Apple, Microsoft, Amazon, Alphabet (erstwhile Google), Facebook and Alibaba -
what do these companies have in common? For starters, they happen to be among
7 companies in the world in terms of Market Value, with a combined
market value of more than 4.6 Trillion Dollars. That makes it about 3
GDP of Sub-Saharan Africa - picture that!
But what else to these companies have in common? They all have Digital
Technologies at the core of their businesses.
It takes no rocket scientist to visualise the value and impact that Digital can
have on any business, something that not just startups but incumbent business
giants too have realised. Take General Electric’s efforts to place
internet-enabled sensors across the streets in the US, for example. Or take
Nestle’s Digital Transformation success focussed on social media and e-commerce.
The future is Digital.
Not only is this transformation imminent, it also happens to be fairly expensive
and signs are that it will become more and more expensive in the near future.
Why is Digital Transformation expensive? Why will it continue to cost more to
build Digital Products?
Reason 1: Limited Tech Resources
India happens to be a country of more than 1.3 Billion, plush with human
capital. How then, can there be a dearth of capable tech resources? Well, it
turns out that 80%
of Indian Engineers are not fit for jobs in the first
place, and less than a fourth of these remaining 20% have the ability to
write code. Drill deeper for specialised industry requirements like
“Artificial Intelligence”, and the numbers are absolutely dismal. Only 2.5%
of these engineers are skilled in the domain.
For an economy that is looking to rely on this tech workforce for its
Digital requirements, these are not very promising numbers at all.
To overcome this talent deficit, Indian Startups are already
looking to hire
from overseas, with their hunting list focused on artificial
machine learning, robotics and big data. There seems to be no other
Reason 2: Expensive Product Managers
Before we get into the details, it is important to first understand how
Product Managers are different from the rest of the engineering workforce.
For most digital products, Product Managers are essentially the binding
force between business requirements, programmers and customer experience.
It is well understood that Digital “products” are at the heart of any
Digital Transformation project - be it a startup or a large company. Product
Managers happen to be at the helm of most of such product development.
Which brings us to the key question - why are they so expensive afterall?
With a combined workforce that has a strength of a meagre 20,000 Product
Managers, India is witnessing a huge shortfall of skilled product leaders.
Simply compare that with the US’ army of product managers, estimated at 1.8
Million and you will begin to fathom the extent of this scarcity.
Limited supply and an ever-increasing demand is unfortunately only solved by
one seismic shift - that in price. As per latest estimates, these product
leaders are already about 3 times as expensive as generic project managers,
with no signs of becoming cheaper.
This Digital Talent Gap is a critical challenge for an economy with an
estimated contribution of $170 Billion from its core digital sectors.
The power of building great Digital Products happens to rest in the hands of
a very limited few. While we hope that the Indian tech workforce is able to
find ways to upskill at speed, we hope to make our own little contribution
at FavcyX, by democratising technology and bringing it to the hands of many
to effectively change this narrative.
Budgeting for Digital