India is well positioned to enhance and leverage its existing ICT capabilities for a leadership role. Technology has transformational power and it is a great leveller of opportunity within and across economies
R K Goyal, Joint Secretary, Department of Electronics and Information Technology, Ministry of Communications & Information Technology, Government of India
Information and Communication Technologies (ICTs) play a crucial role in economic and social development efforts around the world. ICT has great potential for reducing poverty and fostering growth in developing countries. By connecting people and places, ICTs play a vital role in the national, regional and global development.More importantly, ICT has immense potential in accelerating the growth momentum by enhancing efficiency, competitiveness and technological edge across other sectors, including strategic sectors. Equally significant is the contribution of ICTE in enabling inclusive growth and development and in ensuring that people across the length and breadth of the country have access to services as well as the opportunities generated by growth.
The Rise of IT-ITES
This sector has been contributing significantly to the economic growth of the country and has further potential to script India’s future across the economy, society and governance and epitomize what modern, resurgent and young India is capable of accomplishing. The Indian IT-ITES sector has contributed significantly to the Indian Growth story. Not only has it weathered uncertainties in the global business environment, and generated aggregate revenue of USD 108 billion in 2013. India has a 52 per cent market share highlighting India’s continued competitiveness and the effectiveness in this sector.
The sector is contributing eight percent of India’s GDP, 23-25 percent of exports and seven percent of FDI. India has also become a major R&D centre for many global players and of late many start-ups have started creating many innovative solutions. The industry continues to be a net employment generator thus providing direct employment to about three million, and indirectly employing nine million people. While the global macroeconomic scenario remained uncertain, the industry exhibited resilience and adaptability in continually reinventing itself to retain its appeal to clients. Embracing emerging technologies, increased customer-centricity,deepening focus on new markets and adopting new business models are some successful growth strategies followed by the industry.
India is now well positioned to enhance and leverage its existing ICT capabilities for a leadership role. Technology has transformational power and it is a great leveller of opportunity within and across economies. With the right policies and investment in infrastructure, we have the opportunity to strengthen and enhance our position as a global ICT power-house. On the domestic front, use of IT in all sectors can transform our economy, enhance equity and help the nation to rapidly improve its development indices. Also,Global Linkages can play a catalysing role in this sector for human upliftment and improving the quality of life.
Advent of new technologies
The pace of technological advance is accelerating and ICT is increasingly becoming a ubiquitous and intrinsic part of people’s behaviour and social networks as well as of business practices, government activities and service provision. These transformations will continue to move human progress forward by further leveraging ICT’s positive social, political,and economic impact on government,enterprise, and civil society alike. Services are becoming seamlessly linked through mobile,internet and other modes of delivery. Aadhaar will enable IDs to be authenticated online or via the mobile phone. A National Broadband Plan has been initiated that aims to provide Broadband Connectivity across the length and breadth of the country by 2014 through a combination of wireless and OFC/wire line. This will enable not only computers and mobile devices, but a whole range of other electronically enabled devices to be connected.This can stimulate proliferation of relevant innovative applications using mobile devices.Location based services, in any desired language,in either text or audio form have made possible by use of ICT for a new and exciting range of services.
The advent of emerging technologies like cloud computing technology has thrown up another wide range of possibilities. Industry have already begun creating new products and services leveraging the benefits of these technologies. However,these technologies because of their ubiquitous nature have again thrown new challenges for economies to synergistically work to take benefit from them particularly in e-commerce. The stage is now set for a quantum jump in this emerging sector. Another positive aspect is that there is a growing trend of entrepreneurship and product/service innovation. Therefore, it is necessary to provide an enabling environment to nurture this evolution. Software Technology Parks of India,with a significant role in emergence of the Indian IT-ITES industry, are now working towards creating an enabling infrastructure for technology innovators and incubators.
In the present knowledge era,innovation is a vital force of economic growth and therefore a high priority area in government policy making
Changing Dynamics in IT-ITES
Looking into the changing dynamics of the IT-ITES sector, Government of India has recently come up with a National IT Policy,2012. The principal policy objectives of the IT Policy is to optimally leverage our existing and evolving ICT infrastructure and capabilities to meet the growing need for high quality social sector services like education,health, skill development, welfare or benefit programmes, e-government services, economic services like banking, insurance, transportation and logistics, and other societal needs like entertainment, communications,social media, information dissemination,etc. Another major objective is to use ICT capabilities to enhance competitiveness and efficiency in manufacturing across the board and in key infrastructure sectors like power.
Other policy objectives include leveraging the mushrooming demand for products and services in these and other areas to foster innovation,catalyze manufacturing, encourage relevant R&D through academic institutions and industry and create a range of products and services that not only meet domestic needs but also address global demand as a logical extension of the IT and IT- Enabled Services (ITES) industry. Under the National IT Policy, 2012, IT-ITES market is targeted to grow to 300 bn USD by 2020. The IT/ITES sector is mainly focused towards exports,which generate around 80% of the total revenues.The current slowdown in major countries throws up new challenges for this sector and can be a significant detrimental factor for continued growth of exports. There is an urgent need for a focused effort on geographical diversification to mitigate the risk of a regional downturn.
India is one of the fastest growing markets of electronics in the world and expected to be 400 bn USD by 2020. There is potential to develop the Electronic System and Design and Manufacturing (ESDM) sector to meet our domestic demand as well as to use the capabilities so created to successfully export ESDM products from the country. The National Policy on Electronics aims to address the issue with the explicit goal of transforming India into a premier ESDM hub.
The policy is expected to create an indigenous manufacturing eco-system for electronics in the country. It will foster the manufacturing of indigenously designed and manufactured chips creating a more cyber secure ecosystem in the country. It will enable India to tap the great economic potential that this knowledge sector offers.
The increased development and manufacturing in the sector will lead to greater economic growth through more manufacturing and consequently greater employment in the sector. The Policy envisages that a turnover of USD 400 billion will create an employment for more than twenty eight million people.In the present knowledge era innovation is a vital force of economic growth and therefore a high priority area in government policy making.
Innovation-based competitive advantage requires changing and aligning processes, work culture and management. Information technologies can help in at least two of these dimensions:the processes and management of innovation. In short, ICT centric innovation is now key to any innovation paradigm and needs special focus.
The Indian ICT industry has not only transformed India’s image on the global platform, but also fuelled economic growth by energising higher education sector (especially in engineering and computer science). The industry has employed almost 10 million Indians and hence, has contributed significantly, to social transformation in the country. The Indian IT industry has continued to perform its role as the most consistent growth driver for the economy. Service, software exports and business process outsourcing (BPO) remain the mainstay of the sector.