“US tech industry is advocating for HIB Visa flexibility”

Partha Iyengar, VP, Gartner Fellow & Country Manager Research (India), Gartner, tells TPCI that with interest in STEM discipline drying up in overseas students, India will remain a preferred choice for international IT industry to source their needs of skilled labour.

TPCI: According to a recent estimate by NASSCOM, Indian IT sector exports are expected to grow 7.7% in FY20. What is your take on this? What are the factors responsible for this optimistic outlook?

Mr. Partha Iyengar (PI): The demand side of the equation continues to be healthy. A fair amount of the increasing demand continues to be around digital business. Many developed countries have not produced enough talent in newer areas (including Analytics, AI/ML, Blockchain etc) due to a long-term erosion in interest in the STEM discipline amongst students.

The perception (and to a large extent, reality) is that India continues to produce these skills in large numbers and hence there is a resurgence of interest in sourcing from India. In addition to the traditional IT service provider exports, one segment that is also growing rapidly in India is the GIC (Global Insourced Center) phenomenon, with large global organizations either growing existing centers or establishing new ones in India to address the emerging business demand.

TPCI: How has the H1B visa put pressure on both Indian and US tech companies, and how do you see it getting resolved?

PI: This issue has created some short-term headwinds for the US technology industry – they have in fact been amongst the biggest lobbying forces to loosen up H1B visa regulations, since they directly face the brunt of overseas talent drying up. However, for the largest tech giants that already have a strong presence in India, some of this short-fall may in fact be addressed by recruiting more in India, something that has been going on for some time now amongst most of the large global technology companies and service providers. This would be good news for IT employment in India in the medium term.

TPCI: What implication has the global economic slowdown had on Indian IT sector, particularly with the COVID-19 outbreak?

PI: I think it is too soon to tell in terms of what the long-term impact of the slowdown will be. Added to that are the COVID-19 related challenges that are emerging now. The immediate impact is likely to be deferred projects resulting in lengthening sales cycles. There are no broad indications of major cancellations of projects yet, so the situation might turn around if economic conditions improve. The wild card now though is how long the COVID-19 crisis plays out, which not only affects sentiment, but also, from a practical perspective, creates significant barriers to business with the inability to travel to many (and possibly an increasing number) locations around the world.

TPCI: How have new digital technologies like social media, mobility, analytics, and cloud computing (SMAC) changed the competitive landscape for Indian IT firms? Where do Indian players lack?

PI: From a pure technology perspective, it has probably improved the competitive landscape for the Indian providers, since it plays to their strengths of being technology centric, and having a market where skills are available. The fact that in the Indian market, they are still at the peak of the ‘food chain of employment’ means that they still get their pick of the best talent in the country. Where the Indian providers are at a disadvantage is the ability to connect their technology capability to the desired business outcomes for their clients. This weakness often starts at the sales level, with the majority of Indian sales team being more tech-centric and still not as capable in selling on business outcomes and to business (non-IT) buying centers. This is the biggest challenge for Indian providers to overcome.

TPCI: How is the Indian IT segment tackling the challenge of new data protection & privacy rules enforced by other countries (eg: General Data Protection Regulation in EU)? Are there any suggestions for the Indian government to resolve such transnational issues?

PI: This does create a challenging environment in terms of the ability to allow access to data from any location. However, this is going to be increasingly a part of business reality in more and more jurisdictions, and the providers will have to evolve new approaches and business processes to address these challenges. I do not see the Indian government having much of a role to play in these privacy related issues – governments can’t really intervene in the case of the regulations of a certain country or jurisdiction. In fact, India’s own emerging privacy regulations have many similarities with GDPR.

TPCI: What are the operational obstacles (eg talent acquisition & obsoletion of skills due to automation) to the growth of the IT industry in India?

PI: The biggest challenge for the country as a whole is to address the increasing gulf in ‘soft skills’ capabilities – communication, executive presence, comfort levels in dealing with ambiguity, being able to challenge authority figures when required, to name a few. Our education system still (though the situation is definitely improving) does not produce enough of these skills. Going forward, these skills will be the need of the hour both to support domestic demand as well as global requirements from an export perspective.

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Partha Iyengar is VP and Gartner Fellow in Gartner’s CEO Research team. He is also the Country Leader – Research, India. His research interests cover areas of strategic interest to CEOs and their direct reports, including digital business, customer experience, expectations of the CIO and IT organization, and globalization issues. He is extensively quoted in the local, national and international press; was interviewed on the U.S. CBS News show “60 Minutes”; was a panelist on a CNN International panel discussion on the future of IT; and also participated in the BBC panel discussion on IT in emerging markets. He is the co-author of a book published by Harvard Business School Press on India and China strategies, titled “IT and the East: How China and India Are Altering the Future of Technology and Innovation.”