japan rising: indian tech talent can fuel japanese innovation
TRANSCRIPT
30th April 2015
Indian tech talent can fuel Japanese
innovation
Gagan Sabharwal
Director
NASSCOM
Policy Advocacy
政策提言
Industry Development
産業の発展
Enabling Environment
環境整備
Global Trade Development
世界的な貿易の発展
E-Governance
e-ガバナンス
Emerging Companies
新興企業
Security
セキュリティ
• Premier trade body and chamber of commerce of the IT-BPM companies in India インドの、IT-BPM（IT ビジネス・プロセス・マネージメント）カンパニーを代表する業界団体であり、商工会議所
• Over 1600 members – includes Indian Companies, MNCs and Global In-house centers1600社を超える会員数を有し、そこにはインドの企業、多国籍企業、そして世界的な社内センターが含まれている
Education & Skill
Development教育およびスキル開発
Social Development社会の 発展
2
3Source: ICRIER report
• India leap-frogged from being agriculture economy to services driven economy
• Underlying educated talented middle-class made this possible
• IT evolution has put India on world map and has had huge multiplier effect
• GOI favourable policy environment helped tech sector grow
• Over depending population (700mn+) on Agriculture sector is cause of concern
Availability of talent and IT revolution helped
India drive up services sector contribution
1990-20001980-1990
2000-2010
Share in
services exports
2010 onwards
Value addition
Revenue1
(USD billion)
Employees1
(million)
No. of firms1
GDP share1
Low-end support
& development
T&M pricing
Standardisation,
productivity improvement
Non-critical functions
Project-based
Fixed cost, T&M
End-to-end services
Strategic partner; non-linear
growth
Pay-as-you-use
Higher End Services
Digital transformation
Domain specific services
SMAC, innovation
Outcome based
1 >8 ~78 ~146
0.06 0.34 2.3 3.5
~1% 1.8% 6.1% 9.5%
<5% 10.5% 26% >38%
<1,000 ~2,000 10,000-12,000 >16,000
Share in global
sourcing1 - - 47% 55%
Cost arbitrage Collaboration Value additionBusiness
outcomes
Tipping pointY2K
Global delivery
modelSMAC
Source: NASSCOM1 Data given for FY1991, FY2000, FY2010, FY2015
Indian IT-BPM industry evolution
~ USD 150 billion IT-BPM Industry
7788
98
32
31.6
34
FY2013 FY2014 FY2015E
Domestic Exports
146
118130
eCommerce
Source: NASSCOM
IT-BPM revenue break-up1
5
USD billion
9
10.5
14
E: Estimate, includes hardware
132
119109
• Japan constitutes less then 2% of industry
revenues
62%17%
11%
8%
2%
USA UK Continental Europe APAC RoW
FY2015E per cent share of
exports by regions
インドの労働力は教育も能力も程度が高い
• 技術系/非技術系卒業生が多数
• 英語を使える技術者数は中国、フィリピン、インドネシア、ベトナムの総数より多い
芸術系35%
技術系16%
商業系,
14%
科学系14%
経営系3%
大学院1%
Other Graduates
, 17%
学歴FY2014
出典: McKinsey, NASSCOM
社内教育/資格認定
職業訓練
大学教育
技術力開発
6
550万人
Indian workforce is getting better educated &
skilled
• Large number of technical (STEM) / non-technical graduates
• Large number of educated English speaking technical professionals more than China,
Philippines, Indonesia and Vietnam combined together
Arts, 35%
Technical 16%
Commerce , 14%
Science14%
Management3%
Post-Graduates
1%
Other Graduates
, 17%
Talent Output
FY2014
Source: McKinsey, NASSCOM ; STEM: Science, Technology, Eng, Mathematics
In-company training/certifications
Professional Training
College/University education
Robust skill building
7
5.5 million
Operating costs – India continues to lead competitive index
運営コスト – インドは競争力が高い
出典: NASSCOM –Tholons Services outsourcing Atlas,
運営コストのみ;マージン/手数料、集中間接費、初期投資額、旅費を含まず。財務上のインセンティブを含まず。
