The Technology Industry and COVID-19

Information Technology or the IT sector is the sector which is growing speedily in India since last decade. The sector has increased India’s GDP from 1% to more than 7% in the last decade. In India, the IT industry is divided into two major components viz. IT services and business process outsourcing and all the IT companies work under these two components. Tata Consultancy Services, Wipro, Infosys, etc provide BPO services while Mindtree, Tech Mahindra, etc provide IT services.

2020, the year of COVID-19, and the crisis affected the Indian economy in large and the same happened with this sector.

Due to the pandemic, a lot of companies are forced to ask their employees to work from home, which led to a massive loss of opportunity for many companies that had international dealers. The spread of this deadly virus has caused a lot of tech conferences to get cancelled, which could have been a great partnership opportunity for many companies to expand their horizons worldwide and in India too. The teleconferences would not have the same reach as real-time conferences as there will be fewer networking opportunities. Beyond all this, the stagnancy in the world and declining economy had a huge impact as there was no business and hence very few new BPOs and IT services.

There was not a great decline in the sector, instead it was stagnant and a bit increasing in some cases. The main reason for an increase in the sector was increasing in demand for software and social media platforms such as Zoom Meetings, Google Hangouts, WhatsApp Video Call, Microsoft teams, etc. These tools are helping to have conference meetings and work at the same time. Plus, its also helping people to stay in touch with their family members who are away from them.

In the shutdown period, some countries have invested in smart city solutions such as the cops in China are using drones attached with thermal sensors to identify the symptoms for coronavirus and get immediate medical help. The Australian government has launched a chatbot to keep the citizens up to date with the situation. The local government of South Korea has launched a smartphone app that keeps the self-quarantined employees in touch with their co-workers to keep updated on the work process and to ask any questions. India is up with the Arogya Setu app which we all know, how it is helping us. Due to the pandemic, there was a growing need for the 5G technology. These all things helped sustain the IT Sector.

After the pandemic is over, what would happen to the IT sector? May exporters in this industry feel that it will not be able to stabilize after the downfall, unlike the 2008 global economic and financial meltdown. At that time Central Banks helped to bring stability, but talking about the current situation, even the Central Banks are helpless. So, the economy and the market boom will be a tough one after the second and more harmful wave of the virus in India.

Thank you.

Regards,
Nirmal Trivedi,
Kautilya,

IBS Mumbai. 

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