Focus on services sector, global economic outlook are top priority: Nasscom Chief Economist

Dr Anupam Khanna takes over as Chief Economist and Director General - Policy Outreach at software association Nasscom, at a time when the Indian IT industry is staring at global uncertainty. Deepening economic woes in large markets such as the US and the UK have started to reflect on the analyst outlook for the sector and the share price performance of tech companies. Business Line caught up with Dr Khanna to discuss his priorities and action plan over the next few months. Excerpts:

Could you outline your agenda for the next 3-6 months?

The first is getting a firmer handle on the global economic outlook and what it means for the industry, because it will play out different for different people. Second is to develop a process of consultation with the individuals in the industry to focus on what are some of the areas of growth. Another interesting area is to look at the role of services sector in the growth of Indian economy.

Yours is a newly-carved out post within Nasscom. Has it been necessitated by this global economic turmoil?

The industry has been undergoing a lot of change. It has had a phenomenal run - but the world out there is changing, in two ways. First, technologically, things like cloud computing are leading to fundamental changes in the industry. New opportunities are getting created but also new threats. Also the context of the industry has changed. Ten years ago, the industry was relatively small. Now, the world is huge and the opportunities are bigger. The fact is that it is an industry where business environment makes a difference. So, to educate the industry itself of how the world is changing and what it means, is useful.

Moreover, with the economic crisis there is this whole rethinking. The centre of gravity is shifting to Asia. So what does that mean for the industry? Mind you, so far, a large part of the revenues have come from the US and Europe. So what does China mean? Do we think of them as a collaborator or a competitor. Again my function will be providing a platform on those aspects, looking over the horizon and at the global economic outlook. In addition, there is recognition in the industry that while exports will continue, there is an opportunity within India is areas like transportation and skill development.

IT is an area where technology, economics and public policy come together. And to me this is a role that gives me an opportunity to put all those things together.

In your view what will be the impact of the economic turmoil on Indian IT sector?

So there are broad economic forces at play. We now know what caused the crisis. And there is enough experience on how different countries have dealt with financial crisis, how long it takes etc. In the West, life is not going to be easy for the next few years. It will surely have repercussions for countries like India, China and others.

In the long run, there will be certain secular trends driven by demographics, driven by technology and consumption amongst other factors. For the industry, there are opportunities that are likely to be created out of the global economic environment, due to factors like cost pressures. Also, remember companies (clients) will shuffle things, look at different ways to cope with the slowdown and again those will lead to opportunities (for IT companies). We cannot forget about the West - there are still opportunities.

In the long term, the economic gravity is shifting to Asia and other emerging markets like Latin America.