The standing of the country as a labor arbitrage market can survive for the next three decades or the next thirty years or so. It’s unlikely that previously offshored projects or works could return to its home market. Information technology companies in India have stated that they have moved from a model based solely on labor arbitrage and have been hiring in huge amounts onshore. However, changes to business model have slowed growth as well as hurt margins. The jobs that moved to offshore locations would not be coming back in any big quantities since labor arbitrage economies continue to be attractive.
THE LARGE TALENT BASE IN INDIA
IT industry trends continue to evolve to meet the changing demands. Around one million engineers join the job market each year and salaries and wages for fresh engineers without specialized skills have stayed flat for almost a decade. However, the growing pool of talent was not taken into consideration, which really keeps a lid on the costs. Although RPA(robotic process automation) will change some ways that companies perform business, it will likely not be a drastic change. RPA is integral, but if the labor costs stay low and one could access talent at low prices, it could limit the amount of process automation that an organization could put in place. There may be no need to invest much in RPA.
Political threats to outsourcing have also reared their heads before, but companies had found ways to deal with them in the past. Although IT services industry trends, like automation would create pressure on headcount, the talent base of the country would be an advantage as the industry moves towards more digital technologies. The present limited availability of emerging/niche skills in India will put them at a premium. Nevertheless, as more and more people learn the skills, they could lose their premium status and could further limit increases in the rate of labor.
THE MARKET SIZE OF INDIA
The IT sector of India grows at a rate of twelve to fourteen percent. Furthermore, the sector is also expected to triple the yearly revenue to reach $350 billion by 2025. Employees from start-ups have formed their own start-ups, expanding the start-up ecosystem of the country. Among the global start-up environments, India ranks third.
In the next decade, India would require hundreds of new project managers. Furthermore, the country would emerge as the fastest growing country for project management-oriented employment in the world. The growth would be on account of the expansion in major sectors, such as construction and manufacturing, technology, information services, finance, publishing and more.
The public cloud services market is slated to grow to 35.9 percent, to reach $1.3 billion. The increased penetration of the internet and the fast growth of e-commerce are the key drivers for the continuous growth of data center co-location as well as hosting market in the country. The Indian Healthcare IT market is valued at $1 billion at present and expected to grow 1.5 times by the year 2020. The B2B e-commerce market in India is projected to reach $700 billion by 2020. On the other hand, the B2C e-commerce market is expected to reach $102 billion in 2020. Information technology companies in the country have moved away from a model that’s purely based on labor arbitrage and been hiring huge onshore amounts.
The current figures are a clear sign that the biggest outsourcing firms in India are succeeding at a non-linear growth, wherein revenues rise disproportionately than with hiring. Although the numbers are great news for an industry that attempts to defend the profit margins, it raises concerns over the future of hiring and engineering jobs availability in a sector that hires more than three million people. The hiring rate would slow down, but would continue to grow. But this would not be at an incredibly fast rate since the number of people per value delivered would continue to go down. This is the point of income as per employee, which happens in each industry. Software companies need lesser people for generating revenue from high-paying, newer services, like data analytics and cloud computing. They’re rapidly adding capabilities in the areas as low-end back-office services that define the outsourcing boom of the country.
For more than sixty years, India’s economy continues to grow. The government heavily invested in modernizing business infrastructure and or course its giant IT industry. It continues to fascinate foreign investment as well as employment creation. Tax grants and incentives enable the country to emerge as a high-technology business park. Indian workers could serve customers and clients in the US, the UK during early morning or late evening periods without any problem. The different time zone enables foreign clients get their projects done in time.
THE LARGE TALENT BASE IN INDIA
IT industry trends continue to evolve to meet the changing demands. Around one million engineers join the job market each year and salaries and wages for fresh engineers without specialized skills have stayed flat for almost a decade. However, the growing pool of talent was not taken into consideration, which really keeps a lid on the costs. Although RPA(robotic process automation) will change some ways that companies perform business, it will likely not be a drastic change. RPA is integral, but if the labor costs stay low and one could access talent at low prices, it could limit the amount of process automation that an organization could put in place. There may be no need to invest much in RPA.
Political threats to outsourcing have also reared their heads before, but companies had found ways to deal with them in the past. Although IT services industry trends, like automation would create pressure on headcount, the talent base of the country would be an advantage as the industry moves towards more digital technologies. The present limited availability of emerging/niche skills in India will put them at a premium. Nevertheless, as more and more people learn the skills, they could lose their premium status and could further limit increases in the rate of labor.
THE MARKET SIZE OF INDIA
The IT sector of India grows at a rate of twelve to fourteen percent. Furthermore, the sector is also expected to triple the yearly revenue to reach $350 billion by 2025. Employees from start-ups have formed their own start-ups, expanding the start-up ecosystem of the country. Among the global start-up environments, India ranks third.
In the next decade, India would require hundreds of new project managers. Furthermore, the country would emerge as the fastest growing country for project management-oriented employment in the world. The growth would be on account of the expansion in major sectors, such as construction and manufacturing, technology, information services, finance, publishing and more.
The public cloud services market is slated to grow to 35.9 percent, to reach $1.3 billion. The increased penetration of the internet and the fast growth of e-commerce are the key drivers for the continuous growth of data center co-location as well as hosting market in the country. The Indian Healthcare IT market is valued at $1 billion at present and expected to grow 1.5 times by the year 2020. The B2B e-commerce market in India is projected to reach $700 billion by 2020. On the other hand, the B2C e-commerce market is expected to reach $102 billion in 2020. Information technology companies in the country have moved away from a model that’s purely based on labor arbitrage and been hiring huge onshore amounts.
The current figures are a clear sign that the biggest outsourcing firms in India are succeeding at a non-linear growth, wherein revenues rise disproportionately than with hiring. Although the numbers are great news for an industry that attempts to defend the profit margins, it raises concerns over the future of hiring and engineering jobs availability in a sector that hires more than three million people. The hiring rate would slow down, but would continue to grow. But this would not be at an incredibly fast rate since the number of people per value delivered would continue to go down. This is the point of income as per employee, which happens in each industry. Software companies need lesser people for generating revenue from high-paying, newer services, like data analytics and cloud computing. They’re rapidly adding capabilities in the areas as low-end back-office services that define the outsourcing boom of the country.
For more than sixty years, India’s economy continues to grow. The government heavily invested in modernizing business infrastructure and or course its giant IT industry. It continues to fascinate foreign investment as well as employment creation. Tax grants and incentives enable the country to emerge as a high-technology business park. Indian workers could serve customers and clients in the US, the UK during early morning or late evening periods without any problem. The different time zone enables foreign clients get their projects done in time.
