The latest NASSCOM strategic review report for FY 2022 revealed that it was a milestone year for India. The country's technology industry clocked in a record 16% growth to reach USD 227 Bn in revenue. It was a year where digital & innovation went deep; against the backdrop of the over 25,000 tech start-ups in the country, 138,000 tech patents were filed (2015-2021) and the accelerated digital capability building that provided as an impetus to the growing IT industry.

These encouraging figures are a testimony to the IT strides the country has achieved over the years and continues to do so. Tech experts have slated that over the next few years, India's dream of becoming a USD 1 Tn digital economy will become a reality without a doubt. Some of the growth areas include: Infrastructure and managed services, data management, RPA, AI, and Cloud based services, among other avenues.

With the buzzword in the industry being digital transformation & customer experience, the country has a long way to go to be future ready now.

ET this month looks at 'India as an IT Mega Force: Are we there yet?'.

On the Podium, Harish Mehta Founder & Executive Chairperson - Onward Technologies, eloquently explains the transformative stints and the impact that NASSCOM has bought about in the Indian tech sector.

In Figures of Speech, may Vikram's 'geek' be with us all!

Please also Click Here to check out our Special issue of ET, which is a collation of selected themes that were featured over the years highlighting the changing landscape of the business world. This special edition has been well received and can be Downloaded Here for easy reading and is a collector's item.

As always, we value your opinion, so do let us know how you liked this issue. To read our previous issues, do visit the Resources section on the website or simply Click Here. You can also follow us on Facebook, Twitter & LinkedIn - where you can join our community to continue the dialogue with us!

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Succeeding in Business: Nurturing Value in Family Business

What makes some family businesses grow from strength to strength? How do you ensure that value is created and not destroyed when a business passes hands from one generation to the next in the Indian context? How can old families incorporate new ideas to revitalize themselves? Is there a role for professional management in Indian family business?

This book offers answers to the vexatious issues that families face in their growth journey. The pointers provided can be used as a guide for nurturing the business and to leverage the traditional strengths that family businesses possess. As a counsellor and trusted advisor, the author, K. Jayshankar (Jay), has had a ring-side view of how family businesses have functioned. The practical insights drawn from his experience of four decades has been combined with conceptual elements to become a valuable primer for a family that wishes to succeed in the competitive marketplace that is India.

The quarterly reports from IT majors are one of the most awaited results at the Bombay Stock exchange. Good results cheer sentiments and sends the Sensex zooming and conversely, poor results become a dampener, at least for a short while. Case in point: see the scare on the market when the fourth quarter results from Infosys and TCS were declared in mid-April 2022. The results sent the BSE IT Index reeling downwards by 5.2% with Infosys shares losing over 8% along with almost all the other major scrips.

All this at a time when Infosys's results were extremely good with the firm displaying its highest annual growth in a decade. So too was the case with TCS as it declared that it had achieved the highest ever incremental revenue in a year of over USD 3.5 billion and an annual revenue in fiscal 2022 being over USD 25 billion, with a net margin of 20%.

So, what explains the fluctuation in the markets? The answer is fairly simple to the experts on the stock exchange. After all, the game is one of expectations. The results did not meet the expectation of the analysts who tend to write off companies at a moment's instance. But, to me the results speak volumes of the manner in which the Indian economy has transformed. As Harish Mehta so eloquently observed in his book, The Maverick Effect, 'This is the story of changing India's reputation as a land of snake charmers and one with a bullock cart economy to a country that the entire world trusts as their technology partner and enabler.' So, if the IT sector catches a cold, the analysts know that it portends trouble to the economy in multiple ways.

