India could play the catalyst for tech innovation across the world
Over the past few decades, India has played a decisive role in serving as an innovation powerhouse of the world. Like fine wine, the Indian tech ecosystem has matured and become truly world class. From helping the world deal with the infamous Y2K crisis to ensuring business resilience for the world during the gloomy days of the pandemic, one message that came out strongly was this: Whatever the challenge, India is the solution. The Indian technology industry today has a presence in over 100 countries and draws on employees of over 150 nationalities. As per the Global Innovation Index 2021 ranking, India is the top innovative country in central and south Asia and holds the record for over-performing on innovation relative to its level of development for the 11th year in a row. This trend is also reflected in the number of patents filed by Indian domiciled companies in the West, mostly in the field of emerging technologies. From the listing of Freshworks to Indian start-ups such as Meesho and Innov8 making their way to Silicon Valley, the Indian startup story has become real.
India’s sweet spot is its leadership in building inclusive public technologies. No other country has used and designed technology for the larger good of society as we have. We’ve attracted global attention for it. Google, while proposing an inter-bank settlement system in the US, cited its extensive experience with India’s Unified Payments Interface (UPI) and shared learnings from here that the West should emulate. So what sets us apart? Several factors, including India’s focus on technology and service delivery, ease of doing business, world-class infrastructure, favourable demographics, a vibrant startup ecosystem and a vast pool of digital talent, allow us to strategically position India as the innovation nerve centre of the world.
Indian tech companies have become an integral part of the global economy: According to our recent study with S&P Global, Indian IT contributed not only $80 billion to the US gross domestic product in 2021 and employed over 600,000 people, but also strengthened the talent foundation with a strong focus on bridging the science, technology, engineering and math (STEM) gap.
As per data published by the US Department of State, nearly 200,000 Indian students in the country contribute $7.7 billion annually to the US economy. From the value chain through to end customers, Indian technology firms invest in American talent and technology that they augment with their global resources to develop cutting-edge innovations. Our research indicates that since 2017, Indian IT has generated $103 billion of revenue and directly employed 207,000 people in the US. By the third quarter of 2020, when the world was tackling the ripple effects of covid, innovative solutions—both to combat the disease and adjust to a socially-distanced world—were developed rapidly. Many of these innovations in the West were developed by the Indian technology industry.
Fuelling the global economy with world-class digital talent: In 2021, there were nearly six job postings in the US for every one available computer and math worker. That number has risen to 11 open postings per available IT worker in 2022 amid a rising need for digitization. This skill shortage in IT occupations is not just a US issue, but a global challenge. In a knowledge economy, people are our most strategic asset. And the Indian technology industry is well positioned to help close the STEM gap. India has a higher number of women STEM graduates than the West. On top of that, our IT workforce is shattering barriers of the urban-rural divide. With the rising pace of our digital transformation, industries today not only need engineers from large metros, but talent that specializes in arts, healthcare, finance and other niche domains. As a result, India now is the largest tech hub, with $227 billion in expected 2022 revenue. Not just tech services, the software as a service (SaaS) movement, emerging from India and built for the rest of the world, is expected to create $1 trillion in value and almost a quarter of the industry’s revenues by 2030.
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