However, in order to achieve the goal of making India a $1 trillion digital economy, efforts must be significantly increased. The need of the hour is to invest in digital transformation and achieve a 25% CAGR, which will help India become a $687 billion IT powerhouse by 2027 and bring us closer to the goal of becoming a $1 trillion digital economy within this decade.
While some might view this as a lofty goal, it’s not, rather it necessitates a strategic rethink and a commitment to a multi-pronged approach to building a ‘Digital Aatmanirbhar Bharat‘.
R&D supercharging Digital India vision
Digital technologies are essential for R&D operations, and R&D is critical to advancing India’s digital vision. To keep up with and fuel India’s digital transformation, continuous research and development of new IT products and services, as well as the production of innovative solutions, are required. We must integrate next-generation technologies such as data analytics, cloud platforms & solutions, AI/ML, metaverse, cybersecurity, and automation to build tools for every industry, including manufacturing, healthcare, agriculture, etc. The necessary investments for increased R&D spending can be made through provisions such as tax breaks for firms and the establishment of networks of innovation hubs that house industries, R&D labs, academic institutions, start-up incubators and production facilities, all in one geographic location. Further, initiatives such as FICCI’s innovation clusters can help foster innovation in India by catalysing actions to realise the country’s full economic potential.
According to the recent Economic Survey Report, GCCs (Global Capability Centers) in India are increasingly performing complex R&D functions, leveraging futuristic technologies, developing digitally innovative products, and building India-based ER&D hubs. This is indeed a significant step towards solidifying R&D innovation and furthering the Digital India vision. We must support this development and work towards ensuring that more global firms open up capability centers in India.
Aspiring Towards IT Uplift via SkillingWith digital transformation becoming the norm across all industries, the IT sector will require a large number of highly skilled tech professionals, including developers, network engineers, coders, data scientists, 3D, AR/VR professionals, and others. In the face of unprecedented economic, social, and environmental disruptions, a workforce equipped with the right skills can address emerging challenges and assist businesses in growing by increasing the value quotient.
According to estimates, approximately one million skilled professionals will be required in AI and data science roles alone by 2024. A quick look at the current situation reveals that the country’s IT sector employs approximately five million people and generates approximately $225 billion in revenue. Based on this average, India requires an additional 10 million skilled workers to reach the $453 billion mark, and 15 million workers to reach the $687 billion mark. As a result, we need to hire approximately 10 million more IT professionals over the next five years. To make this happen, a pan-India network of IT education and skill development is required.
In order to prepare a future-ready workforce, I believe that there should be a greater emphasis on vocational skills in elementary and secondary education, an increase in degree apprenticeships (on-the-job learning) in universities, continuous skilling and upskilling opportunities provided by organisations, and a relaxation of UGC guidelines for blended learning, etc.
Policy Reforms to Fuel Innovation
The ongoing IT evolution and emergence of India as the world’s leading outsourcing destination, accounting for more than 50% of the global outsourcing market, has been facilitated to a large extent by government interventions and policy changes. Today, Indian IT exports account for more than 51% of total revenue. However, we have the opportunity to build a $600 billion + industry in the next five years. We are globally recognized as the ‘services hub of the world’, but to build a powerful ecosystem that works for all, we need to become the ‘concept-to-market hub of the world’.
The Digital India framework has served as a guiding principle for digital transformation in industries such as manufacturing, logistics, healthcare, BFSI, retail, education, and even agriculture. Moreover, the country currently has over 27,000 tech-driven startups registered with DPIIT, with another 1,300 added each year. Policy changes are needed to expand government initiatives such as Startup India, Skill India, and funding opportunities. The recent Union Budget 2023 is a positive step forward, emphasizing the importance of digital in the Indian economy. It sends the right message about 5G labs, establishing AI centres of excellence, and focusing on skilling, which is critical for the country as we live through the Prime Minister’s vision of Techade.
Over the last three decades, the IT sector has emerged as a key contributor to economic growth, and the time has come to explore and harness the full potential of digital technologies. India has the potential to pursue its $1 trillion-plus digital economy vision while also unlocking unprecedented socioeconomic growth across all sectors through fiscal and policy initiatives, as well as adequate skill development and R&D infrastructure. The current initiatives are well-directed, and we look forward to furthering these steps in the coming years with consistent and dedicated support from industry stakeholders.
The writer is Chief Strategy Officer & Head of Growth, Tech Mahindra
(Note: views expressed are his own)