However, thankfully, the story is not as scary as the market tends to believe. There is a lot of positive tailwind for India's IT sector. Consider some additional data: India's IT sector in 1990 was about USD 100 million. But see how things have dramatically changed. NASSCOM estimates that in March 2022 the industry crossed USD 200 billion, with USD 30 billion in incremental revenue, reflecting a growth rate of 15.5%. Significantly, all sub-sectors of the industry (viz., IT services, Engineering R&D, Business Process Management, Hardware, Software products and eCommerce) grew in double digits. This was fuelled by the vast talent pool of over 5 million workforce in the technology space, with TCS alone hiring over 100,000 into its ranks last year. The pace will continue to be scorching as the industry is eyeing a target of USD 350 billion by fiscal 2026.

What is attracting greater attention is that India's domestic IT spending is poised to be over USD 110 billion according to a recent Gartner report. With the worldwide investment in IT touted to be about USD 1.4 trillion, this marks enormous opportunity for India's talented firms. Consequently, growth is forecasted in all sub-domains as the pace of digital transformation has increased in government, private sector, academia, military and services.

While the pandemic period has been a blessing for growth it has also created a new challenge. The increased demand for talent in Artificial intelligence, Machine learning, Cybersecurity, Cloud and Data services, etc., has meant that there is a scramble amongst employers, desperate not just to attract but also to retain talent. With wage bills rising, there is déjà vu for veterans who saw the early dotcom era. But this bubble is transitory, in the opinion of the market leader, Rajesh Gopinath, CEO of TCS, and the question of right talent for the right job can be addressed. And, with upskilled employees for a machine first delivery model, TCS alone is targeting revenue of USD 50 billion by 2030.

While Indian IT sector has created a vast new middle class that has played a major part in propelling national development and raising standards of living, the industry is still weighed down on many matters. A thriving digital ecosystem has to be more than just about services. While no one grudges the good work accomplished by Indian software professionals, Industry leaders have yet to win mind space in major aspects including being seen as innovators and developers of products. The recent push for local chip development goes beyond meeting strategic national interests. Perhaps, it could herald a new thrust for design and hardware development too. That chapter is waiting to unfold still, and the verdict is pending.

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ET:  Despite emerging competition, India is still the go-to destination for IT. What are some of the factors that have helped India sustain itself as an IT hub on the international level?

HM:  A recent research report reveals that since 2016, Bengaluru has emerged as the world's fastest growing tech ecosystem in the world. India thrives on entrepreneurship and innovation and with a vast skilled pool of resources, there is hardly any dearth of motivation. The pandemic brought out a resilient face of India, where sunrise sectors such as EdTech, FinTech etc. have seen some game changing technologies. Bengaluru has also featured as the world's tech venture capitalist investment list. All of this shows excitement about doing business with India, a requirement and appreciation for Indian tech talent and the absorption of technology in India is what draws the world towards us.

ET:  What has been the impact of Covid-19 on the Indian tech industry? What are your views on turning the challenges into opportunities?

HM:  The pandemic tested the human spirit like no other. But the world surged ahead. Digitisation before the pandemic was a concept that was slowly creeping in on us, but Covid-19 saw it getting all too normalised. The ubiquitous blanket of digitisation and connectivity added more start-ups than ever before. With over 340 million people hooked to their screens, India is just behind China as far as connectivity is concerned. Everything essential came together to boost the Indian tech space. Low-cost mobiles and data prices, rising consumer expenditure and adoption of technology by people in rural and urban areas have created the perfect ecosystem for churning out start-ups in the tech space. Entrepreneurs, investors and mentors are all looking to create the most conducive environment to accelerate new business. India has one of the most positive environments for setting up and building businesses. India soars amidst the dreadful times to ride the wave of technology, growth and innovation. Analytics is taking on in a big way in the country. And it won't be long before IoT becomes a way of life here in India too. Tech hubs are now sprouting everywhere. With people having gone back to their native hometowns during the pandemic and with far reaching internet access and good infrastructure, tech ecosystems are now developing everywhere and that is what is spurring India ahead.

ET:  Amid the new normal, skilling requirements have also changed. What has changed and how does one upskill oneself to keep up with the changing pace?

