India’s outsized tech industry’s contribution to the US economy results in a total impact of 1.6 million jobs supported
Accessing the far-reaching contribution of India’s technology industry to the United States and its critical impact on talent, innovation, and overall economic growth in the United States, National Association of Software and Services Companies (NASSCOM) released its reports titled “Impact of Indian Tech Companies on the US Economy” and “Building the Current and Future US Workforce: Role of Indian Tech Industry in the US”. IHS Markit (now part of S&P global), the reports were launched in person and virtually at the Wilson Center in Washington DC in the presence of US officials, industry leaders and key influencers. served as a platform to announce a new and expanded partnership between NASSCOM and the Wilson Center.
A catalyst for economic activity in the United States
Indian technology companies in the United States continue to increase their presence and are now a vital part of the innovation progress of American economies. This creates a multiplier effect for their US suppliers, employees and customers. In 2021, India’s tech industry directly generated $103 billion in revenue and directly employed 207,000 people in the United States with an average salary of $106,360, recording 22% job growth since 2017. the value chain to end customers, Indian technology companies invest in American talent and technology which they augment with their global resources to develop and produce cutting-edge innovations for industries and customers.
India’s tech industry’s direct impact on operating and capex spending, as well as customer support, rippled through the US economy, generating a total of $396 billion in sales in the United States (production), supporting a total of 1.6 million jobs and contributing more than $198 billion to the U.S. economy – more than the combined economies of 20 U.S. states in 2021.
The reports also noted the significant investments the industry is making in the United States and its commitment to both growing its U.S. employment base and helping to nurture the next generation of talent. Indian tech companies have contributed over $1.1 billion and developed partnerships with nearly 180 universities, colleges, community colleges and others to strengthen and diversify the STEM pipeline in the United States. It also provided over $3 million more for K-12 initiatives alone. These efforts have reached more than 2.9 million students and teachers to date. Additionally, more than 255,000 current employees have been upskilled by the industry.
Expansion of the talent pool
The Indian tech industry in the United States has played a significant role in expanding the talent pool outside the traditional tech hub states. This has contributed to some of these states, like North Carolina, becoming emerging tech hubs. Over the past decade, these states have increased their employment rates by 82%, making outsized contributions, especially in states that have concentrations of IT talent below the US average. This has helped industries operating in these states accelerate their digital transformation capabilities through a large pool of IT talent.
Debjani Ghosh, Chairman of NASSCOM, said, “India’s technology industry is making a vital contribution to the US economy through local investment, fueling innovation and the workforce, and enabling the development of local labor skills. The United States today has one of the largest gaps between demand and supply compared to other geographies. India’s tech sector works with over 75% of Fortune 500 companies, most of which are headquartered in the US and are therefore well equipped to understand and address the critical skills challenges of the digital age. Strategic collaborations between nations, industry partners and academia will be key to bridging this gap between supply and demand and creating growth-oriented solutions that focus on building human capital to further improve the competitiveness of the US economy on a global scale.
Bridging the gap between talent demand and supply
According to the report, demand for STEM occupations in the United States is expected to grow 1.5 times faster than non-STEM occupations over the next decade. Around 70% of the growth in this demand is expected to be driven by IT occupations, which will account for 51% of STEM occupations by 2030. In 2021, there were a total of 6 job openings for every IT and math worker available in the USA. which has now grown to 11 vacancies per available IT worker in 2022, causing the global gap between talent supply and demand to widen. India’s tech industry in the US is well positioned to bridge this STEM gap by emphasizing foundational skills and building foundational building blocks for learning