CLSA has an interesting new report, ‘Chain Reactions’, about the increasing importance of the IT sector to the Indian economy. The report says that, at current rates of growth, the sector will have the same impact on the economy in the next three years as it had in the past 20. IT exports will pay for all our oil imports from next year. IT will take care of a third of urban employment needs over the next three years, picking up four-fifths of employable engineering graduates. The sector will account for a fifth to a quarter of the rise in GDP during FY 07-FY10. It will contribute almost three quarters of housing demand and two-thirds of forecast commercial real estate demand in the country and it will support two-thirds of five-star hotel room additions.
The point is that a large chunk of incremental demand will come from this sector. Marketers will do well to find out more about the tastes and preferences of IT workers. Here are some of CLSA’s findings: IT professionals spend a cumulative $1 billion annually on eating out; can pay premiums for housing by reputable builders; are big users of the new banking channels; have telecom ARPUs 2.8 times the industry average; spend a lot on health care and professional training; and their objects of desire include the Nokia N-series and Apple I-phones.
Also, don’t forget the trickle-down effect — one IT job creates 1.4 other jobs. In short, IT is now large enough to become the growth-driver for the Indian economy.
Click here to download the report