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Global Capability Centers in India: A pillar of strength in India’s holistic socio-economic progress

June 24, 2021 4736 3 GCC

Global Capability Centers in India: A pillar of strength in India’s holistic socio-economic progress

GCCs have a rich developmental history built across the past two and a half decades of their existence in India. India is home to 1300+ GCC organizations, employing more than 1.3 million in workforce and contributing US$33.8 billion in gross revenue, as of FY 2020. NASSCOM and Deloitte collaborated to unearth the impact story of GCCs in India, with the aim to highlight the value addition generated by this sector across six core dimensions—economic, human capital development, innovation and ecosystem nurturing, social progress, environmental sustainability, and reputational positioning. GCCs have demonstrated their connect with and impact on the local community with their technological prowess, talent skilling, and socio-economic contributions. Ever since the COVID-19 pandemic first emerged, GCCs responded to India’s relief response with agility and resilience. Equipped with long-term BCP best practices and global experience of social investments, GCC organizations ensured that both employee safety in India, as well as, business continuity for the global parent was swiftly managed through work-from-home, while they initiated, continue to lead, several relief activities, such as office use for quarantine centers, canteens for large-scale food programs, vaccination drives, and local community awareness and relief work, actively working with local and regional authorities.

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The GCC story

GCCs were set up in India by their global organizations to provide value to the parent. However, GCCs have evolved significantly beyond this internal-looking mandate to make a substantial impact on India’s progress across six core dimensions—economic, human capital development, innovation and ecosystem nurturing, social progress, environmental sustainability, and reputational positioning. These contributions have not just leveraged India’s human capital and skilled resources, but in making them, GCCs have served as a critical channel in bringing global best practices – technological, business, talent, and growth-oriented – to India. This has led to an enhancement of India’s reputation as a global leader in technology and has led to the creation of world-class leadership talent from within India, for the world.

GCC value addition to India: The concept

NASSCOM and Deloitte collaborated to unearth the impact story for GCCs in India, with the aim to highlight the national/regional/local and even community level value addition generated by this segment of companies. This report, “GCC Value Proposition for India – An Impact Study”, presents the economic or equivalent impact analysis and a select set of high-impact case studies of GCC companies across sectors, size, and location within India, between 2015 and 2020. The study further presents a growth outlook for this segment in the next five years considering multiple scenarios driven by technology, talent, and policy levers.

The study shares insights from 80+ GCC leadership interviews, and learnings from Deloitte and NASSCOM SMEs and other stakeholders, to present an extensive analysis of direct and indirect value addition of this segment along the six core dimensions.

 

  • Economic: Direct, indirect and induced impact on national GDP - $103 billion, on tax contribution - $5.4 - $5.6 billion, and on employment – 5.5+ million
  • Human Capital: $250-300 million worth of productivity improvements by having trained most staff in digital technologies and nearly 200,000+ in advanced futuristic skills. GCCs comprise 27% of the Best Places to Work in India for the women workforce
  • Innovation and Ecosystem: 59% of the new corporate investments in Indian startups in 2019 were made by global MNCs, via their GCC counterparts, totaling $ 1.5 billion
  • Social: GCCs have invested north of $100 million on CSR initiatives, 40% of which is directed towards education, and have also impacted 1.7 million households through women empowerment programs
  • Environmental: GCC establishments are currently generating 30-35% of their energy needs through renewables, and save 7-8 billion litres of water annually in their campuses
  • India Brand: India’s global tech leader brand gets a strong boost as GCCs evolve to become strategic growth partners for their parents, led by global innovation hubs and digital and R&D CoEs setup by the GCCs in India

 

Backed by strong parental experience and guidance, a highly sensitive and forward-looking workforce, and a clear understanding of on-ground realities, GCCs are equipped to continue to employ their inherent skillsets and extend an empathy-driven approach to create sustainable socio-economic impact in India over the long term.

Promising outlook as GCCs unlock new horizons of growth

GCCs aspire to be viewed as more of a “change leader” than a “service provider”. The twin growth levers of expansion across the existing set, as well as, launch of new GCCs who bring in high-value work from the outset, have the potential to grow at a faster pace, in revenue and employee addition. The study includes a modeling exercise based on logical assumptions to map this growth at varying growth rates over the next 5-6 years. Of significance is the shift from services delivery to building global R&D centers and digital tech CoEs, and the increasing role of GCCs in positioning India as a regional strategy hub.

The way forward

The sector’s growth will help establish India as a destination-of-choice for global organizations seeking future-ready domain and technological skills at scale. To harness this potential, the government, GCCs, policy makers, and industry bodies will need to come together and drive action on several fronts, such as ease-of-doing business, infrastructure, IP policy enforcement, clarity on tax matters, and cyber security.

 

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