2017 was an interesting year for the Indian it industry. Demand for IT and IT enabled services continue to grow around 8 to 10% in constant currency terms. It is certainly a shade better than our original estimates earlier in the year. The customer requirements are going through dramatic changes. The customers are demanding digital, transformative, and innovative solutions with application of new technologies like artificial intelligence, machine learning, IoT, 3D Printing, Drones, AR/VR/MR etc. The adoption of new technologies is growing at a pace faster than what was anticipated by industry. On the supply side, there is a serious challenge in reskilling/upskilling our employee base in new technologies to meet new customer demands. Sizing up to new customer expectation in providing innovative solutions is yet another area of concern.
Job growth has slowed down because of Automation, AI, and Machine Learning. We see some signs of protectionism from countries around the world; however we also witnessed an upsurge in the domestic market opportunity for technology solutions. On the other hand, the Startup India program has caught pace, with more than 5900 start-ups already recognized by DIPP by end of 2017. Overall, I would rate 2017 as a year which was very satisfying.
IT industry Forecast for 2018
In 2018, we might see some more challenges for the IT industry. Again on the demand side you might not see any major challenges: 8 to 10% growth in spite of the industry base increasing to over $150 billion is still possible. However the new regulatory challenges coming from new visa regime with Trump administration and also changes to visa rules in countries like UK, Australia, Singapore etc. will bring down people mobility and as a result flexibility in scaling businesses. Skills required in 2018 will be different and advanced from the past. At NASSCOM, we have a major initiative called skills of the future and we believe that initiatives of this nature will help us bridge the gap between the skill demand and skills in existence.
Customers also demand more digital innovative solutions and companies which are geared to this new environment will find it easy for scaling businesses. As the Indian economy transitions to digital, one of the major concern and focus area for IT industry during 2018 will be Cyber Security and how to mitigate this risk. During 2018, we expect to see further strengthening of the Startups ecosystem with strong collaboration among startups, investors, government, industry, associations and academia.
Key developments augmenting the growth in 2017
We saw several reforms in Indian economy in 2017. We saw a perceptible change in ease of doing business bringing India's ranking to 100th from 130th last year. Introduction of GST, demonetisation, direct benefit scheme, etc could always create initial challenges but will show positive traction to businesses and industry in years to come. Also the recent upgrade of Moody's credit rating for India is an early sign of positive growth in economy in the coming quarters.
State government paving way for the growth
The Telangana government has done extremely well and continue to introduce progressive policies and improve the infrastructure for IT/ITES services and also hardware. Introduction of the new policies covering all new technologies and creating of infrastructure in terms of clusters has progressed extremely well. We have seen further momentum to growth. Improving ease of doing business and creating world class infrastructure should definitely help the state of Telangana accelerate growth and development. Also we look forward to the second facility of T-Hub which will span between 3,00,000 and 3,50,000 square feet. The facility could become the largest of its kind in the world when it becomes operational in mid-2018.
The writer is Founder Cyient & Former Chairman NASSCOM.