Context: When the chips were down, your code kept the world running…” That’s how PM Modi applauded the IT sector for its commendable role during the pandemic. Speaking at the National Association of Software Services Companies (NASSCOM) Technology and Leadership Forum event on Wednesday, the Prime Minister noted how the tech sector had helped companies scale up to the digital challenge, and allowed employees to work from home during the unprecedented crisis, at the same time adding 4 billion dollars to its revenue at a time when there was degrowth all around. Now is the time to develop newer solutions for societal good, asserted the Prime Minister. He spoke about how the solutions India gave during the Covid-19 pandemic are an inspiration to the entire world, which is now looking at the country with greater expectations. On this edition of The Big Picture, we will analyse the scope and opportunities for the tech sector to evolve for larger good of mankind, and the growing need for responsible use of technology.
KEY HIGHLIGHTS

• The theme of 29th edition of NASSCOM NTLF summit is 'Shaping the future towards a better normal'.
• NASSCOM's two-day NTLF summit begins on February 17, 2021.
• PM Modi lauded IT sector revenue growth during the pandemic.

IT sector performance during pandemic 

• The IT sector has witnessed strong demand owing to digital transformation demand from companies after the global pandemic disruption.  
• The sector contributed almost 8% relative share to the national gross domestic product despite the Covid-19 disruption during the year. It also contributed as much as 52% relative share in service exports, 50% in total foreign direct investment from April to September 2020, according to the trade body.
• NASSCOM easier this month projected the revenue growth of the information services sector at 2.3% in the financial year 2020-21 (FY21). 
• It estimated IT companies’ revenue grew at $194 billion in FY21 as compared to $190 billion in FY20. 
• Top Indian IT companies performed better than analyst in the second half of the financial year 2020-21. 
• The growth comes on the back of rapid acceleration in digital transformation and tech adoption by companies in the pandemic year, the IT industry body said in its Strategic Review 2021 titled ‘New World: The Future is Virtual’. 
• The growth in the IT sector was largely contributed by spends of companies on digital transformational and alignment to digital practices. Digital spends contributed 28-30% of the IT industry revenues. 

Nasscom's Indian Tech Start-up Ecosystem report 

• India has added 1,600 new tech start-ups and a record 12 unicorns in 2020 (the highest ever added in a single year).
• Unicorn: It is a term in the business world to indicate a startup company valued at over $1 billion.
• The Tech start-up base continues to expand steadily at 8-10%. Sectors, which benefited from covid-19, such as edtech, agritech and gaming, are seeing a steady rise in first-time funding.
• Remote working continues to see significant adoption amongst tech startups, with around 30-35 % offering remote roles and 15-20 % companies having committed to remote work culture.
• In 2020, 14% of total investments were in deep-tech startups up from 11% in 2019.Furthermore, 87% of all deep-tech investments were in artificial intelligence (AI) and machine learning (ML) startups.
• India will have at least 12 more unicorns in 2021 taking the total count to 50.

Core growth drivers for Startup’s in 2020

• Digital acceleration, and shift from moving from offline to online
• Vocal-for-Local provided market support for start-ups to thrive
• Remote work enabled start-ups to reduce burn whilst accelerating growth of new start-up hubs.

Start-Ups In India

• A startup is an entity, incorporated or registered in India for less than 7 years.
• Its annual turnover should be less than 25 crores in any preceding financial year.
• It should be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

Challenges

• Corruption and Red-tapism: Presence of bureaucratic red tape and the corruption which goes into the set-up process.
• Lack of Adequate Incentives: The reports of over-regulation have impeded the growth of start-ups and there are relatively fewer provisions of adequate incentives.
• Lack of Investment: While more famous start-ups have seen multiple rounds of investment, other lesser-known start-ups have shrivelled due to lack of investment and capital.
• Bias Towards Foreign Products: Inherent bias in the consumer mindset in favour of services and products offered by foreign technology giants, which translates to lesser acceptance and lesser opportunities for the start-ups in India.

Initiatives for Promoting Startups

• Atmanirbhar Bharat: Digital India Atmanirbhar Bharat App Innovation Challenge.
• Make in India: Promotion to indigenously made goods and services under the initiative.
• Start-Up India Programme: A flagship initiative, intended to build a strong eco-system for nurturing innovation and start-ups in the country to drive sustainable economic growth and generate large scale employment opportunities.
• Start-up India Digital Platform: It is the world’s largest virtual incubator with over 300,000 registered start-ups and aspiring entrepreneurs.
• Start-up Grand Challenge: It channelizes the entrepreneurial capacity between Indian and Korean start-ups to work together and build solutions for the challenges facing the world.
• Atal Innovation Mission (AIM): Launched by NITI Aayog as a flagship programme, it aims to promote a culture of innovation and entrepreneurship in India.
• Some initiatives of AIM are AIM iCREST and Mentors of Change.
• Project Chunauti: It is a start-up challenge under the Next Generation Incubation Scheme (NGIS) initiative. Selected startups are provided human resources, legal, intellectual property rights (IPR) and Patent matters guidance as well as other incubation and mentorship facilities.
• National Initiative for Developing and Harnessing Innovations (NIDHI): It is an umbrella programme for nurturing ideas and innovations (knowledge-based and technology-driven) into successful startups.