The year 2020 has likely been among the worst in the history of humankind. At the start of this year, no one expected us to devote the entire year fighting against a deadly virus with no escape path. Everything was unprecedented, whether it was nationwide lockdowns, restrictive travel, widely implemented social distancing measures, and mass working-from-home. In recent months, however, there have been some strong signals in the rebound in 2021. (See: Growth of Indian IT sector set for revival in 2021)
It was not as if things were going great from an Indian economic standpoint in the pre-Covid normal. However, sound fundamentals maintained macroeconomic stability before the pandemic.
The pandemic has been a blow for many companies, mainly brick and mortar businesses, who now face an existential threat. This grave situation also caused so many job losses, making a devastating impact on millions of people’s livelihoods.
Despite these setbacks from the COVID–19 meltdown, the pandemic also brought few silver linings, such as the increased adoption of digital technologies and robust business continuity planning. The pandemic has unleashed a new era of thought process and cast away everything for granted theory.
As we are embarking on 2021, here are some of the significant signs that indicate that the next year will the year of transformation and rebound!
Acceleration of digital transformation
Amidst adversities, technologies such as artificial intelligence (AI), machine learning models, cloud, and predictive analytics have helped the world move forward, harness human potential, and augment our capacity to partner virtually. This is one of the foremost factors that indicate 2021 as the rebound year.
Digital technologies emerged as a new force of change amidst the unstable equilibrium. For instance, telemedicine and online consulting have become more common; mobile payments and e-banking transactions have surpassed all previous record levels; e-learning has become widely accepted, and virtual recruitment is the new norm. (See: CIOs’ digital transformation focus accelerates recovery for IT firms)
Many skeptics who earlier questioned these technologies’ roles and called them a substitute for human potential have suddenly become the most prominent adopters. Not only these technologies helped maintain business continuity for enterprises, but they also facilitate COVID-19 preparedness and enable countries to contain the spread of the infection. (See: It’s time to invest in a Chief Transformation Officer!)
According to Fitch, a global rating agency, the Indian IT services sector is expected to resume high single-digit revenue growth in 2021-2022 due to a higher demand for digital transformation. The coronavirus pandemic’s impact is seen to be only moderate and short term, as customers focus on transforming their businesses digitally, moving services and work platforms online, and minimizing spending on legacy services.
In 2021, these technologies will further enable organizations to respond to challenges with agility and resilience. Over the next twelve months, new technology shifts are expected to fast-track the Indian e-commerce sector’s growth, remote education, and virtual healthcare support.
The continuous aggregation of data by enterprises and their meaningful interpretation will elucidate consumer behavior and influence business decisions. Contactless technologies will make the reopening of offices smooth and safe.
Improved investor sentiments
A critical positive that has emerged in the last three months is that foreign investors improved sentiments in the Indian market. Capital inflows to India’s Foreign direct investment (FDI) surpassed US$ 500 billion in September, restoring the country’s credentials as a key investment destination.
US technology firms such as Google, Facebook, and Amazon have all pledged large new India investments this year. Early rebound in investment activity indicates that country can accelerate its growth prospects in H2 2021. (See: Will FB–Jio deal create magic?)
There have also been several revisions by global rating firms such as S&P and Fitch in India’s growth projections for 2021. India’s road to recovery is faster than the previous estimations due to rising demand and declining COVID-19 rates.
Robust business continuity models
While the pandemic scars may take some time to heal, the disruption has sparked a global awareness around the importance of firm business continuity models.
Many of the insights gained from the pandemic have translated to create systematic business continuity plans, contactless behaviors, dynamic processes by organizations of all scales. As we advance, this will enable businesses to improve their ability to combat similar disruptions and rebound with more confidence and skills in H2 2021.
According to a report, COVID-19: Implications for business, by Mckinsey, there is now better awareness around risk preparedness and governance. Corporate decision-makers introspect which protections and technologies are worth the investment and can translate into long term solutions.
Many employers are rolling-back salary cuts and hiring freeze that they enforced in April this year after the pandemic due to increased uncertainty. Many of the IT companies have also announced salary hikes in response to growing optimism. (See: Salary hikes at IT firms on cards as COVID disruption eases)
According to LinkedIn statistics, hiring has improved by 30% in September. There has been a significant rebound in the sectors such as construction, services, logistics, and retail.
The remote workforce trends mean that many opportunities have lost geographical barriers, allowing people from different countries to compete for an opportunity.