India’s IT companies are undergoing a significant shift as it decentralizes from the current seven major hubs to 26 cities nationwide. This change will help firms fill GCC workforce gaps and manage cost arbitrage in changing scenarios. By tapping into these cities, businesses can gain access to a large talent pool and build enterprise capabilities. The report suggests that by 2030, the overall number of new GCC establishments each year could reach 115 from the current 70. Continue reading to know more about the topic.
Where Are The IT Companies Moving?
The majority of the 5.4 million people employed in the IT industry in India have clustered around these seven major cities: Bengaluru, Hyderabad, Chennai, Mumbai, Pune, Delhi-NCR, and Kolkata.
However, IT companies are now moving to tier-2 and tier-3 cities like Chandigarh, Nagpur, Ahmedabad, Kanpur, and Thiruvananthapuram, among others. These cities offer companies access to fresh, skilled talent, cost-effective operations, and robust infrastructure.
One of the primary reasons for this shift is the rising cost of operations in the major cities. The cost of living in these cities has increased significantly, making it challenging for companies to attract and retain talent. Additionally, the cost of real estate and office space has also risen. Making it difficult for companies to expand their operations. By moving to smaller cities, companies can reduce their operational costs significantly.
Deloitte India Partner Sumeet Salwan said, “While big cities were the focus in the past, the post-pandemic era witnessed a remarkable decentralization of work across the nation.”
Another reason for this shift is the need to tap into new talent. The major cities have become saturated with talent, making it difficult for companies to find the right people for their operations. By moving to smaller cities, companies can tap into a new talent pool that is eager to work in the technology industry. This talent pool is also more cost-effective, making it easier for companies to manage their costs.
Why Are The Industries Moving?
“India is expected to have a skilled talent surplus by 2030. These hubs offer companies a compelling blend of advantages: access to a fresh, skilled talent pool, cost-effective operations, and robust infrastructure,” Roy said.
The decentralization of the IT industry is also expected to have a positive impact on the economy. The move is expected to create new jobs in these smaller cities, which will help boost the local economy. Additionally, the move is expected to help bridge the urban-rural divide by creating new opportunities for people in smaller cities.
The shift to smaller cities is not without its challenges. One of the primary challenges is the lack of infrastructure in these cities. While some cities like Ahmedabad and Chandigarh have robust infrastructure. Others like Kanpur and Thiruvananthapuram need significant investment in infrastructure. Companies will need to work with local governments to ensure that the necessary infrastructure is in place to support their operations.
Smaller Cities To Have A Significant Impact
Despite these challenges, moving to smaller cities is expected to impact India’s technology industry significantly. The industry is expected to become more inclusive, with new talent pools entering the workforce. Additionally, the move is expected to help companies manage their costs better, which will help them remain competitive in a rapidly changing business environment.
The decentralization of the technology industry in India is a significant development that is expected to have a positive impact on the economy. The move to smaller cities is expected to create new jobs and bridge the urban-rural divide. And help companies manage their costs better. While there are challenges associated with this shift, the benefits are expected to outweigh the challenges in the long run. What do you think about the topic discussed above? Do let us know your views in the comment section below. Stay tuned for further updates.