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An unparalleled impact on Indian economy in the last ten years Significant returns to all stakeholders A large unfinished agenda remains
Global economic crisis will have a far-reaching and as yet uncertain impact
THE TECHNOLOGY AND BUSINESS SERVICES INDUSTRY HAS HAD AN UNPARALLELED IMPACT ON THE INDIAN ECONOMY
Growth of Indian technology and business services exports US$ billion 47
Actual
Aspiration
50
<1 4
Total export revenues as a percentage of nominal GDP Based on FY08 performance Technology and business service exports as a percentage of total exports (merchandise exports and service exports) RBI Annual reports 1998 to 2008; WMM (Global Insight)
Contribution to education:
6-7x fold increase in tertiary education capacity in states that account for 90% of exports
8.7
45%
33% 12%
proportion of women in the workforce estimated to be 30% in 2008 and increasing; around 30% of delivery outside India
* Total urban jobs in FY 1994 amounted to 81.8 million and 90.5 million in FY 2005 ** High multiplier effect; for every direct job created 2.6 additional jobs created in indirect employment Source: Institute of Applied Manpower Research; The Rising Tide Employment and Output Linkages of IT-ITES; February 2007; Indian IT/ITES Industry: Impacting Economy and Society 2007-08
THE GLOBAL ECONOMIC CRISIS WILL HAVE A FAR-REACHING AND AS YET UNCERTAIN IMPACT ON THE INDUSTRY
Historic data indicates a moderate impact IT spend as per cent of GDP 4.2 3.6 3.0 2.4 IT intensity peaked in 2000 But
US EXAMPLE
Customer
feedback is polarised
Severity of
the downturn is far greater
1.8
1.2 0.6 0 1970 1980 Trend at 2.9% YoY increase in IT intensity 1990
Political and
regulatory pressures are escalating
ASIA (INCLUDING JAPAN) WILL BYPASS EUROPE IN THE GLOBAL ECONOMY BY 2020
Regional share of global GDP Per cent
Share of global GDP* 1990 100 Middle East & Africa Latin America 80 5% 5% 8% 18% 31% 2020 7% 5% 20% 10% 25%
60
40
20 0 1990 95
North America
33%
33%
00
05
10
15
20 2025
7
* Estimates ** Brazil, Russia, India, China Source: McKinsey Global Forces research
WORK FORCES WILL DECLINE AND AGEING POPULATIONS INCREASE IN SELECT DEVELOPED COUNTRIES
Increase in retiree (60+ years) population: United States Decrease in working age (15-60 years) population: Japan
Millions of people
Millions of people
83
54
75
38
16
2008
2020
2008
2020
Automation of
4
1 1 23 basic services (e.g., testing, level 1 AM)
3
5
Interactive voice
recognition techniques 2
1 11
New technologies
such as optical character reading to automate data entry
THE INDUSTRY CAN TRANSFORM INDIA BY HARNESSING TECHNOLOGY TO ENABLE INCLUSIVE GROWTH
Areas Potential of ICT solutions 50% of Indians do not have access to primary healthcare technology can provide it at half the cost 80% of Indian households are unbanked technology can enable access for 200 million families India faces a 3-fold shortage in teachers technology can address this through remote solutions
Healthcare
Financial services
Education
Public services
India suffers from a leakage of 40-50% in public food distribution - technology can ensure transparency
10
11
Demand
Concentrated footprint
1 Market 75% with Fortune 500 80% from US/UK 75% from BFSI, Telco, Manufacturing 60% from IT services
Predominantly private
sector
Innovation, end-to-end
transformation, risk & compliance
Labour arbitrage
dominant value driver
Onshore/offshore mindset
Supply
13
Players today
Customer intimacy
Delivery excellence
BRIC specialist
15
Deepen end to end capabilities in select areas Target recession resilient sectors (Healthcare, BRIC, climate change)
16
Primary and tertiary education quality and scale up Curriculum and faculty development
3
Harnessing ICT for inclusive growth
Improved infrastructure (e.g., satellite townships) Corporate governance National security Robust domestic demand Global branding
ICT solutions for healthcare, education, financial services, public services Connectivity and access (e.g., broadband rollout) Soft infrastructure (e.g., IT literacy)
17
What will be the altered landscape of 2020, including growth engines and industry revenue potential? How can the Indian industry lead the way in innovation-led transformation of global business and technology-led inclusive growth of the nation? What are internal and external threats to Indias leadership and how can it sustain and improve its competitiveness in 2020? What is the industry vision for 2020, and resulting imperatives and actions for industry stakeholders (companies, NASSCOM, the government)?
BACKUPS
19
THERE IS AN INCREASING NEED TO ADDRESS CLIMATE CHANGE AND ICT IS EMERGING AS A KEY ENABLER
ICT can play a role in abatement of a potentially dramatic rise in global greenhouse emissions by 2020 Greenhouse gas emissions GtCO2e ICT enables at least 35% of global abatement potential
BACKUP ESTIMATES
Select ICTenabled abatements
52 12 40
30
22
22
Emissions in 2002
Potential abatement
OPPORTUNITIES EXIST ACROSS A BROAD SET OF APPLICATIONS AND ARE NOT LIMITED TO THOSE TRADITIONALLY ASSIGNED TO ICT
Abatement potential, GtCO2e
Industrial motor optimisation Industrial process automation
0.68 0.29 Industrial processes efficiency 1.52 0.50
0.25 Dematerialization* 0.16 Efficient vehicles 0.10 Traffic flow monitoring, planning simulation
Efficient buildings
ICT efficiency
Efficient transport
2.03 0.40
21