Key findings
- Global technology trends 2023 – Technology industry remained resilient in a year of macroeconomic uncertainties as enterprise software and IT services demand sustained large-scale cost optimization and automation deals. Global tech spending grew slower in CY2023, at 4.4% y-o-y, primarily due to degrowth in hardware and devices. Spending increase was primarily driven by enterprise software and IT services spend that grew nearly 1.1X of the total tech spending.
- Indian technology industry overview – FY2024E
Amid global geo-political tension leading to a more cautious approach for investments and delayed decision making, India’s technology industry revenue (including hardware) is estimated to reach $254 Bn (3.8% y-o-y growth) in FY2024, an addition of over $9 Bn over last year. Exports are poised to touch the $200 Bn mark growing at 3.3% y-o-y, and the Domestic technology sector is expected to cross $54 Bn, growing at 5.9% y-o-y.
Despite the tough market conditions, the industry continues to be a net hirer, adding 60K employees, taking the total employee base to 5.43 Mn (1.1% y-o-y growth). Europe, APAC, Manufacturing, Retail and Healthcare emerge as the key growth markets for the industry.
- Themes that defined FY2024
- Tech remains resilient in times of uncertainty.
- Technology-led transformation of traditional services.
- ER&D remains the poster child for tech services.
- The year AI became omnipresent.
- DeepTech beyond AI.
- India Tech start-ups – Strengthening business fundamentals.
- India continues to be the destination of choice for tech.
- Future of work – focus on ‘skills first’ approach.
- India domestic market growth – a promise of good times.
- Building future readiness through capability enhancements.
- CY2024 Technology Industry Outlook
Nasscom Annual Enterprise & Tech Services CXO Survey 2024 indicates stronger growth momentum for CY2024 with under-stressed sectors of BFSI, telecom, media and entertainment and hi-tech leading digital spending. Gen AI remains a key priority for over 95% of the organisations over the next 6-12 months.
For technology providers, FY2025 growth expectations look stronger as 79% of the providers expect higher growth compared to last yea. Hiring growth is expected to be positive with 80% of the providers planning higher level of hiring compared to FY2024.
- Imperatives to drive India’s tech-led development through 2047
With these changing market dynamics, and to drive India’s tech-led development through 2047, it is imperative for the industry to focus on the following:
1. Leading the Gen AI driven services transformation
2. Expanding into newer markets
3. Transitioning towards outcome-based Service Level Agreements (SLAs)
4. Integrating more deeply with academia for adaptive skilling
5. Driving the strategic enablement of India@100
