Technology Trends in India's Industries for 2023

Table of contents

• Introduction 

• Emerging Technology Trends in India 

• Growth of Indian Technology Industry in FY2023E 

• India's Unique Value Proposition 

• Annual Outlook for CY2023 

• Key Takeaways for Thriving in a 'No Normal' Future 

• Conclusion

Introduction

2023 has been the year of continued revenue growth for India's technology industry. With the global economic scenario being volatile and recession looming, technology has become a strategic imperative in the journey towards building purpose-driven businesses and improving operational and cost efficiencies. India's technology industry revenue is estimated to cross $245 Bn in FY2023 with significant growth in exports and domestic tech sector. The industry continues to strengthen its position as the 'Digital Talent Nation' for the world with the addition of nearly 3 lakh employees. However, there are various factors impacting technology industry growth such as geopolitical dynamics and tech regulations, resulting in delayed decision-making by enterprises. Hence, the need for enterprises to quick and constantly adapt to thrive in a ‘No Normal’ future.

Emerging Technology Trends in India

Technology is the way forward for businesses, and in India, it's no different. With the looming recession and the ongoing concerns about the global economy, technology has proven to be critical and shows no signs of slowing down in the coming years. Automation is becoming increasingly important, as enterprises have reshaped and accelerated their digital transformation agenda, focusing on scaling automation while humanising user experience. Supply chains are undergoing significant changes with the use of technology, and businesses are streamlining operations and enhancing their cyber resilience. Sustainability goals are also being met through technology, paving the way for purpose-driven businesses. All of these advancements have led to a focus on improving the efficiency and effectiveness of businesses. The global technology spend dipped slightly, but the Indian technology industry is on the rise with estimated revenue growth of 8.4%, an addition of $19 Bn over last year. Exports are also expected to see a growth of 9.4% in reported currency terms and 11.4% in constant currency terms. The domestic tech sector is also expected to see growth of around 4.9% y-o-y. India's value proposition has always been its strong and diverse tech ecosystem, and as the fastest growing economy, it's paving the way for further growth. The country's people-first innovation, responsible and ethical tech, and governance built on trust have made it a hotspot for entrepreneurs, while also offering cost competitiveness and efficiency. As we move towards a 'No Normal' future, the technology industry is looking towards key themes such as demand shifts, geopolitical dynamics, tech regulation, and digital mastery and innovation to help thrive under uncertainty. Enterprises that adapt quickly and constantly will be the ones that lead in this future.

Growth of Indian Technology Industry in FY2023E

Growth of Indian Technology Industry in FY2023E India's technology industry is estimated to witness a significant growth rate of 8.4% YoY, with the industry's overall revenues, including hardware, expected to cross $245 Bn in FY2023. The country's exports, including technology, are also expected to grow at a rate of 9.4% in reported currency terms and 11.4% in constant currency terms, reaching an estimated $194 Bn. In addition, the domestic tech sector is also expected to grow by 4.9% YoY, reaching $51 Bn. The tech industry continues to be a major employer, adding nearly 3 lakh employees to take its total employee base to ~5.4 Mn, growing at 5.7% YoY, strengthening India's reputation as the 'Digital Talent Nation' for the world. With the continued investments by private enterprises and the government, the domestic tech industry is also expecting a 13% YoY growth in rupee terms. Overall, India's technology industry is poised for continued growth in FY2023, with strengthening industry fundamentals, continued revenue growth, and building trust and competencies. This is significant, considering the ongoing global economic scenario and the looming recession that is set to support technology adoption and digital acceleration. With India's inherent leadership skills, diverse tech ecosystem, strong entrepreneurial mindset and inclusive talent pool, the country is well-positioned to lead in a rapidly changing world that has no ‘normal.'

