Indian tech companies contributes over $198 billion to US economy

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According to a recent study by the IT industry association Nasscom and IHS Markit, Indian tech companies and their clients generated a total of $396 billion in US sales (output), supported 1.6 million jobs overall, and contributed more than $198 billion to the US economy in 2021—an amount greater than the combined economies of 20 US states.

The president of Nasscom Debjani Ghosh said, “the Indian technology industry makes critical contributions to the US economy through local investments, fostering innovation and the labour force, and facilitating skill development for the local workforce.”

The study revealed that the Indian information technology industry directly injected $103 billion in revenue into the US economy last year and generated employment for 207,000 people.

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The operations and investment spending channels increased their GDP contribution to $80 billion in 2021, up 40 percent from 2017. In addition, the Indian IT sector contributes $216 billion through the sales it facilitates for US clients.

The two reports commissioned by IHS Markit, “Impact of Indian Technology companies on the US Economy” and “Building the current and future US workforce: role of the Indian technology industry in the US,” illustrate how businesses are addressing the demand for qualified tech talent in the nation as well as the contribution of Indian technology companies to the US economy.

In comparison to other geographical areas, Debjani Ghosh said, the US now has one of the widest demand-supply gaps. The Indian IT industry has relationships with more than 75 percent of Fortune 500 corporations, the majority of which are based in the US, and is thus ideally positioned to recognize and address the crucial talent needs of the digital era.

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The US’s Indian technology sector is in a good position to address the skills gap. According to the research, they have made major investments in growth-oriented strategies to skill, upskill, and reskill both their employees and individuals at all educational levels.

In an effort to localise their recruiting process and lessen their reliance on work visas, Indian businesses have contributed over $1.1 billion to bolstering the STEM talent pool in the US.

The report predicts that over the next ten years, demand for STEM jobs will increase 1.5 times faster than that of non-STEM occupations. A large portion of this growth (70 percent) is being driven by IT occupations, which will make up 51 percent of STEM employment by 2030.

For every computer and math professional who was available in the US in 2021, there were roughly six job advertisements. In 2022, that ratio increased to 11 vacant positions for every available IT worker.

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Ghosh further stated that in order to close this supply-demand gap and develop growth-oriented solutions that put a priority on developing human capital to further increase the US economy’s competitiveness abroad, strategic partnerships between the two nations, industrial partners, and academics will be essential.

The report found that non-specialised visa workers “also form part of the STEM talent gap solution” because they are “helping to meet the increased demand for these skills in the US economy.” In the first half of FY2022, 76 percent of certified applications for new H1-B employment were for IT occupations.

The third-highest percentage of H-1B applications came from the retail industry, which has made significant investments in e-commerce and artificial intelligence (AI) technologies. (CNBCTV18)