India’s information technology and business process management (IT-BPM) services industry has played a key role in the nation’s economic growth, and its continued vibrancy is pivotal to achieving the country’s digital economy aspirations for 2025.

The country has an abundance of talent that has helped it grow in the IT-BPM sector. Workers can be retrained and redeployed for data centres, and new employees trained in analytics and cloud computing can help data centres to flourish. Consequently, there is a shift in the IT-BPM industry paradigm, from being a purely cost-reducing lever to more of an exercise in protecting and increasing market share in the wake of the broader digitisation of businesses. India’s IT-BPM companies will need to reinvent themselves to stay competitive as clients reorient their spending to new technologies and demand greater agility and business orientation.

India’s IT-BPM industry currently generates almost $170 billion in revenue annually and employs approximately four million people. As global IT industry spending shifts toward new digital technologies and away from legacy systems, the industry has the potential to generate $285 billion to $350 billion in revenue in 2025.

A recent report on how India is embracing the digital medium by a global consulting firm observed that in the past few years, employment growth has represented about two-thirds of revenue growth, with productivity (as measured by revenue per worker) accounting for the rest. It also estimates that the IT-BPM industry could employ five million to six million people by 2025. This means that since most future revenue of about 40 per cent is likely to be from digital technologies, there will be strong potential and demand for a highly skilled and trained IT workforce in the domains of emerging technologies such as artificial intelligence, big data analytics, and blockchain.

The immense, untapped talent potential of the country is another factor that is expected to help India leapfrog other countries in tech domains in the next few decades. Talent in smaller cities in India, is waiting to be taken advantage of. We are creating new offices in these tier-2 and tier-3 locations, and telling people that they don’t need to leave their hometowns.

Emerging technologies and a skilled workforce are a heady combination that’s driving business growth in India. To emerge as an IT-BPM leader, India needs to prepare people to develop advanced capabilities in these technologies.