Technological Disruptions and the Indian IT Industry: Employment Concerns and Beyond
Internet of Things (IoT) industry is one of the most dynamic sectors in India. This US$ 150 billion-strong industry employs 3.8 million people and contributes more than 9% to Indian GDP. However, this largest private-sector employer has been experiencing stress due to fast-changing business models, increased competition from other countries, restrictive visa policies, upsurge in anti-outsourcing sentiments and, most importantly, technological disruptions. These disruptive technologies—captured in a moment in the history of technological transformations as the Fourth Industrial Revolution or Industrie 4.0—principally include such developments as cloud computing, big data and analytics, Internet of Things (IoTs), automation, robotics and blockchain. While Industrie 4.0 has rendered conventional engineering expertise and low-end IT services redundant, it has the potential of creating new employment opportunities in a host of sectors including administration, banks, retail trade and online marketing. Disruptive technologies have a strong chance of transforming the nature and composition of the Indian IT industry in a big way, including endangering India’s position as the software superpower in the world. Albeit, the Indian IT industry has historically proved itself to be extraordinarily resilient and fortified during turbulent shocks of the dotcom bubble, the sub-prime crisis and US visa restrictions. Based on secondary data, this paper aims at mapping the changing nature and composition of the Indian IT industry during recent years. It tries to identify contemporary challenges to employment and business opportunities in the Indian IT industry. The paper includes policy suggestions for enhancement of relevant technological and skill capabilities in the country.
KeywordsIT industry Fourth industrial revolution Technological disruptions Internet of Things Robotics Automation India
JEL CodesF14 J23 J24 L86 O33
We express our sincere gratitude to Dibyendu Maiti (DSE, Delhi) for the opportunity, encouragement and comments in writing this chapter. Towards improving the quality of the paper useful comments, suggestions and technical help were received from Pratap C. Mohanty (IIT, Roorkee), Jaya Prakash Pradhan (CUG, Gandhinagar), Itishree Pattnaik (GIDR, Ahmedabad), Tara Nair (GIDR, Ahmedabad), Fulvio Castellacci (TIK Centre for Technology, Innovation and Culture, University of Oslo, Norway) and Grace Kite (SOAS, London). Detailed comments from Pralok Gupta (Centre for WTO Studies, IIFT, New Delhi) contributed to improving the content and readability of the paper. We are grateful to all of them. The authors remain responsible for any errors and omissions that might remain.
- Agrawal, S. (2016a). BPOs beware! Chatbots are on their way. The Times of India, June 15. Retrieved on June 10, 2016 from http://timesofindia.indiatimes.com/tech/tech-news/BPOs-beware-Chatbots-on-their-way/articleshow/52757547.cms.
- Agrawal, S. (2016b). How chatbots could soon put BPOs out of business. Retrieved on June 10, 2016 from http://economictimes.indiatimes.com/articleshow/52754634.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.
- Ahmed, G. (2012). Krugman trade theory and developing economies. China-USA Business Review, 11(12), 1557–1564.Google Scholar
- Baldwin, R. (2011). Trade and industrialisation after globalisation’s 2nd unbundling: How building and joining a supply chain are different and why it matters. Working Paper 17716. Cambridge, MA: National Bureau of Economic Research. Retrieved on April 25, 2018 from http://www.nber.org/papers/w17716.
- Bhattacharya, B. (2016). Cloud computing: The silver lining for SMEs and start-ups. PCQUEST, March 23. Retrieved on November 3, 2017 from http://www.pcquest.com/cloud-computing-the-silver-lining-for-smes-start-ups/.
- Cherian, P. (2014, October 31). Mobility and scalability of the public cloud. Dataquest, 32(20), 60.Google Scholar
- Das, A., & Phadnis, S. (2017, November 2). Infosys, Wipro’s headcount shows the kind of IT jobs will survive. The Economic Times. Retrieved on November 3, 2017 from https://economictimes.indiatimes.com/articleshow/61449803.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.
- Das, K., & Sagara, H. (2017). State and the IT industry in India: An overview. Economic and Political Weekly, 52(41), 56–64.Google Scholar
- Dawar, S., & Lacy, P. (2017, August 8). Digital disruption: Capitalizing on the 4th Industrial Revolution fuelled by digital technologies. Live Mint. Retrieved on April 10, 2018 from https://www.livemint.com/Home-Page/2No24MFhEFWjwj4pNIEMML/Digital-disruption-Capitalizing-on-the-4th-Industrial-Revol.html.
- FICCI, NASSCOM & EY. (2017). Future of jobs in India: A 2022 perspective. Retrieved on February 28, 2018 from http://www.ey.com/Publication/vwLUAssets/ey-future-of-jobs-in-india/$FILE/ey-future-of-jobs-in-india.pdf.
- Ford, M. (2015). Rise of the robots: Technology and the threat of a jobless future. New York: Basic Books.Google Scholar
- Goel, R. (2014, October 31). Digital India is the need of the hour. Dataquest, 32(20), 40–43.Google Scholar
- Golub, G. H., & Van Loan, F. C. (1996). Matrix computations. Baltimore: The Johns Hopkins University Press.Google Scholar
- HfS Research. (2016, July 5). Automation to impact 1.4 million global services jobs by 2021 with India the most affected. Retrieved on March 25, 2018 from https://www.hfsresearch.com/press-releases/automation-to-impact-14-million-global-services-jobs-by-2021-with-india-the-most-affected.