HM:  Earlier hiring talent using referrals was common. But now, post pandemic, using AI and data analytics to hire talent is the trend. This is happening across sectors and industries. The dependency on technology has increased, which is churning out unknown sources of talent. While India ranks eighth in the world in terms of the number of students graduating in engineering and science, but there is still a plausible gap in the skill set and efficiency and new age skills such as AI, Machine Learning, Mobile Development and Data Sciences. To keep up with the hi-tech brand name of India, the country needs to focus on upskilling and reskilling of its vast, talented human resources. Tech-ready is the need of the hour and the gap needs to be narrowed to absorb the best of talent across board. India is an attractive talent pool and all it needs is to keep up with the pace. The logistics and infrastructure have improved all over the land. Geographically, our talent today is not just limited to big cities. Neither are the industries limited to few odd towns. The IT ecosystem is spreading across multitudes of cities. The talent needs to stay updated.

ET:  NASSCOM's initiatives and impact on India's IT industry are invaluable, as you have outlined in your book on the creation of this unique body. Please tell us more your book called, 'The Maverick Effect'.

HM:  The Maverick Effect is the astonishing story of dreamers who joined hands to transform a nation & change the way India was perceived all over the world. The book encapsulates not just the story of a few individuals but also of the nation that slowly took on the mantle of a global tech hotspot and an industry that today stands at a staggering USD 200 billion today. When people dream, the nation grows. And my book is just the story about how we all grew together to chart some historical milestones.

ET:  Many years ago, you announced to the world that India's software exports can rival the forex earnings of the Diamond industry – and no one believed you. How do you read the future of India's IT sector now? Would you like to offer us some new predictions in this fast-changing landscape?

HM:  The government has been taking some beneficial decisions regarding the sector. Today there are no more pockets of development. The country is growing and has developed vastly, even in small towns and cities. The pandemic and the exodus of people from cities to small towns and villages, remote working demands and high-speed digitisation has surged the country from just being a resilient nation to a country to watch out for in the next decade. Augmented reality, AI, machine learning and analytics have all taken up in a big way in the country and how we live our lives from our fingertips and 6" of screen is proof enough of how drastically we are advancing and all for the better. We are the digital hub of the world and this buoyancy in business and tech knowledge is causing ripples all over the world, attracting more investments and businesses into the country.

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It was the turn of the new century and I was attending a global conference in the United States. As is common at such settings, everyone is pleasant with each other and small talk is a good way of getting started. Walking into the large room, I was next to this well-dressed gent and we exchanged greetings and pleasantries, and he said he was from Chile. The ice broken, the next question stunned me: 'You are from India. Tell me how are you guys so good at IT?'. Well, that was my cue to launch into how we are all taught mathematics from early school and how our early foundations are powerful, etc.

Truth be told, this was a wonderful question as in earlier decades the queries that I had been posed by some western acquaintances included rubbish like, "India … do you have cars?' The western world had been fed on a television diet of starving Indians, exotic animals and spiritual Indian gurus but things changed post the Y2K event in 2000. Suddenly, the question had changed to how Indians were good at IT!

Harish Mehta's work, 'The Maverick Effect' is a book that was waiting to be written. The transformative journey of the Indian Information Technology industry (and in particular the business of software services) is laid out in great detail in the book – and you discover that if the image of India changed across the globe, it was no accident, but the result of well-crafted effort by a dedicated collective of individuals from industry, academia and of course far-sighted bureaucrats, with some ministerial support. Under the umbrella brand of NASSCOM, this collective of intrepid warriors have played a stellar role in making a growth industry which has not just created the most export-oriented industry for India but has metamorphosed lives through high quality employment generation across the country.

