Will the IT Industry be an enabler to struggling sectors of the economy?

Currently, India is one of the most affected countries from the coronavirus pandemic. Every day there are over 50,000 positive cases. Although India underwent a huge lockdown for 3 months in three phases, the results are poorer than one could imagine. Then, there is the effect of the economy. To put it mildly, it has fallen down a cliff. The Government refuses to acknowledge the problem but that does not mean the struggling fishes (industry) are not paddling their way back into the water.

That's when the IT industry comes in. The post-lockdown era saw almost 70% shift in economic activities. Transportation and hospitality bore the highest brunt while Edtech and tech-enabled communication apps saw a rise in use. Looking at the latter, it is very clear that technology played an important role in bringing these sectors up.

For example, the education sector is one of the worst-hit places. Schools and colleges are out of businesses and no one knows when they will be back up. But on the other hand, the EdTech Sector has blossomed. This simply means that the industry saw a paradigm shift towards technology. Similarly, the tourism sector, too, shut down abruptly. Then, 3D trips and vacations took its place. From the above two examples, we can see that these industries adapted to technology and paddled back into the water.

How can the IT Industry help bring change in these sectors?

Tourism

A KMPG report from March had predicted that the Indian tourism and hospitality sector will lose more than over 3.8 crore jobs. And they did. Over 4 crore people in the world lost their jobs in the Hospitality sector. According to the World Tourism Organization (UNWTO), international tourism could shrink by 60-80 per cent in 2020. This shrinkage due to the ongoing pandemic could result in the revenue loss of $910 billion to $1.2 trillion. Further, the report added that this will place millions of livelihoods at risk.

But then, many people went to virtual vacations and the Industry saw a hope to come back into the business. MakeMyTrip offers a live 'virtual guided tour' experience with local hosts and travel guides taking the tourist sightseeing in video platforms. Others, like Expedia, offer a part live and part recorded experience, including a licensed guide-led webinar packed with photos, videos, polls and a fully interactive chat function. Not only are they cost-savvy to the company, but these trips also don't burn holes in the pocket of the traveller. So, through the use of technology, a new branch developed in the tourism industry and some people were able to keep their heads up.

MSME sector

The MSME Sector is at the heart of Indian Livelihood- its villages and semi-urban areas. They are mostly engaged in manufacturing and export activities and drive the Indian economy. But dues to the lockdown, MSMEs are out of action and reeling into crisis. This sector alone contributes 34% to the GDP. But today, they are not paying their employees and most big productions stand still as these are the primary market traders. But then the Government provided the Rs 20,000 crore relief package, divided into two funds, for helping MSMEs.

Now, the question is, how can the IT Industry enable this sector to develop. One of the resources that these sectors could opt for is online selling. Next, according to a Delloite report, many MNCs are looking for alternate manufacturing destinations to diversify their supply chain and reduce costs.

If the communication is well-established, then these could present India with an opportunity to be the next emerging manufacturing hub. The world is working on a new normal- the world of automation and outsourcing. And the MSME sector could well exploit it. The report also states that several MCS have already established their second headquarters and R&D centres in India after the United States. So, a community ecosystem trend may continue to reduce the gap of economic burden on the MSME Businesspeople.

Agriculture

The agriculture sector is finally coming in terms of technology. Rising Agritech StartUps have helped farmers to understand what it meant to hit when the iron is hot. For example, a report by Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB) states that family forms play an important role in the development of the GDP and the primary sector. The report studied the evolution of Indian family firms in terms of their areas of operation in the post-liberalization period.

Apart from concluding that Indians moved from an agrarian economy to a services-focused nation, this report states that millennials have also adapted their family lineage. Infact, even in primary sectors, financial services, IT and ITes and telecom services have facilitated the primary sector, have been some of the strongest and vibrant sectors.

Moreover, the finance ministry’s monthly economic report for July states that as India is unlocking, “the worst seems to be over”. This commented subtly hinted the Agriculture sector as the report called it the “The Silver Lining in the Year 2020-21”.

Textile Industry

The textiles industry in India is estimated at more than US$ 100 billion in January 2020. It is the second-largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. So, when the pandemic happened, it disrupted the lives of these people.

The industry revenue fell down by 20%, and as the unlock happens, the revenues will rise; thanks to upcoming wedding and festival season. But even if this disruption ends, will people stop fearing physical touching even in malls and shopping centres? There's a high chance. Now the demand for hygiene textile would be very high. Thus paving the way to the introduction of online sales even in rural India and a widespread domestic market that will buy hygiene-rich goods.

Read More: Black Swan Effect: 9 Worst to Best affected Tech Businesses due to Coronavirus Pandemic in India