- KPMG. (2016). Global IT-BPO outsourcing deals analysis, February. Retrieved on June 8, 2018 from https://assets.kpmg.com/content/dam/kpmg/pdf/2016/03/KPMG-Deal-Tracker-3Q15.pdf.
- Kaur, B. (2015). Impact of E-Commerce on E-Retail. Journal for Studies in Management and Planning, 6(1). Retrieved on June 8, 2018 from https://edupediapublications.org/journals/index.php/JSMaP/article/view/1548.
- Kiran, P. C. (2015, September 15). When Smart Cities meet big data. Dataquest, 33(17), 52–53.Google Scholar
- Lakshmikanth, K. (2017, May 14). Indian IT firms to layoff up to 2 lakh engineers annually for next 3 years. Livemint. Retrieved on April 20, 2018 from https://www.livemint.com/Industry/Y0oIb1D6N1ADZDfq3BUhUM/Indian-IT-firms-to-layoff-up-to-2-lakh-engineers-annually-f.html.
- Mani, S. (2014). Emergence of India as the world leader in computer and information services. Economic and Political Weekly, 49(49), 51–61.Google Scholar
- McGowan, M. A., & Andrews, D. (2015). Skill mismatch and public policy in OECD countries. The Future of Productivity: Main Background Papers, Economics Department Working Papers No. 1210, ECO/WKP (2015) 28. https://www.oecd.org/eco/growth/Skill-mismatch-and-public-policy-in-OECD-countries.pdf.
- McKinsey Global Institute. (2013). Disruptive technologies: Advances that will transform life, business, and the global economy. Retrieved on November 7, 2017 from file:///C:/Users/Lenovo/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempState/Downloads/MGI_Disruptive_technologies_Full_report_May2013.pdf.Google Scholar
- Modi, D. (2015, December 23). IoT shall be the next big force to drive mobility. PCQUEST, 24–25. Retrieved on November 3, 2017 from http://www.pcquest.com/iot-shall-be-the-next-big-force-to-drive-mobility/.
- Nair, E. (2015). The challenge of change. Dataquest, 33(13), 82.Google Scholar
- NASSCOM. (2017). The IT-BPM Industry In India 2017: Strategic Review. Retrieved on June 7, 2018 from https://www.nasscom.in/knowledge-center/publications/it-bpm-industry-india-2017-strategic-review.
- NASSCOM. (2018–19). CEO Survey: 2019–20 Industry Performance: 2018–19 and what lies ahead. https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf.
- Productivity Commission. (2016). Digital disruption: What do governments need to do? Commission Research Paper, Canberra, June. Retrieved on June 7, 2018 from https://www.pc.gov.au/research/completed/digital-disruption/digital-disruption-research-paper.pdf.
- Sadagopan, S. (2012, September 13–16). IT in India. Yojana, 56.Google Scholar
- Sen, A. (2015). Marrying IoT with big data: Not possible without a cloud home. Dataquest, 33(13), 78–79.Google Scholar
- Shrikanth, G. (2015). A utopia called secured cloud. Dataquest, 33(13), 28–31.Google Scholar
- Srikanth, R. P. (2015, September 15). Smart cities: An opportunity to transform India. Dataquest, 33(17), 8.Google Scholar
- Standard Business Graduate School. (2016). Technological disruption and innovation in last-mile delivery. Stanford Value Chain Innovation Initiative in Collaboration with United States Postal Service Office of Inspector General GSB.Stanford.Edu/R/Vcii, White Paper, June.Google Scholar
- The Times of India. (2016a, March 3). Andhra cabinet okays internet of things (IoT) policy. Retrieved on June 10, 2016 from http://timesofindia.indiatimes.com/good-governance/andhra-pradesh/Andhra-cabinet-okays-Internet-of-Things-IoT-olicy/articleshow/51237426.cms?.
- The Times of India. (2016b, November 2). Amid IT layoffs, this could be a reason to cheer. Retrieved on November 2, 2017 from https://timesofindia.indiatimes.com/business/india-business/amid-it-layoffs-this-could-be-a-reason-to-cheer/articleshow/61459252.cms.
- World Bank Group. (2015). The effects of technology on employment and implications for public employment services. G20 Employment Working Group Meeting Report, Istanbul, Turkey, May 6–8. Retrieved on June 7, 2018 from http://g20.org.tr/wp-content/uploads/2015/11/The-Effects-of-Technology-on-Employment-and-Implications-for-Public-Employment-Services.pdf.
- World Economic Forum (WEF). (2018). The future of jobs: An insight report. Centre for New Economy and Society. http://www3.weforum.org/docs/WEF_Future_of_Jobs_2018.pdf.
- World Economic Forum (WEF). (2016). The future of jobs employment: Skills and workforce strategy for the fourth industrial revolution. Global challenge insight report, Executive Summary, January. http://www3.weforum.org/docs/WEF_FOJ_Executive_Summary_Jobs.pdf.