India continues to be the leading destination for outsourcing digital services

Developing the digital services

A recent report shows that India is still the go-to destination for businesses looking to outsource and develop their digital services, even during challenging global economic times.

The report, by Nasscom and Avasant, found that in 2023, many companies chose to “nearshore” their digital services work to India. This means they moved their operations to a closer location, in this case, India. Nearly half (45%) of high-tech and travel companies, along with over 40% of telecom, manufacturing, and construction firms, chose India for this. This highlights India’s growing importance as a global hub for digital services outsourcing.

The report also highlights a positive trend in traditional sectors like energy, utilities, construction, and engineering. These industries are significantly increasing their pool of digital talent, showing a wider commitment to improving their digital capabilities.

Generative AI (GenAI) is a Growing Trend

According to the report, Generative AI (GenAI) became a major technology in 2023. Many businesses (almost 70%) are now investing specifically in GenAI. This has led to a significant rise in digital service contracts across various sectors, including finance, high-tech, manufacturing, telecom, media, and even energy.

Industry experts believe this is a strategic move for businesses to speed up their adoption of digital technologies in a world where artificial intelligence (AI) skills are crucial.

The report predicts that investment in Generative AI will only grow in 2024. Most companies (73%) that invested in GenAI last year believe it’s important to spend more, especially on developing a skilled workforce in this area.

Overall Growth in Digital Technology Spending

The report also found that in 2023, over 70% of companies spent more than 20% of their technology budget on digital services. Additionally, nearly 90% of businesses plan to increase their investments in key digital technologies this year. This includes AI/machine learning, big data analysis, cloud computing, cybersecurity, and automation.

The digital landscape is rapidly changing, and businesses are actively involved in this transformation. Companies are no longer just focusing on reducing costs through digital solutions, but also on using them to strategically shape their future.

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