The Indian technology sector is set to close the financial year ended March 2021 at $194 billion in aggregate revenue, up 2.3% year-over-year, as per National Association of Software and Services Companies (NASSCOM) estimates on Monday.
The upbeat figure is projected with encouragement from 2020’s pandemic push on digital transformation and technology adoption, even as global output was estimated to have shrunk by 3.2% last year, NASSCOM said.
The information technology (IT) service industry lobby group made the announcement in the unveiling of its latest market research report to capture trends that shaped 2020-21 and the road ahead for the new normal -- titled New World: The Future is Virtual.
The technology industry in the country, NASSCOM said, contributed to about 8% relative share to the national gross domestic product (GDP), with 52% relative share in services exports, and 50% share in total foreign direct investment (FDI). FDI data was pulled from April to September 2020.
The industry is expected to add over 138,000 net new hires in the financial year ended March 2021, taking the total employee base to 4.47 million, the report said adding that the digital talent pool expected to cross 1.17 million, growing at 32% over the previous year.
Addressing the Indian government’s clarion call of an Atmanirbhar Bharat, NASSCOM said India witnessed more than 115,000 technology patents filed by companies in India in the last five years.
Additionally, the industry saw an overall shift of 10% in outcome-based pricing; while offshore witnessed more than 4% shift in 2020 and attrition rate dropped by 50% in H2 2020 compared to H1.
On whether the shift to outcome-based pricing is a linear trend with rising digital revenues for IT vendors, NASSCOM chairman and Infosys COO Pravin Rao told TechCircle “It's nothing to do with digital per se. It's more about Indian tech industry being more proactive in terms of understanding the opportunities… and taking these ideas to the customer and saying I’m willing to put my skin in the game… some of these (software opportunities) have been in pilot stages, only now are we seeing these projects move from pilot to full fledged implementation. In some cases it's a leap of faith. But it's also that we are now much more confident of the solutions we deliver.”
Increased adoption of -as-a-service models, and platform based models is another associated factor to the gaining traction of outcome based pricing in the industry, Rao added.
In terms of the lobby group’s priorities for 2021, it said it aims to build an industry narrative around trust, talent, people first innovation, responsible technology and agility; strengthen advocacy and adoption of deep tech; advocate on a hybrid operating model at workplaces; build talent; and accelerate partnerships with the Indian government and international governments to speed up market access.
Other key metrics from the report
- The industry witnessed 146 merger and acquisition deals in 2020, 90% of which were digitally focused.
- Companies saw a significant rise of 80% in cloud adoption during H1 FY2021 versus H2 FY2020.
- Further, Continental Europe, APAC emerged as one of the strongest growth geographies in FY2021.
- BFSI & Healthcare were key growth verticals during the year.
- 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. 70% of the survey respondents expect to have higher prevalence of remote work along with a boost in the gig workforce in 2021.