The Indian technology sector rallied around to grow at 2.3% year-on-year on the back of rapid acceleration in digital transformation and tech adoption, industry body National Association of Software & Services Companies (NASSCOM) said on Monday. This was part of its Strategic Review 2021, titled, ‘New World: The Future is Virtual’, which had key trends that shaped 2020-21 and the road ahead for the new normal. The growth, NASSCOM said, came at a time the global output is estimated to have shrunk 3.2%. The industry is also set to post a 2.3% rise in revenues to $194 billion in the current fiscal, NASSCOM said.
As per the report, despite headwinds in 2020, Indian technology sector contributed around 8% relative share to the national GDP — with 52% relative share in services exports, and 50% share in total FDI (based on FDI inflows for the period April to September 2020).
It added that the Indian tech industry continues to be a net hirer, with significant focus on digital upskilling. The industry is expected to see 1,38,000 net new hires by the end of FY21, taking the total employee base to 4.47 million in FY 2020-21. Digital talent pool is expected to cross 1.17 million, growing at 32% over last year.
Investing in digital continues to rise as an imperative for the industry, with organisations building their capabilities and aligning business models to digital practices - upto 28-30% of the industry revenues was recorded for digital.
The report added the Indian domestic market, driven by hardware-led demand, continued to show resilience — growing at 3.4% in the year.
India witnessed more than 115,000 tech patents filed by companies in India in the last 5 years, it said.
NASSCOM Chairman U B Pravin Rao said, “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.”
“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,” he added.
It added that the industry witnessed 146 M&A deals in 2020, 90% of which 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 and Healthcare were key growth verticals during the year.
The consolidated revenues of top listed technology companies recorded a growth of 5.3% in H2 2020 over H1 2020. After an increase in focus on digital upskilling initiatives, revenue per employee grew at 5.5% in H2 2020 as compared to H1 2020.
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.