India has always had many trade bodies – some over a century old - but what made the National Association of Software and Service Companies (NASSCOM) different from the rest was the pioneering nature of its advocacy, from virtually teaching the government about the power of Indian software firms to convincing them about the need for anti-piracy measures (at a time when government offices functioned with pirated software!) and much more. The book recounts the innumerable challenges that NASSCOM overcame without ever giving up on its vision of establishing the Indian brand firmly on the global map. The transformative power of technology is today accepted as a universal truth – but it wasn't so when the journey began as Harish testifies in his recounting.

Harish Mehta is widely considered the 'Father of NASSCOM' as he was the primary driver behind the force that the institution became. While the book is a tale of the organization's creation and growth, the sub-layer is the private journey of Harish, both of his triumphs and the depths of despair that he has seen in his personal life. His beginnings are typical of a brilliant engineering mind – good student at the College of Engineering, Pune, followed by a Masters from the United States, followed by a steady job in the United States. Life was going well until it struck him that he was under-selling his talents as just another Indian immigrant in a milieu that was short-changing him. What followed was not just the return of the native but also a dramatic declaration to his family – when he symbolically tore up his green card – that he was home for good. Soon the economic realities on the domestic front hit him hard but Harishbhai is clearly made differently. After a few experimental ventures, he became partner at Hinditron and also an evangeliser for Indian IT. The rest is history – never mind that he suffered body blows on the business front and at home. It is said that the mettle of man is best tested under adversities. If this is so, the stoic resolve that Harishbhai showed in the face of personal tragedies is proof enough that the challenges of creating an institution like NASSCOM were never going to deter him.

The book is also a testament to the visionary role that many of the founding fathers of India's IT industry have played, from the venerable F C Kohli (TCS) to Infosys' Narayan Murthy, to Ramani (Future Software), to Ashank Desai (Mastek) and to a host of others. Incredibly this veritable assembly of rational dreamers and thinkers were ready to put aside their personal and enterprise agenda for the sake of growing the pie of the industry. While they continued to compete at the firm level, they collaborated at the macro level to create the power-house that Indian IT industry is now. The respect that Harish has received from his colleagues in industry is a reflection that they all recognise that he has been a key sutradhar or facilitator not just by investing personal time and resources but also through other means: enunciating principles, ensuring enforcement of regulations, listening with understanding to the needs and concerns of multiple stakeholders and I guess his indefatigable energy and optimism to reconcile differences between various parties, both global and local. The book reminds us that the nascent body was almost still-born because of the strong opposition of established firms and strong competing institutions like Manufacturers' Association of Information Technology (MAIT) and the Confederation of Indian Industry (CII), at times.

Harish also pays tribute to the earliest and perhaps the most well-known face of NASSCOM, Dewang Mehta. A true blue maverick of the industry, Dewang was Harish's find who created a larger-than-life role for himself through dramatic steps (much to the annoyance of some), and thereby made NASSCOM a name to reckon with globally. Dewang was a candle that burnt at both ends, notes Harish, while crediting him with major and vital contributions at a time when the fledgling body had yet to become stable.

A key feature of the book is the generous praise and compliments that Harish showers on his industry colleagues, even at times underplaying his contribution. But the wide acclaim that the book has received – and well-deserved too – is a public acknowledgement and testimony that Harish was central to the creation of NASSCOM and has nurtured its growth to make it a model for other industry institutions to follow.

What makes Harishbhai special? Is it his core beliefs rooted in Jain philosophy embedded by his mother in his childhood, or the early questions that his father exposed him to from Jiddu Krishnamurti? Or, is it his ability to amalgamate the best of theoretical knowledge with the real-world pathshala that India is? I guess the answer is all the above, for inside Harish burns a strong patriotic fervour that wants to create a modern India that can provide higher standard of living for its teeming population, and which recognises that science and technology is the sole and quickest route to this destination.

For all those who share Harish's dream – and even if one despairs at the torturous path to finding institutional answers – I would commend this book as a motley bunch of mavericks have shown that India can deliver for the world!

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