The information technology (IT) industry in India made significant contributions to the US economy in 2021 in terms of employment and investments to impart training to the next-gen employees and foster technological change, according to reports conducted by NASSCOM, an apex body of the IT-BPM industry in India.
The two reports by NASSCOM are viz., “Impact of Indian Technology companies on the US Economy” and “Building the current and future US workforce: role of the Indian technology industry in the US” that highlight the contribution of India-based technology companies to the economy of the US and how these companies meet the demand for skilled tech talent there.
The tech companies from India have spent $396 Bn in terms of sales output in the US, thereby supporting the total creation of 1.6 Mn jobs and contributing $198 Bn to the economy of the US. This is more than the combined economies of 20 states across the US in 2021.
The NASSCOM reports said, “From the value chain through to the end customers, Indian technology companies invest in American talent and technology that they augment with their global resources to develop and produce cutting-edge innovations for industries and clients.”
The IT sector directly generated revenue worth $103 Bn in the USA and employed over 2.07 lac people in 2021, thereby registering a growth of 32 per cent and 22 per cent, respectively, over 2017.
Besides, the contribution to the gross domestic product from operational and investment spending channels amounted to $80 Bn in 2021, registering an increase of 40 per cent since 2017.
An average wage of $106,360 was generated for US employees, according to the reports.
Sharing her views, NASSCOM President, Debjani Ghosh said, “The Indian technology industry makes a critical contribution to the US economy through local investments, fuelling innovation and the labour force, and enabling skill development for the local workforce.”
“The US today has one of the largest demand-supply gaps compared to other geographies. The Indian tech sector works with more than 75% of the Fortune 500 companies, most of them headquartered in the US, and is, therefore, well equipped to understand and meet the critical skill challenges of the digital age,” added Ghosh.
She further said, “Strategic collaborations between both the nations, industry partners, and the academia will be the key to plug this demand-supply gap and create growth-oriented solutions that focus on building human capital to further enhance the US economy’s competitiveness globally.”
The NASSCOM reports also noted the sizable chunk of investments made by the Indian tech industry in the US to increase employment and build next-gen talent. The NASSCOM said that Indian firms made investments to the tune of $1.1 Bn, and forged partnerships with about 180 colleges and universities to diversify the STEM (science, technology, engineering, and mathematics) pipeline in the US. It also contributed $3 Mn merely for kindergarten-to-twelfth standard initiatives, thereby making an impact on over 2.9 Mn students and teachers in the US. As per the report, demand for STEM occupations in the US is likely to grow rapidly, 1.5 times faster than non-STEM occupations during the course of the next decade. IT occupations are likely to drive growth in this demand by about 70 per cent growth.