelled by newly emerging fields such as cloud, mobility and advanced analytics in 2017. By 2020, Social, Mobile, Analytics, and Cloud (SMAC) market, which is helping attract new customer is projected to reach USD 225 billion by 2020.15 India’s digital workforce comprises over 1,50,000 employees with SMAC skills. ~50,000 employees are skilled in analytics, 30,000 people in enterprise mobility and >50,000 in cloud and social media & collaboration.16
- The e-Commerce wave:
The domestic industry has substantially benefitted from the e-commerce and mobile-app industry and the addition of e-commerce in specific is the newly emerging sector sub-segment.
- India – a hub for digital skills & the innovation wave:
The strength of India’s IT Sector lies in the skill-set of its people. With the right ecosystem for start- ups and the initiative to re-skill people, India has been able retain global leadership in digital skills. USD 1.6 billion is spent annually on training workforce in the sector.17 Further, Indian IT firms have been innovating around products and services. Innovations are also being made in “tech-dependent” areas such as edu-tech and health-tech. This is being led by start-ups in specific.
- Government support:
These significant pillars of growth for India’s IT-BPM sector are complemented by Government support, which is consistently working towards sustaining the growth and performance of the sector. Centre of Excellence for Internet of Things has been set up in Bengaluru. It has a capacity to incubate 40 start-ups18 and focuses on building solutions for applications such as agriculture, automobile, telecom, healthcare and consumer goods. The Government’s IT/ITeS Sector Skill Council (SSC) is facilitating the expansion of the skill workforce with the help of National Association of Software and Services Companies (NASSCOM). The Government has also been promoting regulatory support to protect intellectual property and strengthen cyber security laws among other things.19
India’s IT-BPM sector is a matter of pride for the country and the right steps at the right time have helped India maintain its leadership position in the global tech environment.