Posted by New Delhi: Indian tech sector continues to add revenue and jobs despite the global economic and health crisis in 2020, revealed Nasscom’s review.
Digital transformation and tech adoption pushed the Indian tech sector to grow at 2.3% year on year. While the global output shrunk 3.2% as estimated due to the 2020 pandemic.
India’s top IT trade body National Association of Software & Services Companies (Nasscom) released its strategic review 2021. Titled, ‘New World: The Future is Virtual’ – the review captures key trends that shaped 2020-21 and the road ahead for the new normal.
Indian tech sector contributed ~8% relative share to the national GDP despite headwinds in 2020. With 52% relative share in services exports and 50% share in total FDI (based on FDI inflows between April to September 2020).
Against the downturn, the Indian tech sector continues to be a net hirer with a significant focus on digital upskilling. The industry is expected to hire more than 138,000 net new hires in FY2020-21. Taking the total employee base to 4.47 million in FY2020-21. The digital talent pool is expected to cross 1.17 million, growing at 32% over last year.
Investing in digital continues to rise with organisations building their capabilities and aligning business models to digital practices. Digital recorded up to 28%-30% of the industry revenues.
The Indian domestic market, driven by hardware led demand continued to show resilience, growing at 3.4% in the year. With an increased focus on innovation, India witnessed more than 115,000 tech patents filed by companies in India in the last 5 years.
“Digital transformation is the topmost priority for global corporations and in a highly connected world that will remain largely contactless for an extended period, there are shifts in business models, customer experience, operations, and employee experience,” said U.B. Pravin Rao, Chairman – Nasscom.
“Our CEO survey for 2021 indicates that almost 70% companies expect investment in global technology higher than the previous year. In this hyper-digital economy, trust with the four cornerstones of competence, reliability, integrity and empathy — will be the single-most-important currency, leading the industry growth towards a better normal,” added Rao.
Enterprises are re-balancing their technology spends to prioritize digitization. The industry saw an overall 10% shift in outcome-based pricing. Offshore witnessed more than 4% shift in 2020. Attrition rate dropped by 50% in H2 2020 compared to H1 2020.
The industry witnessed 146 M&A deals in 2020. With 90% of deals were digitally-focused. Companies saw a significant rise of 80% in cloud adoption during H1 FY2021 Vs H2 FY2020.
Further, Continental Europe, APAC emerged as one of the strongest growth geographies in FY2021. BFSI & Healthcare were key growth verticals during the year.
COVID -19 has paced digital adoption across industries and technology service providers are witnessing a sharp growth in digital deals. The consolidated revenues of top listed technology companies recorded a 5.3% growth in H2 2020 over H1 2020.
Digital upskilling initiatives led revenue per employee grew at 5.5% in H2 2020 as compared to H1 2020.
“As we look at 2021, while there are positives on the vaccination front and accelerated digitization across verticals. The Indian technology sector is well geared to build on these trends and continue its transformation journey in this re-defined techade,” said Debjani Ghosh, President – Nasscom.
As per Nasscom’s CEO survey, 97% CEOs anticipate a significantly better global economic growth in 2021 as compared to 2020.
In terms of hiring, 95% CEOs expect 2021 hiring to be more than what they hired in 2020. Further, 67% CEOs believe the Indian technology industry to grow significantly higher than 2020.
In the next normal, discussions with CEOs suggest the industry is warming up to a blended work model. 70% of the survey respondents expect to have a higher prevalence of remote work along with a boost in gig workforce in 2021.
60% of the industry CEOs expect larger digitization deals in 2021. Investments are likely to recover in core sectors including BFSI, Retail and Manufacturing.
With hyper-digitization and technology adoption accelerating across sectors, 2021 will put the spotlight on the emergence of growth verticals like healthcare, pharma, medical devices, software & internet, consumer electronics.