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.
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.
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.
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.
So, the prophets of doom can take some time off and celebrate.