15% Of India's Tech Talent Now Resides In Tiers 2, 3 Cities: Report
A recent report jointly released by Deloitte India and Nasscom has shed light on the significant role that emerging tier 2 and tier 3 cities in India play in housing up to 15% of the country”s tech talent pool. These cities, including Ahmedabad, Chandigarh, Indore, Jaipur, Kochi, Mysuru, Warangal, Hubli, Madurai, Raipur, Guwahati, and Vishakhapatnam, among others, have the potential to drive substantial cost savings for India”s $245 billion technology industry.
The report highlights that talent pool costs in these emerging cities are 25-30% lower than those in more mature tech hubs, accompanied by a remarkable 50% reduction in real estate rental costs compared to established cities. This cost advantage has attracted over 140 Global Capability Centres (GCCs) to set up operations in these locations, showcasing their attractiveness for business growth with lower investment requirements.
Currently, up to 15% of India”s tech talent resides in tier 2 and tier 3 cities. As the trend of decentralising work gains momentum, these emerging cities are poised to offer new opportunities for the country”s tech workforce, according to the report.
As per Deloitte India report, notes that while large cities used to be the primary focus, the post-pandemic era has witnessed a significant decentralisation of work across India. Approximately 60% of India”s graduates now come from smaller towns, and 30% of all graduates relocate to tier 1 cities in search of employment. These emerging cities, currently accounting for 10-15% of the tech talent, hold substantial growth potential, especially when supported by the government”s commitment to world-class infrastructure.
Over the past decade, the Indian startup ecosystem has played a pivotal role in the tech sector, creating approximately 900,000 direct jobs and 300,000 indirect jobs. More than 7,000 startups, spanning industries from DeepTech to Business Process Management (BPM), operate in these emerging hubs. The report emphasises that startups in these cities witnessed a 50% growth from 2014 to 2018, with expectations of 2.2 times growth by 2025. This underscores the mutually beneficial relationship between the tech sector and the innovation ecosystem.
With government support, the availability of talent, and a new operating model that promotes equitable work distribution, these emerging hubs are primed for exponential growth. The report identifies 26 locations with the potential to become centres of innovation and growth, driven by a highly skilled workforce proficient in cutting-edge digital technologies. Approximately 800,000 individuals within these emerging hubs are adept in the latest tech domains, with around 100,000 of them highly proficient in the latest digital technologies within the target talent pool.
Sukanya Roy, Head of GCC and BPM at Nasscom, emphasises that as state governments and local ecosystems invest in skilling initiatives and improve the ease of doing business, these burgeoning hubs are now crucial waypoints in India”s journey to becoming a global technology powerhouse.
Finally, these emerging Indian cities represent a significant resource for tech talent and cost savings, with the potential to reshape the landscape of India”s technology industry. Supported by a skilled workforce, government initiatives, and a thriving startup ecosystem, these cities are well on their way to becoming innovation hubs that will drive India”s tech sector forward.
