Saturday, February 27, 2021

Outlook optimistic for IT jobs and revenue in India

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Although global technology spending declined 3.2% in 2020, the Indian IT sector grew through the COVID-19 pandemic, driven by industry’s digital transformation and technology adoption, according to NASSCOM’s annual strategic report.

The National Association of Software and Services Companies estimates that the Indian IT sector will grow 2.3% in the year to March 31, 2021, to around $194 billion, $150 billion of it from exports. Within that, it expects hardware sales will grow fastest, rising 4.1% to $16 billion, with IT services growing at 2.7%, to $99 billion. It forecasts revenue from engineering and R&D services will shrink 0.2%, to $31 billion.

In the broader economy, India fared less well. Global gross domestic product (GDP), the market value of all final goods and services produced, declined 3.5% in 2020 as a result of the pandemic’s perturbations, but India’s GDP fell even faster, down 8% year on year, according to International Monetary Fund figures from January 2021. 

Despite this, 2020 spending on digital adoption in India rose 3.4 percent, according to NASSCOM.

Indian CEOs are optimistic about the outlook for IT, according to a survey conducted by the association: 71% of them expect global technology spend to rise significantly in 2021, and 67% expect India’s technology industry to grow significantly faster than in 2020. (Already, according to NASSCOM’s analysis, revenue per employee at Indian IT companies rose 5.5% between the first and second halves of 2020.)

Around 60% of CEOs also expect larger digitization deals in 2021, with investments forecast to recover in core sectors including BFSI, retail, and manufacturing. Their focus of spending is shifting from legacy systems to front-end customer experience, with a 20 percent increase in tech spending on digitizing the core, enhancing CX, and redesigning product portfolios, NASSCOM reports.

Copyright © 2021 IDG Communications, Inc.

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