9
Source: NASSCOM ; GIC – Global-in house Centre's
80%
20%
Fortune 500 companies using India
Using India as source location
Not using India
• Part of Global Target Operating Platform
• Deeply integrated with the Enterprise
• Centers provide sustainable competitive advantage to the Enterprise
• One Global enterprise - Eg Ford, Target, Goldman Sachs, Fidelity
• Driven by Digital talent & Innovation Eco system availability besides arbitrage
GIC Centre's increasing globally
• Contributing $19bn in revenues; employing 700,000 workforce
• 145 of Fortune 500 present in India; 67% origin in US
• NASSCOM facilitating strong community /connect amongst GICs ; SIGs for Japan, Germany
• BFSI- Technology , Operations, AML, Analytics
• Technology, Product Engineering, Embedded Systems
Number of GIC’s in India: 1000 +
Global companies are setting up Indian centres to
leverage Indian talent
Internet of
Things
Big Data &
Analytics
Augmented
Reality
Cloud
Computing
Hardware
Wearable Tech, Home
Automation and Fleet
Management
3D Printing, Payment
Solutions and Automation
Big Data and Social
Media Analytics
BD&A, ERM, Comm./
Collaboration and
Productivity Solutions
Marketing & Advertising,
Healthcare and
Visualization Solutions
30+
30+350+35+ 800+
EduTech
Technology Platform,
Educational Content, Skills
Development and
190+
AdTech
Mobile Advertising,
Marketing Analytics and Ad
Campaign Management
100+
HealthTech
30+
Search, ERM, Records
Management
Start-ups created every year> 800
Funding since 2010$2.3+ Bn
Active VCs/PEs in 201470+
Incubators/ Accelerators80+
Start-ups in India> 3,100
Source: Zinnov, NASSCOM
NASSCOM 10,000 Start-ups enabling and catalysing ecosystem
62+ Active Angels in 2014550+
Indian talent taking up entrepreneurship driving
innovation
Perception Vs Reality
11Source: US non-farm payroll
5.2 5.24.1 3.6 3.6
9.3 9.68.9
8.17.4
2009 2010 2011 2012 2013
U.S. Tech Sector U.S. Overall
Outsourcing of IT leads to job losses in host
country
Employed for Life culture (in
Japan)
Unemployment Rates in the U.S. (%)
Reality- Indian tech sector compliments US workforce by alleviating skills shortages
CASE EXAMPLE: ANALYSING US EXPRIENCE
Contribution of the Indian IT industry in the US
12
280,000
Total Jobs Supported in the US
(2012)
$15 Billion
Total contribution by way of Taxes
(in 5 years – 2012)
$50bn+
Net savings to the US economy by outsourcing *
(2012)
$5 Billion
Investments made in the US
(in 5 years – 2012)
Source: NASSCOM US Contribution Review, 2012 ; * NASSCOM & Zinnov Analysis
Other contributions such as fuelling innovation, building efficiencies,
reducing time to market and helping gain market share are difficult to
quantify
CASE EXAMPLE: ANALYSING US EXPRIENCE
NASSCOM will work with both networks in Japan &
India to strengthen cooperation in tech
13
Japan SIG Council
Push for ironing out issues for GIC’s
Increase investments / partnerships
Encourage parent companies to leverage in Indian IT more
Japan Chapter
Will push for more exports
Reach out to Large service providers to outsource more
Create more partnerships and champions on ground
In India In Japan
Email: [email protected]
Members: > 31
Email: [email protected]
Members: > 42
How Japan benefits by leveraging Indian talent?
