India Insight: Silicon Valley Style Recipes for Success
BENGALURU (Reuters Breakingviews) – There has never been a better time to be a tech freak in India. New recruits from a Delhi-based financial technology startup were promised free BMW motorcycles and a trip to Dubai to see India at the T20 Cricket World Cup, which kicks off in the Gulf emirate on Sunday. These are very tempting perks in a country where foreign brands are ambitious and the sport is similar to religion.
The incentives will also become necessary as the demand for local talent explodes as India has its tech coming-of-age moment. Silicon Valley experienced something similar over 20 years ago, while China has seen it in the last ten years. There is an acute shortage of people with the right education and experience across the ecosystem, and particularly the middle-to-high-level staff needed to oversee teams that are growing rapidly.
One reason for the bottleneck is that India is producing unicorns – startups valued at $ 1 billion or more – at a dizzying pace as foreign capital rushes in. This is due to an amazing speed of digital adoption: India has 550 million smartphone users compared to 250 million at the end of 2015, according to Counterpoint Research.
A Credit Suisse note in March counted 100 unicorns worth a total of 240 billion US dollars. Three were minted last week, including Licious, a fresh meat and seafood delivery service, and CoinSwitch Kuber, a cryptocurrency trading platform created by Andreessen Horowitz, a California-based company founded and named after the two, an initial investment in India won by -Engel-Investors. Rebel Foods also joined the club.
Existing unicorns are also getting bigger quickly. Ola Electric, the two-wheeler manufacturer backed by SoftBank, nearly doubled its valuation to $ 5.2 billion in just under three months, according to one familiar with the situation. It did so after booking more than 100,000 orders for its smooth debut scooter in just 24 hours in July.
This is the fuel to put more bums on the seats on Ola’s new campus in Bengaluru, where it designs cars, tests scooters and stirs biryanis from its experimental kitchen. The company is getting into the food delivery business through its neighboring ride-hailing app, which competes with Uber. The group’s busy eight-story workplace employs 4,000 people.
The competition for IT engineering talent is so great that the company’s co-founder Bhavish Aggarwal jokingly considered sending some work to “a lower-cost” center in San Francisco, where a decade-long tech boom is becoming some of the highest Houses has led to prices in the US.
In addition to the thriving startup scene, India’s original tech legends who benefited from outsourcing by Western companies are also in great demand after the pandemic spurred more online businesses. US $ 195 billion worth of Tata Consultancy Services, employing more than half a million people, is hiring on campus at what is known as unprecedented levels and battling a steep rise in employee turnover, a problem that is common across the industry reflects.
Tata Consultancy’s revenue rose a robust 16% in the three months ended September, the company reported on Friday. Chief Rajesh Gopinathan is confident that customer demand will remain strong as banks and corporations step up outsourcing and rush to build capacity to assess climate risks and more. But rising wages threaten the industry’s closely monitored operating margins. Similarly, Infosys has grown and increased salaries the fastest in a decade.
At the moment the couple is in poor health. Infosys has outperformed itself since the outbreak of the pandemic, outperforming the $ 230 billion Reliance Industries, despite the fact that the Mukesh Ambani conglomerate has proven to be a magnet for foreign capital from Facebook to Alphabet’s Google. Its share price rise has also beaten the broader benchmark Nifty 50 index.
The hiring pressure is heightened by large incumbent Indian companies rushing to digitize their consumer-facing businesses. Ambani is bringing its brick and mortar retail stores online and the conglomerate owner of Tata is testing its points-based super app so shoppers can browse everything from cars to hotels to jewelry in a single online window. Banks are rushing to increase their game as the government supports a new digital infrastructure that will reshape the credit market for small and medium-sized businesses.
Other Indian founders see a near future where companies in the world’s outsourcing hub may soon have to outsource themselves. The fact that their tech people have experience managing large-scale projects makes their people deployable abroad. That creates additional headaches for those who are already competing for talent with a wide and growing number of multinationals from many industries such as Amazon, Microsoft, Volkswagen, and large global banks such as JPMorgan. Finding ways to win the hiring war, however, is at least a luxury problem for a pandemic-ravaged economy.
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(Adaptation by Antony Currie and Katrina Hamlin)
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.