Indian IT sector is cautiously optimistic for Fiscal 2020-21
Bengaluru: The burgeoning Indian IT sector is cautiously optimistic about its outlook for the ensuing fiscal 2020-21 in the face of global risks, said its apex body on Wednesday.
“Though growth and hiring outlook for the IT industry is sound, our CEO survey revealed that the executives professed cautious optimism as risks abound in an uncertain world,” said the sector’s representative body Nasscom in a statement here.
According to Nasscom’s CEO survey for fiscal 2020-21, 53 percent of the top Indian IT executives foresee a strong world economy in 2020 as 72 percent of the CEOs expect their global clients to demonstrate better growth in the year ahead.
In the developed markets, 60 percent of the surveyed CEOs are eyeing growth in technology spending.
The three growth drivers for technology spending are enabling digital at the core of enterprise, augmenting customer experience and digital operations, powered technologies such as cloud, data, AI, machine learning and cyber security.
Larger digitalisation deals, key BFSI and retail verticals growth and enhanced business opportunities in Europe and Asia Pacific are expected to propel the IT industry, the survey said.
The strategy CEOs are adopting to capitalise on digitalisation in 2020 include reskilling and building the right talent pool, identifying key products and platforms and forging partnerships and co-innovations.
As many as 73 percents of the CEOs believe 2020 to be strong, but outlined that lack of digital capabilities and skills to be a key hiring risk.
Other risks the CEOs highlighted for the IT industry in the next fiscal featured macroeconomic factor and global economic uncertainties and cyber security.
Giving a hint of how things would be for the IT sector in 2030, the Nasscom CEO survey showcased the five mega trends such as data-led economy riding on 175 zettabytes, disrupted future of work, environmental sustainability stress, Asian economic eminence and mass urbanisation and hyper personalisation.
“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 digitalisation-led global output to nearly $100 trillion or 40 percent of 2030 global GDP,” the survey said.
Terming the 2009-19 decade as an unparalleled techade, Nasscom said the IT industry created two million direct jobs, attracted $50 billion in foreign direct investments (FDI) and created 10,000 technology companies, including 27 unicorns.
According to the industry body, the decade also added 500 million new internet users and generated $50 billion in e-commerce revenues.
Focusing on 2019, Nasscom said the economy experienced a slowdown, but the spending on tech remained stable.
It said the global tech expenditure grew by 5.6 percent as the global sourcing market clocked up to $213 billion in revenues.
Some new technologies changing businesses and identified by Nasscom included AI, 3D printing, blockchain, big data and analytics, cybersecurity, Internet of Things (IoT), robotics, immersive media and cloud computing.
Further breaking down the financials of the IT industry in fiscal 2019-20, Nasscom said IT services generated $97 billion in revenue, business process management $38 billion, engineering and Research and Development $33 billion, software products $9 billion, hardware $16 billion and e-commerce $54 billion.
Among all the constituents within the IT industry, e-commerce grew the highest year-on-year at 26 percent in 2019-20, Nasscom said.
Other Nasscom highlights in the analyzed fiscal included IT sector cornering 46 percent share in services exports, attracting more than $4 billion startup funding, Indian enterprises going digital with $2 billion expenditure on digital transformation and the country continuing to be the top location for global capability centres.
Recognising the growing share of digital revenues, Nasscom said revenue from digital constituted 28 percent share of the IT industry revenues, clocking 23 percent year-on-year growth.
Digital skilling of employees also emerged crucial with nearly nine lakh digitally skilled employees and the top five Indian IT companies employing 50,000 such employees in the US.
Spending up to one percent of the revenues on research and development, Indian IT companies filed more than 6,500 patents in 2019-20, propelled by more than 150 innovation centers of excellence as 20 global unicorns have their Research and Development centers located in India.