India IT Shining. Really..
Our team just returned from the India ICT Summit 2010 at Le Meridian, Kochi. The Summit, organized by the Confederation of Indian Industry, in collaboration with the Government of Kerala, is titled “Changing Role of an IT industry – Partnering for Transformation”.
The 2010 Summit focused on how Indian ICT companies can help global clients in business transformation. Personally I was glad that the focus was also turned inward to see how technology can be leveraged to transform our domestic market, including governance, within India. This focus is critical for India’s IT sector to really take off, especially keeping in mind the tremendous potential in its internal markets.
Everybody knows that the Indian IT sector exports is expected to touch $71.7 billion by December 2010 (5.8% of our GDP) and is projected to touch $175 billion by 2020. But our domestic market is likely to reach $50 billion in revenues by 2020 (indicating a penetration of 50-55 per cent of the total addressable market of $90 billion to $100 billion and a CAGR of 14 per cent from 2008 until 2020) – Som Mittal, President, NASSCOM
If this is not good news for Indian IT, I do not know what is! And what can Indian IT companies do to get ready to capitalize on this growth?
According to the facts and figures provided in Ernst & Young’s report “Competing for Growth – Winning in the new Economy” (handed to all attendees at the Summit), GDP Growth Forecast for India and China by 2015 is 83% and 74% respectively. UK? 11%. USA? Closer to 15%. With tremendous growth, comes labor cost inflation. The top 4 Emerging markets – India, Australia, Brazil and CSE Europe – are seeing rapid increases in labor costs due to increased competition. And more companies in developed markets are realizing that emerging markets are no longer quick cash cows, or for the short-term. As local players in these countries discover the “hidden potential” in their country, developed markets now perceive the “cost and the challenges involved in entering and winning in these complex markets.
IT companies in India are standing at the cusp of incredible growth potential, intense global competition, and increased stakeholder confidence. Add cost competitiveness (though not for long!), a vibrant domestic market and a young, educated English speaking workforce (half a billion Indians are under the age of 25), we seem to have all the factors rooting for us to succeed in the new Economy.