Digital technology investment to increase to 35% in 2020

Digital study by Nasscom
The share of digital technology investment in cumulative expenditures will rise from 10 percent in 2014 to 35 percent in 2020 and 60 percent in 2025, said a report by NASSCOM and McKinsey & Company.

About 80 percent of incremental expenditures will be driven by digital technologies such as platforms, cloud-based applications, big data analytics, mobile systems, social media, and cybersecurity, as well as services.

Half of this incremental investment will be funded by a projected 20 to 25 percent cut in legacy expenditures. These reductions will be largely in spends on infrastructure, traditional application development and packaged software.

The global addressable market for Business Process management (BPM) services will likely touch about $ 260 billion by 2025, for an annual average growth rate of 4 to 6 percent. Expansion will be driven by business process-as-a-service offerings and big data analytics.
Indian digital study by Nasscom

The global total addressable market for engineering services will reach up to $ 480 billion by 2025, a compound average growth rate of 8 percent. The share of embedded software will rise significantly and lines between investment in engineering services and information and communications technology will blur.

Technology and business services expenditures in India is projected to reach $120 billion to $130 billion by 2025, an average annual growth rate of 10 percent.

NASSCOM said the Indian technology and services industry is on track to reach its goal of $200 billion to $225 billion in revenues by 2020 and furthermore, to reach revenues of $350 billion by 2025.

WHAT INDIA NEEDS TO DO

Innovation clusters will fund research in key emerging technologies and linked to technology institutes.

India needs to design, develop and rollout a massive re-skilling program to train and re-skill 4-5 million people.

India needs to turbo-charge the startup economy and government’s ongoing Startup India program.

India needs to undertake a branding and public relations exercise, media campaign to reposition India as a global Digital Innovation Hub, moving ahead from its current pole position of low cost and efficiency leader.

To support the development of India as a centre for digital innovation, new regulations should help create a domestic market, protect intellectual property, strengthen cyber-security laws and ease the creation of public-private partnerships in education.

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