India added more than 1,600 tech startups in 2020, making it the third largest tech startup hub in the world, said the industry association Nasscom in its Strategic Review 2021 entitled “New World: The Future is Virtual”.
This is the highest increase in three years, bringing the total number of tech startups to 12,500, including 12 new unicorns.
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The entire Indian tech sector grew 2.3% year-over-year due to the rapid acceleration of digital transformation and the adoption of technologies. However, global production has shrunk by 3.2% due to the effects of Covid. 19 pandemic.
Despite headwinds, Indian technology contributed a relative share of 8% to the national gross domestic product (GDP) in 2020, with a relative share of 52% in service exports and a share of 50% in total foreign direct investment (FDI) on the inflows from April to September 2020 was based.
Despite the downturn, the Indian tech industry remains a net tenant with an emphasis on digital education, Nasscom said. The industry is expected to make more than 138,000 net new hires in fiscal 2020/21 for a total of 4.47 million employees in the fiscal year. The digital talent pool is expected to exceed 1.17 million and grow 32% over the past year.
According to a Nasscom CEO survey, 95% of Chief Executive Officers (CEOs) expect more hires in 2021 than in 2020. Additionally, 67% of CEOs believe India’s tech industry will grow significantly faster than 2020.
Investing in digital media is becoming increasingly important for the industry. Companies develop their skills and align business models with digital practices. Digital contributed 28-30% of total industry revenue.
Domestic digital adoption increased in 2020, in synch with the government’s push for Atmanirbhar Bharat or independent India. The Indian domestic market, driven by demand for hardware, continued to show resilience and grew 3.4% over the year. With an increased focus on innovation, more than 115,000 technology patents have been filed by companies in India in the past 5 years.
“The digital transformation is a top priority for global companies. In a highly connected world that remains largely contactless for a long period of time, there are changes in business models, customer experience, operations and employee experience,” said UB Pravin Rao, Chairman. Nasscom.
Companies are rebalancing their technology spending to prioritize digitization. Overall, the industry saw a 10% shift in results-based pricing. Offshore saw a shift of more than 4% in 2020 and the wear and tear rate decreased 50% in the second half of 2020 compared to the first half of 2020. The industry saw 146 mergers and acquisitions (M&A) in 2020, 90% of which were digital.
Enterprise cloud adoption increased 80% in the first half of fiscal year 211 compared to the second half of fiscal year 2020. In addition, continental Europe and the Asia-Pacific region developed into one of the fastest growing regions in FY2021. Banks, financial services and insurance (BFSI) as well as healthcare were important growth sectors in the year under review.
“Looking ahead to 2021, India’s technology industry is well positioned to build on these trends and continue its transformation journey in this redefined technology,” said Debjani Ghosh, President, Nasscom.
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