The Opportunity While India struggles with a burgeoning population countries, faces a shortage of working-age people, caused largely lower birth rates and an ageing working population. While the requirement for skilled workers in these markets is increasing in, line with economic growth, the availability of skilled people simply isn't keeping pace. In professions like IT services, medicine, and to developed countries, even developing countries such as China and Russia will have a workforce shortage.
For the developed world, these shortages present a huge challenge, as they can slow down economic growth. And they can have other adverse effects. For instance, Demand-supply imbalances caused by workforce shortages will increase wage rates, reducing the competitiveness of these countries. Pressure on the existing social security and pension systems will increase as a significantly larger percentage of retired population has to be supported by a smaller percentage of working population Some countries already recognize the shortage of workers as a potential problem. Several of these governments have initiated measures to manage the crisis and minimise its impact. However, these measures will a only reduce workforce shortages, not eliminate them. Also, the outcome of several of these measures is still uncertain. Even after adjusting for government actions, it is estimated that the net workforce shortage in developed countries will range between 32 and 39 million by 2020. Amongst such nations, the U.5.,Japan, Spain, Canada, and the U.K. are expected to face the largest shortages.
The challenge faced by other nations presents an opportunity for India. Which its large population of educated youth, India can provide a host of services to such countries. These services fall into two broad categories : 1. Professional services to the world provided remotely from India - IT services, IT enabled services, telemedicine, e-learning, etc. 2. Customers serviced in India (import of customers) - special service tourism (health care, education services), leisure tourism, etc. The potential revenue from these two opportunities is huge. By 2020, India Inc. can hope Co generate $139-365 billion of additional revenue from these opportunities, pushing the GDP growth rate by an additional 0.6- 1.5% between 2002-20. The resultant employment generation (direct & indirect) can be in the range of 20-72 million by 2020. Remote services alone can contribute $133-315 billion in revenues to the Indian economy by 2020.The resultant employment creation (direct and indirect) will be in the range of 10-24 million jobs by 2020. Starting with simple services, such as call centers targeted at corporate clients, Indian providers can evolve to providing more complex services to corporations and also targeting individuals as potential customers. The second opportunity, importing customers into India, has the potential of generating $6-50 billion of revenues and creating between 10 and 48 million jobs (direct and indirect) by 2020. Purely from an economic perspective, the fundamentals for this business are strongly in India's favour.
The cost of medical treatment and educational services in India is a fraction of the cost in developed countries. Several Indian health care provide are already tapping into this opportunity by serving customers from the Middle East. Illustrates a list of medical services that can be offered to foreign customers. In the area of leisure tourism, India cui recently has an insignificant share of global tourist arrivals. Clearly, there is large, untapped potential in this area waiting to be harnessed by India Inc. The categories of services that can be provided by India Inc. by remote servicing and importing customers into India. India's potential strength of human capital can give it a competitive advantage in these service areas. Not only does India have the largest pool of manpower, it also has the highest quality of people according to international agencies. The Indian Media and Entertainment (M & E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues.
The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people. The Indian media & Entertainment sector is expected to reach US$ 100 billion by 2025, from its estimated size of US$ I7.85 billion in 2015 - leading to huge demand of human resource. The Indian Engineering sector has witnessed a remarkable growth over the last few years driven by increased investments in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors, is of strategic importance to India's economy. The capital goods & engineering turnover in India is expected to reach US$ 125.4 billion by FY 17. The engineering sector is a growing market. Spending on engineering services is projected to increase to US$ 1.1 trillion by 2020.With , development in associated sectors such as automotive industrial goods and infrastructure, coupled with a well-developed technical human resources pool, engineering exports are expected to touch US$ 120 billion by 2015.
India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 67 per cent of the US$ 124-130 billion marker. The industry employs about 10 million workforces. More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy. India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be the mainstay of its unique selling proposition (USP) in the global sourcing market. However India is also gaining prominence in terms of intellectual capital with several global IT firms setting up their innovation in India. The Indian Information Technology (IT) sector is expected to grow I per cent per annum and triple its current annual revenue to reach US$ 350 billion by FY 2025, as per National Association of Software and Services Companies (NASSCOM). India is the topmost off shoring destination for IT companies across the world. Having proven its capabilities in delivering both on- shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. Social, mobility, analytics and cloud (SMAC) are collectively expected to offer a US$ 1 trillion opportunity.
The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. The third-largest sub-segment of the services sector comprising trade, repair services, hotels and restaurants contributed nearly US$ 187.9 billion or 12.5 per cent to the Gross Domestic Product (GDP) in 2014 - 15, while growing the fastest at 11.7 per cent Compound Annual Growth Rate (CAGE) over the period 20l I - 12 to 2014- I 5.Tourism in India has significance potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange tor the country. The industry is expected to generate I3.45 million jobs across sub-segments such as Restaurants (I0.49 million jobs), Hotels (2.3 million jobs) and Travel Agents/Tour Operators (0.66 million).The Ministry of Tourism plans to help the industry meet the increasing demand of swilled and trained manpower by providing hospitality education to students as well as certifying and upgrading skills of existing service providers. India's travel and tourism industry has huge growth potential. The medical tourism market in India is projected to reach US$ 3.9 in size this year having grown at a CAGR of 27 per cent over the last three years, according to a joint report by FICCl and KPMG