Exploring Challenges and Opportunities for the Sustainability of Indian Information Technology

Introduction

The coronavirus crisis has created a profound shift in how people interact and economies function. Policy mandates and fears of becoming infected or infecting others have impelled populations to shelter at home, socially distance and otherwise reduce direct, in-person interactions with others. By enabling people to conduct many regular activities remotely, including working, learning, shopping and receiving medical services, technology has allowed the continuation of some semblance of a normal lifestyle in this new environment (Baporikar, 2021). Within this context, the IT sector has provided the tools and resources required to support these remote activities, as well as to address the pandemic more directly through efforts such as supporting contact tracing and providing high-performance computing resources for COVID-19-related research. Digital economy is estimated to reach Rs. 69, 89,000 crores (US$ 1 trillion) by 2025. The domestic revenue of the IT industry was estimated at US$ 44 billion and export revenue was estimated at US$ 147 billion in FY20. Total number of employees grew to 1.02 million cumulatively for four Indian IT majors (including TCS, Infosys, Wipro, and HCL Tech) as on December 31, 2019. Indian IT industry employed 205,000 new hires, up from the 185,000 jobs added in FY19 and had 884,000 digitally skilled talents in 2019 (Media Reports, PIB, DPIIT, 2020-21).

COVID-19 has generated unprecedented exigency response from organizations and governments. Emergency response readiness has been stretched to limits. Indian technology industry has mobilized exemplary resources to ensure continued business for critical client services world-wide. Yet, the event is unfathomable in scale and impact with the IT-BPM industry’s revenue was estimated at around US$ 191 billion in FY20, growing at 7.7% y-o-y basis. It is estimated to reach US$ 350 billion by 2025. Moreover, revenue from the digital segment is expected to form 38% of the total industry revenue by 2025. The one thing that stands out among all the challenges and learnings from this health crisis is that technology can empower human race, grappling with vulnerabilities in various ways. Owing to the rising curve of pandemic, several countries across globe resorted to lockdowns. These were aimed at confining billions of citizens to their homes, resulting to work from home the new normal, and seizing businesses to ensure safety. Consequently, the global economy is expected to shrink by over 3% in 2020 – the steepest slowdown since the Great Depression of the 1930s, according to International Monetary Fund (IMF). While a recent report (pre-Covid) from Nasscom revealed that the IT sector in India will grow 7.7% this fiscal, another report (during Covid) from Gartner revealed that India’s nearly $200 billion IT & ITeS services industry will witness a fall of 8% in 2020.

Globally, the IT industry shifted towards high gear to accommodate the transition and was forced to rethink strategies. While the scar will take time to heal, IT industry is more poised to take the lead and ensure that going back to business is more secure. As the recovery takes shape, there will be important shifts in the make of India’s economy and functioning to usher in a better and sustainable future (NASSCOM-Quarterly Industry Review - March 2021). Hence adopting an exploratory approach with systematic literature review this paper delves into the post-Covid challenges and opportunities for information technology industry in Indian context. In particular the focus is on impact of the pandemic on the technology industry, and its response to this shock, by addressing three elements: accelerated digital transformation, increased importance of technology in the economy and society, and prevalence of inequalities in access to and the use of technology.