IT Industry and the aftermath of COVID – Is this the great Recession era?
If recent news reports are to be believed, a significant threat is looming upon us – ‘Recession’. With the impact that COVID-19 has had across the world over people, over each industry type, with some industries like Service, travel, Retail, etc. being hit with a direct impact of this adversity with people losing jobs, opportunities, and whatnot amidst the great chaos that pandemic brought with itself. But is it true to say that after more than 3 years of sailing through these high tides, what we are heading to is a major decline in Economic growth and instability that is going to crush the Technology sector? Would it be an understatement to say that – the IT Industry is going to get hit by this COVID-imposed Recession drastically?
What’s really happening?
There has been a massive impact on the industries in the first world countries like the USA, and the UK and across continents like – Europe in terms of the decline in IT jobs not just due to the inflation-led wage hikes being demanded but also due to the massive operational costs, Infrastructure altogether surging too high costs being incurred at Organizational level.
Another important reason is that – With the increase in remote working not just during the pandemic but also as a consequential effect of it all, there is most definitely a rapid evaluation of the major Economic crisis in terms of Sustainability, progress, growth, quality of work, and trust. Are we saying things can never go back to how they were?
There are examples of multinational companies like – Cargill, TCS, HCL, etc. that boast of really high-level Infrastructure, and then there are costs of renting office spaces, equipment, etc with offices being closed for years now. Is all this a sustainable choice?
How has India as an Economy emerged out of this unparalleled, unaffected?
Several factors combined together have made the Indian Economy left literally untouched by this booming Recession tale, the IT Industry in particular, like-
1.) As the Indian IT market still caters to the bigger fishes like the US and the UK at really low operational costs with organizations being able to reap ample profits and churn big numbers still and come out profitable.
2.) The work culture that Indian IT practices are much different from what is experienced at the world level. It is known for a fact that Indians are a very hard-working breed and they are much more appreciative of opportunities for growth as a country we are very target and result oriented which leads to a sort of Domino Effect that helps bring in more and more clientele and go on to achieve bigger successes.
3.) The IT Industry closer home has also remained majorly un-impacted due to it being unparalleled to the travesties like the Russia-Ukraine war, an impact of which there has been a constant seeping in of refugees which has dug a deeper hole immediately after COVID-19 into the overseas economies especially the UK and Europe.
4.) With INR still being a smaller currency in comparison to GBP, US Dollar, etc., it still makes us a profitable economy even if there is some decrease in Contract Revenues that are being negotiated with the Western market for IT services.
5.) Smaller Indian IT Organizations have also come out of this phase beautifully by nurturing their talents, being strong and resilient, and coming out as success stories.
The IT Industry has emerged out of the pandemic not as deeply impacted or affected compared to sectors like Retail, Tourism, etc., and has continued its growth as is so far, but the trade pundits have predicted that the summer of 2023 is bringing along the wave of recession for the Technology sector. Well, whether it happens or not will be an interesting thing to see.