• Makes Japan a relevant player in Services not just manufacturing
• Enhances cost competiveness of Japanese corporations and helps
regain market share
• Provides necessary fuel for keeping innovation torch burning
• Can be reliable partner to China + 1 strategy
• Provides huge market for Japanese products and solutions
• Can serve as play ground to launch new offerings in Global markets
14
IT outsourcing
(ITO)
Engineering & R&D (ER&D)
BPM/ Analytics
Internet of things (IOT)
Low hanging fruits
Count on our help at every step
• Automobile Industry
• Embedded Code Analyser for detecting crashes, freezes and erratic behaviour,
• 3D modelling, Design Automation, work on heat exchange systems, HVAC, CPM, Exhaust and Compressor systems, Thermal Analysis, Transient Shock & Wind load Analysis
• Communications Industry
• System Engineering, Design, Validation, Firmware development, Testing & debugging, Lab Setup and Maintenance for Bluetooth enabled printing for 3 G/4 G products, Mobile backhaul solution portfolio
• Testing and validation of Network equipment based on Openstack, Cloud Foundry, Hybrid SDN ,New Network Architecture based on SDN / NFV and Security architecture design
• Semiconductor Industry
• Chip design and verification and Mobile middleware and application development
India supporting Japanese Corporations in
Engineering R&D
• Retail Industry
• Building Analytics insights around Customer loyalty , Artificial Intelligence and Machine
Learning, Integrated Marketing Effectiveness
• Pharmaceutical and Insurance
• Customer Analytics and Decision making process platform for Cross-Sell solution using cross
channels and reduction in customer attrition using predictive models
• Beverage Industry
• Data acquisition & aggregation, data cleansing, advanced data analytics, report design & generation, insights generation
• Transportation Industry
• Fare Filling, Import documentation, tariff update, export documentation, terminal operations, booking, contract & pricing
• Electronics, media and entertainment Industry
• Language decoupling to optimize costs, Standardized invoice and reconciliation templates, Technology Enablement, Reporting & Governance Structure
• Music Industry• 25 language support across 40 client locations in 5 countries
India supporting Japanese Corporations in BPO,
Analytics
India Japan - Joint initiatives
• Work together on creating Global Standards e.g. IOT, Analytics, 5G, etc.
• Identify 3 large projects as pilot that can showcase cooperation in IT
• Skilled Workers Mobility Agreement - given that Japan has shortages and
India surplus
• Make India as the starting point for Japanese corporations wanting to go
Global
• Work together in education space launching Joint Universities in Japan and
India
• Make Japan as preferred country partner for local initiatives viz. Make in India,
Smart cities cooperation, Digital India, etc.
• Ease / speed of material movement and shipment between Japan and India
• Setup dedicated Japanese IT parks in India with incentives
• Promote / encourage people-to-people contact on both sides
17
19
In-house / In-land sourcing,
92%
Offshoring 8%, $10bn
$5
$1
$1
$1
$2
Country-wise share of offshoring
in USD Bn
China India USA Phillipines Others
Japan - IT market landscape
Source: NASSCOM PwC report
• Over reliance of doing work in-house inhibits
growth of IT services
• Lower IT spends (1-2%) compared to 4% in the
US also impedes growth
Japan IT services market
landscape (Size: USD 125bn)
Keiretsu, 65%
Others, 35%
Keiretsu’s :
• NTT Data, Hitachi, NEC, Fujitsu, IBM, Mitsubishi,
HP, Unisys account for about 65% market-share
• All these companies account for 5-9% share each
Who serves the market(Size: USD 125bn)
Challenges that inhibit growth for trade in IT
20
• If we don’t speak same language than how can we do business?
• 700 Indians take JLPT Vs 300K Chinese
• Tax regime in India, translations costs
• Lack of Totalisation, WHT (10%)
• Visa issues on both sides
• Indian IT takes away jobs compared with ‘employed for life’ concept in Japan
• Job-shop image
• Push-back from mid-level managers
• India’s image quite hazy
• Perceived as back-office of the world
• Cultural differences are huge
Image Perception
Language Inhibits
End-to-End Product Development for customers
Testing
Prototyping Compliance
Outsourced Manufacturing
Hardware & Enclosure
Software Development
Product Support
Product Strategy
•Elevator Controls
•Surveillance System DVR
•Servers
•Blood Pressure Monitoring
•Water treatment Controller
• Industrial Microscopes
•Many Designs prototyped
•Base Stations
•Servers
Rural ATM Infusion Pump LTE Base Station
High Performance Blade Server
WorkforceManagement Terminal