By Debjani Ghosh
This past year we watched every organisational process and system come into question, as digital transformation became a critical strategic priority for India’s enterprises. In fact, Gartner finds that ICT spending in India is forecast to total $101.8 billion in 2022, an increase of 7% from 2021. As I look back at 2021, almost every sector of India’s digital economy witnessed a multifold growth during the year.
The startup and product sector in 2021 attracted $36 billion in funding, with almost 40-plus unicorns added. The tech services industry is expected to clock double-digit growth, but more importantly, the pivot on customer centricity, domain, and innovation is reshaping legacy services. The ER&D sector witnessed a greater focus on product innovation and increased R&D spend with software-defined products. The SME sector, despite the lockdown, was able to build deeper customer connects and expand their offerings. What was also exciting during the year was the rise of India’s public digital platforms and the scale that they were able to garner – UPI clocking $1 billion transactions in a month, CoWin seamlessly managing the 140 crore registrations, etc.
Moreover, the shift towards digital transformation for enterprises and governments is only going to accelerate. NASSCOM research with McKinsey estimates enterprise tech spending will be at 5% of revenues by 2025—a 2% growth from 2020. This is why it is no stretch to say that India’s tech and digital sector can reach the goal of a trillion-dollar digital economy in the next five years.
How will the sector move towards this goal in 2022? There are some trends we need to sharpen in 2022 and some we need to prioritise and evolve. These include a single minded focus on talent, perfecting the hybrid work model, investment in DeepTech products and solutions, building human centricity with tech and lastly, revisiting security with a ‘zero-trust’ lens.
Talent will remain the most essential resource for every organisation in 2022, underscoring the growth of the entire industry. Currently, the demand for digital skills in India is eight times what is available and will rise 20 times by 2024. However, this talent augmentation requires a combined effort from businesses, technology enablers, solutions providers, and the government, to incorporate fundamental shifts in talent strategies. If 2021 was the year of the great resignations, then 2022 should be the year for massive upskilling.
This focus on talent will also drive the industry to perfect the hybrid work model. In fact, perfecting this model will in itself be a sort of reinvention for the industry, since leaders across every function will need to re-look at their ways of working and incorporate technology to enhance what their distributed teams can achieve. Ultimately, to drive greater customer-centricity and value for their business, organisations will continue to shape policies centred around employee centricity. This can drive growth of the industry in smaller cities and towns in the country and enable the industry to tap into untapped talent pools.
Social commerce, SaaS, crypto technologies were amongst the growth segments for startups in 2021 and will continue to grow as India’s digital adoption accelerates. However, 2022 is also likely to see acceleration in India’s deeptech start-ups—as more startups mature with advanced tech solutions and solve deep issues for the country and global enterprises. With the National Digital Health Mission taking shape, India’s deeptech startups can build healthtech solutions that provide access in low resource settings and do that at scale.
Data, the essential common thread that runs through all technology, will continue to grow both in volume and value, and attract an increasing number of cyberattacks. Organisations will move towards a zero-trust, automated security strategy that assumes nothing and is always at the ready to protect against an attack. Lastly, the focus on sustainability will be key for the technology sector in 2022. Walking the talk on net-zero emissions or building technology solutions for sustainability will be key to building future-readiness.
Today’s era is marked by the rise of technology giants, tech startups, and enterprises that are becoming digital and innovative disruptors who are reimagining every aspect of collaboration, business, wellness, interactions, and consumption. While innovative application of technology is driving all these shifts, what I hope 2022 will bring is the importance of human centricity in each of these transformations. Technology innovation and inclusion must go hand-in-hand and must be built into the design principles of any digital economy roadmap.
As the new year dawns in the shadows of another Covid wave, while the new normal will continue to change and evolve, the importance of technology for sustainable impact is becoming more real and will continue to drive us forward.
The writer is president, NASSCOM. The article is co-authored by Sangeeta Gupta, SVP and chief strategy officer, NASSCOM