Indian IT industry is alive and kicking: Tata Group chief N Chandrasekaran

By N Chandrasekaran

Next to a news report bemoaning the lack of job creation in the IT industry in a business newspaper last week, there was an advertisement looking for UX/UI designers, full stack web developers, data scientists, data visualisers and Java coders.

Having been in the industry for over 30 years with a ringside view of the industry’s astronomical growth, I would submit that the advertisement strongly validates what we have been seeing around us for some time now: In today’s digital age, consumers and business are now embedded in technology.

And more technology means more jobs. Not less. Besides, technology is a great leveller. It recognises no caste, creed or colour. Just consumers and competence.

Aside from the significant political and social changes taking place today, rapidly emerging digital technologies are disrupting and reshaping our world at great speed. It is making us reimagine the way we engage and transact with each other as consumers, businesses and governments.

Data is the new oil


To win in the new Digital Age, there is a race among companies to get the required tech talent they need to help them transform. For the last 20 years, technology has been used to refine and shape every process in an enterprise, which enabled companies to be efficient and optimise their operations.

But in the digital world, process maturity has become table stakes. It is data that has now become the most valuable resource for business.

As the data component rapidly increases in every business, the demand for data-related skills is rising exponentially. From back-office systems to supply chains, from logistics to customer-facing roles, every job is now data-driven and requires more IT support than ever before. This is leading to huge demand for technology talent.

Besides, to keep pace with this rapid change, businesses need external IT partners to future-proof their technology stacks.

The accelerated trend of digital adoption is driving up worldwide IT spending. Forecasts estimate that IT spending will to rise to $3.5 trillion in 2017, up 2.9% from 2016. Amidst this overall market expansion, Indian IT sits in the sweet spot: the software and IT services segments where growth is estimated to be significantly higher than overall IT spending.

Software sales are expected to grow 7.2% in 2017, while IT services spending is expected to grow 4.8% in 2017. In our lifetimes, I cannot foresee any reversal in the trend of increased spending on technology.

Sustained technology investment has led to millions of skilled employment opportunities across the country. It has given rise to an industry that clocked $150 billion in revenues in 2016, created 3.7 million direct IT jobs and another 10 million indirectly.

The industry is on track to double that to seven million direct IT jobs and 20 million indirect jobs by 2025. Indeed, this data may not reveal the true picture, as it does not project the increasing need for technology-led skills in every other industry too.

Indian investment in tech is only set to rise with number of initiatives like Digital India, which the government estimates will swell to $1 trillion by 2024, up from $270 billion today. Today, India’s technology investment as a percentage of GDP is well below 1%, compared to a global average of 2.5-3%. With Digital India, technology investments will accelerate significantly and this will generate new employment and many new micro-entrepreneurship opportunities.

The history of technology has shown that each new cycle brings more opportunities and employment than before. In the 1990s, when custom-built software gave way to packaged software like SAP and Oracle, there were worries about the fate of IT firms that did bespoke development. But that shift created more new jobs in implementation, support and maintenance of packaged software than were lost in custom development.

Consequently, the onset of the internet in the 2000s gave rise to new opportunities in e-business that helped IT industry grow at a fast pace. Take Tata Consultancy Services (TCS), which has grown to over 380,000 employees. During 2015-17, TCS has hired 2.3 lakh employees (2014-15: 67,123; 2015-16: 90,182; 2016-17: 78,912). In 2017-18, it has already made 20,693 job offers to engineering graduates and continues to hire.

Emerging technologies in automation and AI will replace some of the technological skills that have traditionally been provided by the IT services industry. But the exponential increase in digital use in every industry will only increase the overall number of jobs being created.

New jobs are always different from old jobs. The nature of new jobs always has a different machine-human interface and at the time has always been deemed to be more skilled and more complex than previous ones. But historically, people have adapted and learnt new skills.

The introduction of computer-aided design and manufacturing improved product quality in the car industry. The introduction of microprocessors in the early 1970s generated a new wave of process innovations based on digitisation. Most modern airplanes today ‘fly by wire’, with pilots only guiding them in complex tasks like take-offs, landings and for handling exceptions.

But using computers to fly did not reduce opportunities for human pilots. Instead, the increase in airplane productivity has only increased the number of jobs for pilots because airlines are more efficient.

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