In the face of significant worldwide obstacles, India showcased impressive economic expansion in the fiscal year 2022-23, registering a growth rate of 7.2 percent. This growth placed India’s rate second highest among G20 nations, nearly twice the average for emerging market economies. Projections suggest that by 2027, the Indian economy will surpass Japan and Germany to become the world’s third-largest, and by 2075, it is poised to claim the second spot. Anticipated figures indicate that by 2024-2025, India will boast a $4 trillion economy, with aspirations to attain developed status by 2047.
The information technology industry
The Indian information technology (IT) sector has emerged as a worldwide force, making substantial contributions to the nation’s economy and technological advancement. The skilled labor force, entrepreneurial culture, and favorable government policies have propelled the Indian technology sector to attain global excellence. This impressive growth trajectory has become a pivotal force driving India’s development.
Housing major international IT giants like Infosys, TCS, Tech Mahindra, and Wipro, the Indian IT sector employs approximately 5.4 million people, accounts for roughly 7.5 percent of India’s Gross Domestic Product (GDP), and generated $227 billion in revenue in 2022 and is projected to generate $245 billion in revenue in 2023.
Top IT roles
Initially recognized for its software services and outsourcing excellence, the IT industry has evolved to adopt technologies like artificial intelligence (AI), cloud computing, blockchain, and the Internet of Things (IoT). In 2024, India Today reports that these five IT roles will be in high demand:
- Data scientists: Data science drives decision-making and transcends industry boundaries, finding applications across various sectors, including finance, healthcare, and e-commerce. Cities in India such as Bangalore, Delhi, Hyderabad, and Mumbai have emerged as vibrant centers for professionals in this role. As a result, the data science and analytics industry is set to reach $3.03 billion, with 72,000+ data science job openings in 2024 and 137,500+ by 2025.
- Artificial intelligence (AI) and machine learning (ML): AI and ML jobs will take precedence in the Indian job market over the next five years, with the surge expected to create as many as 69 million new jobs. A report by the National Association of Software and Services Companies (NASSCOM), in partnership with Salesforce and Draup, ranks India first in AI skill adoption and talent concentration globally. India’s AI Skills Penetration Factor stands at an impressive 09, surpassing all G20 and Organization for Economic Cooperation and Development (OECD) nations. This indicates that India’s technology professionals are three times more likely to possess or report AI skills than other countries.
- Cloud engineers: In 2024, Indian end-users are expected to spend approximately $13.6 billion on public cloud services, up from $4.2 billion in 2022. The increasing demand for cloud engineers stems from this thriving cloud technology market and the extensive integration of cloud computing across businesses of various sizes.
- Cybersecurity analysts: The frequency and complexity of cyber assaults are rising, posing challenges for organizations to defend against them effectively. In fact, in quarter two of 2023, India faced a 90 percent increase in cyberattacks, emphasizing the need for robust security measures, including powerful firewalls. Sectors such as banking, insurance, and healthcare face heightened vulnerability, with distributed denial-of-service (DDoS) and Bot attacks being the predominant threats. In May 2023, there were about 40,000 unfilled cybersecurity positions, highlighting India’s increasing need for proficient cybersecurity experts. Yet, the demand-supply gap was 30 percent, presenting a significant skill challenge.
- Full-stack web developers: By 2024, India is projected to boast the largest pool of developers globally, with a growth rate of 39 percent, surpassing the United States’ number of web developers. And, as one of India’s highest-paying IT positions, full-stack developers will remain in great demand as long as there’s a need for web application development.
Industries with the highest IT spending
International Data Corporation (IDC) reports indicate that the following industries are undergoing substantial digital transformation, indicating a heightened need for IT services and solutions to navigate these changes.
- Healthcare: The pandemic underscored the significance of a robust IT infrastructure in the healthcare sector. The digital innovations reshaping this industry include telemedicine, AI-assisted diagnostic tools, electronic health records, and personalized medicine.
- Retail and e-commerce: With the surge in online shopping, retailers continue to invest in technologies such as AI, ML, augmented reality (AR)/virtual reality (VR), and IoT to deliver tailored, seamless, and captivating customer experiences.
- Finance and banking: Fintech solutions encompassing payments, insurance, personal finance, crowdfunding, and blockchain technology are gaining paramount importance. Mobile banking, digital wallets, and cryptocurrency signify a digital future in finance.
- Logistics and supply chain: Companies leverage technologies like AI, machine learning, IoT, and blockchain to enhance efficiency, transparency, and reliability. These technologies facilitate the management of intricate supply chains, optimizing logistics, and improving forecasting accuracy.
- Agriculture: Ag-tech stands as an expanding field in agriculture. Farming practices are optimized to boost yield and minimize environmental impact by applying big data, AI, drones, and IoT technologies.
- Education: The global shift to remote learning during the pandemic escalated the demand for advanced IT solutions in education. The educational technology (ed-tech) industry is experiencing exponential growth, revolutionizing education through online learning, AI-driven tutors, virtual reality classrooms, and digital textbooks.
- Manufacturing: The manufacturing sector is currently amid a significant transformation known as Industry 4.0, characterized by automating and streamlining manufacturing processes through integrating IoT, AI, robotics, cloud computing, and data analytics.
As the IT sector expands at an accelerated pace, organizations face an increasingly competitive landscape for tech talent. Challenges employers will face in 2024 include:
- Talent competition: The technology sector in India is experiencing rapid expansion, leading to an unprecedented demand for proficient tech professionals. Consequently, a fiercely competitive job market has emerged, with numerous firms vying for the same talent pool. Companies face challenges in attracting and retaining top tech professionals, as rivals often lure them away during the 90-day notice period between jobs with more appealing salary packages, benefits, and working environments.
- Shortage of skilled talent due to new technologies: A major hurdle lies in the scarcity of skilled IT professionals in emerging technologies. Although India is projected to have a talent surplus by 2030, including more than one million highly-skilled tech professionals, there is a question about the skill sets and expertise these individuals bring. As organizations adopt new technologies, the demand for skilled talent in these technologies will rise, potentially leading to skills gaps and causing challenges in meeting industry demands.
- Reduced hiring of freshers: IT service organizations based in India are contemplating reducing the recruitment of freshers (fresh graduates) by 30 percent year-on-year in fiscal year 2024 due to a sluggish deal pipeline, compounded by lingering concerns about a recession in the United States. As companies that typically recruit extensively from campuses decrease their hiring initiatives, it’s created restricted job offers and heightened competition among students striving for those openings.
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This blog was written by Navaneel Das.