India’s digital economy to be $1 trillion, start-ups, SMEs set to be biggest IT sector growth drivers

Published: November 7, 2017 4:38:02 AM

The MD and CEO of Dev Information Technology Ltd, who is also the chairman, Domestic Council, NASSCOM, shares with Jyotsna Bhatnagar that, in the next five to seven years, India’s digital economy will be of an estimated $1 trillion in value, or almost Rs 600 lakh crore

digital india, digital india impact on it sector, digital india impact on economy, digital india impact on companiesJaimin Shah. (Shyam)

By- Jaimin Shah

The grim prognosis for India’s information technology sector may have dampened the spirits of faint-hearted techies, but Jaimin Shah, recently appointed chairman of the Domestic Council of NASSCOM, the apex body for the country’s IT BPM industry, is a die-hard optimist. Sprightly and energetic, the 45-year-old MD and CEO of fast-growing Ahmedabad-based Dev Information Technology Ltd, or Dev IT, is a man on a mission—to resuscitate the gasping IT sector, once a major employment generator for the country. Belying NASSCOM’s projection of a 200,000 net increase in employment across the sector in 2016, a significantly lower 170,000 jobs were generated. To make matters worse, lakhs of IT sector employees are facing the spectre of becoming irrelevant in the age of galloping automation. A recent study by management consultancy McKinsey has portend that about 600,000 of the industry’s 3.9 million workers will be laid off by 2020, and another one-third of the workforce needs to be reskilled to hold on to their jobs, as Indian IT has failed to catch up with new technologies like artificial intelligence and digital- and cloud-based services. It’s not the best of times to meet a senior office bearer of NASSCOM, but Jaimin Shah graciously agrees to meet me over lunch at Café Mocha, a happening eatery in the heart of town. He’s clearly unfazed by the cacophony created by the prophets of doom predicting an imminent demise of the industry. “I don’t believe the current situation is bleak,” he says, once the maître d has seated us in a quiet corner of the bustling restaurant. “On the contrary, I feel the changing dynamics of the industry will actually create more employment and we will emerge as a net recruiter,” he asserts.

As co-founder of one of Ahmedabad’s fast growing software maintenance company, Shah has successfully negotiated rough patches during his career. From a failed foray in the construction business after a BE in Computer Engineering to setting up a little gem, Dev IT, in 1997—which recently made a splash on the NSE Emerge platform with a dream debut—the first-generation entrepreneur has a voracious risk appetite. An astute Gujarati with the ability to sniff out good business opportunities, Shah focused on government contracts and SMEs from the get-go. “In the early days of our existence, we became Microsoft’s India partner for government business, and in 2004, we had applied for the government performance rating scheme for SMEs,” he reminisces.

By this time we have been served our choice of appetizers—the mouth-wateringly delicious honey chilly lotus stems with fries live up to the hype they have been generating in the city. Between mouthfuls, the Dev IT CEO reveals that the prime focus of his company is to provide tightly integrated end-to-end IT services to clients. “Our aim is to increase client relevance and evolve the company’s business model to become a next-generation global IT consulting and end-to-end IT services company.”

That, in its 30 years of existence, Dev IT has been able to make a mark for itself is evident from the fact that it not only became the first-ever Gujarat-based IT company to be listed on the NSE Emerge platform, but its IPO went on to be oversubscribed a whopping 74 times, attracting record bids worth Rs 463.5 crore. One reason it has managed to achieve an impressive 20% CAGR over the past few years is that it has smartly reduced its initial over-dependence on government business. This is evident from its inroads into the private sector as well as international collaborations and acquisitions. “We have constantly innovated in keeping with the ground realities of the market, and that has helped us stay ahead,” Shah ruminates. Today, Dev IT is a significant player in North America, Guyana and Canada, as well as Africa, with over 260 clients. Ask him his success mantra and pat comes the reply: “Collaboration and teamwork are the key to our success. I also follow the maxim that people come first—business automatically follows.”

Our main course has arrived. I have opted for Tex Mex Chicken—a succulent grilled chicken breast and sausages served with Porcini mushroom sauce—while my vegetarian host has chosen the Oriental vegetarian sizzler.

It’s pretty much the same template which he proposes to follow while dealing with the IT sector as a whole as chairman of NASSCOM’s domestic council. “NASSCOM has confirmed that the industry continues to be a net hirer, and as per our latest reports 2.5 million to 3 million new jobs will be created by 2025,” he gushes enthusiastically, going on to add that in the next five to seven years, India’s digital economy will be of an estimated $1 trillion in value, which is almost Rs 600 lakh crore.

Observes Shah, “Why we are going through an uncertain time currently is because growth in digital technologies like cloud-based services is happening at a much faster pace, forcing companies to combine learning of new technologies and reskilling. The bigger challenge ahead will be to retrain 50-60% of the workforce as there will be a significant shift in technologies.”

What’s his prescribed panacea for the ills plaguing the once robust sector? First and foremost, Shah prescribes a “collaborative environment between the government and the industry.” “We are in a transformation mode where people want IT companies to redefine their traditional roles and become partners in growth. Take the case of Andhra Pradesh, where chief minister N Chandrababu Naidu has announced his desire to implement blockchain technology in government departments,” he says.

More importantly, as the owner of an SME himself, Shah is of the firm opinion that the start-up and SME community ecosystem will be the future growth driver and employment generator of the IT sector, rather than big system integrators. “Already, the bigger players are focusing on the start-up ecosystem for delivery of client needs. By 2020, start-ups alone would throw up 80,000 to 100,000 jobs in the IT space,” he predicts.

Our meal over, we indulge our taste buds some more by bingeing on superb brownies with ice cream. What role does NASSCOM propose to play to galvanise growth? “We are planning several proactive steps including identification of new territories and geographies for growth and expansion. We are, for instance, looking at the Nordic countries as an option to post-Brexit protectionist Europe, as also Japan and even China. To facilitate reskilling, we are tying up with universities to provide training to lecturers. We have also recently launched a NASSCOM leadership academy jointly with IIM Bangalore to groom leadership for this sector, as there’s a vast difference between leadership and entrepreneurship,” he signs off with a flourish.

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