India’s tech talent demand–supply gap lowest amongst top nations – NASSCOM Study

Comparatively, the US has the highest demand-supply gap in tech talent


Shortage of tech talent is not unheard of, and India is not the only country facing a talent crunch in this space. A recent study conducted by NASSCOM, (National Association of Software and Service Companies) ‘the demand and supply analysis report’, states that shortage of tech talent exists all over the world and if we do a comparative study, India has the gap between demand and supply of tech talent is lowest in India, compared to countries such as the US, the UK and China that are amongst the world leaders in technology.

The study reveals that India’s demand–supply gap stands at 21.1 per cent, which is the lowest amongst the countries analysed in the study. The study also concludes that the highest demand–supply gap in tech talent exists in the US. It stood at around 29 per cent in 2020-21. Talking about other top countries, the UK took the second place in the highest demand supply gap with 26.3 per cent and Australia followed with 26 per cent.

China, which is also a tech talent hub globally, posted a demand–supply gap of tech talent of little less than 24 per cent. Currently, the US has the highest tech talent pool with 4.4 million people working in the tech industry, and China follows with 4.2 million people. On the other hand, in 2021, the tech talent in India stood at 3.8 million whereas the total employee base in the tech industry is 4.7 million. That means, in India, about 50 lakh people are working in the tech industry alone.

Looking at the demographics, amongst the 3.8 million working tech professionals in India, 1.3 million are digital tech talent and the remaining 2.5 million account for the core tech talent in the country. The study suggests that the digital tech talent is growing five times faster than the core tech talent in the industry. This certainly indicates that the need for digital tech talent skills is much higher.

As the study defines it, digital tech talent consists of the talent employed in all 10 technologies defined under the ‘FutureSkills’ subsector. Essentially, this consists of artificial intelligence (AI) & Big Data Analytics, IoT, cloud computing, cyber security, RPA (Robotic process automation), blockchain, AR/VR, 3D printing as well as professionals employed in Web and mobile development technologies.

On the other hand, the core tech talent consists of the tech talent employed in traditional/core tech (outside the digital talent pool), which includes network & systems, IT infrastructure, IT support, database, test/QA, legacy software development skills.

Future appears grim

Though the overall demand–supply gap in tech talent is low in India compared to other top natoins, still companies will find it difficult to meet the demand and supply gap in the future. The report suggests that by 2026, demand–supply gap for digital tech talent is expected to increase over 3.5 times. This means, India will see a shortage of digital tech talent by 14 to 18 lakhs. The tech industry, on the other hand, can expect a total demand–supply gap of 14 to 19 lakh people in India.

Why this talent gap exists

Looking at some of the numbers, India produced around 21 lakh STEM graduates across all fields including undergraduates, postgraduates and Phd students in 2020-21. Amongst these, eight lakh are computer, IT and math graduates. The study suggests that out of the large number of graduates in computer science, IT and Maths, only 35 per cent (around 280,000) are employable and ready to work in the tech industry. The remaining 65 per cent require further upskilling to get a job in the tech industry. The study states that India’s universities are lagging in terms of industry-academia tie-ups required to provide market-ready training, internships and learning to graduates, which further results in the talent gap.

However, the academia is doing their bit in producing digital tech talent in the country. Their focus is on helping graduates specialise in digital skills. In 2020-21, amongst the STEM graduates in India, 10,000 to 15,000 had AI and ML as part of their curriculum, 2,000 to 3,000 had cyber security, and 7,000 to 10,000 had cloud while over 1,000 had blockchain and 5G.

To close the industry-academia gap, the researchers suggest an “increase in corporate collaborations in tier-II & III universities to overhaul course curricula, by including introductory to medium-level complexity courses in the tech domain.”

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