India's Unique Value Proposition

India, currently the fifth largest economy globally, has a diverse and robust technology ecosystem. The country's strength lies in its inclusive talent pool that has a strong entrepreneurial mindset, and a thriving culture of people-first innovation with a focus on responsible and ethical tech and governance built on trust. Cost competitiveness and efficiencies, along with stable and trusted government policies, provide a conducive business environment for the largest and youngest working population and consumer market. India's unique value proposition as a technology hub is further strengthened by its commitment to Environmental, Social & Governance (ESG) goals and Corporate Social Responsibility (CSR). The industry's foundation is even stronger as Indian origin leaders occupy a seat at the table in global organizations, fronting global charters across various verticals. All of these factors contribute to India's reputation as a net hirer and the 'Digital Talent Nation' for the world, reinforcing India's position as a global leader in the technology industry. Overall, India's value proposition for the technology industry is strong and diverse in a 'No Normal' future, where enterprises that adapt quickly and constantly are the ones that will lead. The industry's focus should be on key differentiators such as trust, resilience, inclusive talent, and sustainability. With continued investment in niche and pure tech areas, India's technology industry will continue to grow and thrive.

Annual Outlook for CY2023

Annual Outlook for CY2023: Embracing the 'No Normal' Future The year 2023 has begun with a dose of moderation, with a worldwide growth expectation of approximately 2.9%. Nevertheless, global enterprises should brace themselves for a world of ambiguity and volatility, where demand contraction in some markets is likely, causing delays in decision-making and affecting business resilience. According to Nasscom's Annual CXO Outlook Survey of 2023, despite digital transformation being a central strategic priority, there is a demand for cost takeout and optimization requirements. Cybersecurity, cloud, AI, and analytics continue to be the main focus, but with more integrated use cases and higher value realization. Hyper-automation and virtual experiences are new themes, driving optimization and new business growth, thus reshaping the current trends. End-user enterprises are demanding a more significant domain specialization and purpose-driven partnerships from their technology providers. During CY2023, rationalization is expected to prevail, as technology providers consolidate and strengthen their expertise while implementing early moves into new business opportunities. The growth areas of technology segments will continue to be focused on digital CX, digitization, cloudification, building SaaS-enabled products, cybersecurity, and platformization. These digital components are being integrated into all deals, partnerships and M&As. In summary, the playbook to thrive in a 'No Normal' future would converge around four key themes: constant change in demand shifts, geopolitical dynamics, and tech regulations. Enterprises must transition from being service providers in digital transformation to become digital transformation partners. This shift involves a focus on trust, resilience, inclusive talent, and sustainability, driving digital mastery and innovation, as well as strengthening the capabilities in niche and pure tech areas like Cloud, AI, ML, and NLP, improving and increasing the thrust on employee engagement, culture, health and wellness. Finally, the dogmatic approach of 'one-size-fits-all' does not apply anymore, and businesses that adapt quickly and constantly in today's dynamic world will lead in a 'No Normal Future.'

Key Takeaways for Thriving in a 'No Normal' Future

Key Takeaways for Thriving in a 'No Normal' Future: 2023 is a year of uncertainty. Enterprises are facing significant headwinds, including demand contraction, geopolitical change, and regulatory barriers. If the current scenario has taught us anything, it's that change is the only constant. To stay ahead in such times, businesses must be adaptable and flexible. To thrive in a "No Normal" future, enterprises must transition from being service providers to digital transformation partners. They must focus on trust, resilience, inclusive talent, and sustainability. The new technology trends of hyper-automation and virtual experiences provide a window for new business growth. To drive digital mastery and innovation, businesses must strengthen their capability in niche and pure tech areas like cloud, AI/ML/NLP through reskilling and upskilling. The Indian technology industry's continued efforts in building a skilled talent pool with a strong entrepreneurial mindset will ensure that it remains a go-to destination for global tech companies. So, to sum it up, enterprises that embrace change, focus on innovation, and strengthen their digital capabilities are the ones that will lead in a 'No Normal' future.

Conclusion

Conclusion: As we move towards the 'No Normal' future, it is imperative for businesses to adapt and keep up with the constantly changing technological landscape. In India, the technology industry has shown steady growth in FY2023E with a focus on building trust, competencies, and resilience. Increased adoption of automation, humanisation of UX, streamlining supply chain, improving cyber resilience and delivering sustainability goals are some of the emerging technology trends. The country's diverse tech ecosystem and inclusive talent pool with a strong entrepreneurial mindset, along with a stable and trusted government, make India an attractive location for tech companies. It's all about being agile and focusing on digital mastery and innovation to thrive in a 'No Normal' world.