By Saurabh Srivastava
I am mystified at the unholy glee with which a section of the media is writing off an industry that should be celebrated. One of the greatest success stories of modern India, the software industry has grown from about $50 million to over $150 billion over less than 30 years and is envied and feared by the world. It is the original ‘Make in India’ flag-bearer, the largest employer in the organised private sector, accounts for 8 per cent of GDP growth, 65 per cent of services exports, and 25 per cent of all exports.
It attracted global venture capital (VC) and private equity (PE) to India, ushered in global standards of governance, created the highest levels of employee ownership and wealth, and set standards for employee care. It created the brand ‘New India’.
This success was achieved in unbelievably adverse conditions. When a handful of us founded the National Association of Software and Services Companies (Nasscom) in 1988, India had a 2 per cent ‘Hindu’ rate of GDP growth, no domestic market, a few weeks of foreign exchange leading to restrictions on foreign travel, one year to create a company with approvals, 160 per cent import duties on hardware and software, telecom leased lines transmitting at 9.6K (when they worked), no VC, no debt, and all the IITs producing perhaps 100 computer graduates.
Dinesh, maybe now is the time to tell the media you’re a Pakistani programmer
In this environment, we created a world-beating industry by focusing on innovation and quality. By 2000, we had more Globally Quality-certified companies than any other country. Aware of potential visa issues, we reduced dependence on on-site services and ‘pioneered’ offshore delivery from multiple locations.
We overcame the shortage of IT grads by working with the government and the Indian Institute of Management, Ahmedabad, to create a new Master of Computer Applications (MCA) degree. We built in-house capability to train large numbers of fresh non-IT grads into fully deployable resources in 6-9 months.
We invented a unique ‘delivery model’ using a few senior people, masses of well-trained fresh graduates, and rigorously designed robust processes to deliver projects to the same quality and time specs as global players with large numbers of experienced staff.
While the global majors dismissed us as a cost bubble that would burst with rising salaries, we had seriously innovated. We had taken the entire value chain from the customer’s requirements to the last line of code, disaggregated it, done each part differently, and then put it together again, to deliver the same or better value at alower price.
We survived the internet bust of 2000, the economic meltdown of 2008, and have withstood threats and competition from large global players from the US and Europe as well as emerging economies in Eastern Europe and Asia.
We have prospered despite blatant protectionism from developed countries that have disingenuously mixed trade and immigration issues, H-1B rules that favour US companies over ours, unfair social security taxes in billions of dollars that we cannot claim under US law, and the Chinese government spending tens of billions of dollars in massive subsidies and offering free plug-and-play infrastructure to seduce foreign players to set up base in China.
This is far from invoking any ‘nationalist’ argument. But sensationalising issues based on anecdotal interviewsis unfair to India’s most global and key industry, and a huge disservice to potential aspirants wishing to join it. Reports of mass layoffs are incorrect.
Six lakh people were hired in the last three years, 50,000 in Q4 of 2016-17 alone by only the top five companies. The industry will be a net hirer in 2018. Performance-linked workforce realignment, which impacts less than 3 per cent of the workforce, has barely changed this year. Lower attrition, automation and the industry focus on innovation and enhanced efficiencies have seen a gentle deceleration in hiring growth rates — but on a growing base.
Consequently, the industry expects to hire more people in the next eight years than it did in the previous eight.
The oft-quoted McKinsey study that talks of one million existing jobs being destroyed in the future also points to 1.9 million new jobs created in the same time frame. In fact, today, we account for barely 5 per cent of the global tech industry. So, we have significant headroom for growth, our vision for 2025 being $350 billion, which would add another 2.5-3 million jobs, though skill sets are changing and reskilling is key.
An industry that has succeeded by disrupting the global model understands the need to reinvent. Leading companies have been gearing up in their own way: technology acquisitions, local and global mergers and acquisitions, corporate venturing, engaging with the increasing dynamic startup ecosystem, and reskilling.
Startup and Running
The life cycle of skills is shorter. Half of today’s jobs will require new skills. With Prime Minister Narendra Modi’s focus on Digital India, Smart Cities et al, India finally has a rapidly growing domestic market. The government’s ‘Startup India’ initiative and a slew of measures like the Rs 10,000 crore ‘Fund of Funds’ have made the startup ecosystem come alive.
We now have about 20,000 startups, propelling us to the third spot in the world. Nasscom is no longer about IT services or business process outsourcing (BPO). Its 10,000 startups initiative has been a runaway success.
So, the prophets of doom can take some time off and celebrate.
(The writer is co-founder, Nasscom)
DISCLAIMER : Views expressed above are the author’s own.