Sunday, May 10, 2009

What will be the future of IT in India?

On one hand there is "Recession in the US" and on the other hand there is a potential Domestic IT market in India in the long run.

Till recently in 2006, the IT exports from India were accounted 60% by the US, 20% by the UK and rest by other countries and India's Domestic IT market. "Recession in the US" has changed this scenario. There have been may job cuts, lay-offs and cost cuttings specially by the companies which work for clients from US. Followed by this many new strategies are emerging like "reduce employees, increase the workload" to counter balance the effect of recession.

The US government is all set with various plans and strategies [2] to recover from the effect of recession. But no one knows about the future. We can only speculate the aftermath of the plans yet to be implemented. We can only work hard and hope for the better, after all it affects the Indian economy as well to a very large extent.

Did you see the point here? Well, the point is that even if the US does not complete recover from the recession right not, it "will" recover slowly. It will take its time to improve but will not atleast worsen the situation assuming that the new US Government policies are implemented and practiced successfully.

For the good news, you might/not be surprised to know that there is a lot of scope in Domestic IT market in India.

"Domestic IT spending is expected to increase further in the coming years due to increase in telecom and internet penetration, higher IT budget allocations by the governments, IT spending by BFSI (banking, financial services and insurance) sector, manufacturing and engineering firms, automobiles and retail sector, and greater focus on maintenance and security infrastructure by vendor firms." [1]

This means that there is a large scope for ventures that can be done with IT in mind.

"According to the Broadband Policy 2004 document published by the Ministry of Communication and Information Technology, Government of India, New Delhi, internet connectivity is expected to increase from 6 millions in 2005 to 40 million in 2010. A denser telephone and internet network along with increased PC ownership will provide the opportunities for increasing the rate of training people for the IT industry." [1]

This meas that there will be an increasing user base for the services/products created using the IT infrastructure.

So overall, we ( as IT workers ) need not worry about our futures. And as the universal rule "survival of the fittest" says that we continuously need to brush up our skills to be on the edge, so we just have to keep the spirit alive.

"Although the domestic IT market is just marginally more than half of the export, it has started growing at a rate of 20% per year or so during the recent years." [1]

You might be temped by now to think of a venture into the Indian Domestic IT Industry. Wait! It is feasible to start your venture if you target only the urban areas ( like metro cities ). But there are some potential problems which might have to be resolved first if you target rural areas:

• What exactly are you trying to correct in the rural areas? ( it applies to urban areas as well )
• How well will the rural people able to use the services you build using IT? ( education, familiarity with the technology etc.)
• How easy will it be to make it accessible to them? ( hardware, software, regualtory issues, communication issues, tarrifs etc. )

This is my effort to understand the future prospects for the IT industry in India. Your comments are welcome.

[1] "Information Technology in India: Present Status and Future Prospects for Economic Development"

[2] "Larry Summers Speech, Brookings Institution, The Obama Program and the Current Economic Crisis"


sachingaur said...

Good investigation.....

Some quick keywords....

Sustainability [recycling, resource management like power, transport water etc]

Education, Citizen Journalism.

These are my favorite areas.

Also, some hobby stuff like travel, sports, interest groups might apply as well to India. definitely not reinventing the wheel but doing it differently....

asif said...

good findings ...

as for new US administration is concerned, there is very apt description... "Inmates are running asylum".
The guyz who use to tell all the world that open the economy open the economy are now behaving like big hypocrites.

As for indian IT industry is concerned turning inwards can be a very big move and believe me almost all big vendors(TCS included ;-) ) are working on frameworks/infra which can provide softwares solutions at a very low margins. Next two three years will see a lot of changes in markets dynamics.
and for those who have a enterpreneur in their heart this is the best time.

tuxdna said...

Rightly said Asif. I also see that there are a lot of initiatives being taken. For example, in the telecommunication domain ( which everyone of us use daily ) Mobile Value Added Services are catching up fast; computerization of Education sector, computerization of banks/financial institutions, online presence of mass-media organizations( Times Now, Network 18 etc. ) and the like makes me feel good. Various state governments and several NGO's in India are researching for the benefit of rural areas using IT in India. So my dear friend Lets wait for light, coz the future is bright :)

Ankit Gupta said...

challenges in Indian environment are huge. Imagine handling a project like LIC (currently having 23 crores policies). On the contrary, abroad clients need quality even if they are having 16 lakh policies. And here is where you make revenue. You add some small functionality to your previous version, foreign clients will buy it as they JUST want the best, whereas you will to have to prove the need of that functionality to Indian clients.

on a lighter note...Indian clients are very hard to deal with.

They don't pay for parties, they are NOT professionals and they make you work hard for each 'paise' they spend.
But you do go to sleep at night when wrking for Indian clients ;)

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