How Wipro plans to take on number one and two IT giant.

Azeem Prem Ji

Wipro said it expects bigger software contracts and increased spending by clients in continental Europe, a market India's tier-1 software vendors have identified as the next growth-engine.

India's No.3 software services vendor, whose clients include Cisco Sytems and Citigroup, on Friday reported a 27% growth in net profit to Rs 2014.7 crore from Rs 1589.5 crore last year. Its revenues from Europe grew 5.4% aided by a revival in demand for technology services.

"Customers in there (continental Europe) are giving big contracts in infrastructure segment. Large customers like Shell and Philips have big deals," Ulrich Meister, senior vice president, continental Europe and managing director of Wipro GmbH told ET.

Meister, who joined Wipro in November last year from German information technology firm T-Systems, said enterprises in continental Europe are now looking to work with offshore software providers due to better pricing and higher automation.

Analysts and companies expect higher demand for IT services from Europe this year as the macroeconomic situation improves.

Meister said Wipro will expand its sales and delivery team in continental Europe markets to expand its client base.

"We have to change our business model there by getting a local flavor. We will expand the headcount. It may hit us on the margins, but not so much."

"Business in pure English won't do there, so we are increasing the number of people in sales and delivery to reach out to local clients," he said.

IT to create maximum jobs in 2014: Assocham

Information technology, banking and agriculture-related businesses are going to be among the key job creating sectors in 2014, according to a study by industry body Assocham.

"Information Technology (IT), pharmaceuticals, banking and agri-related industries such as farm equipment, fertilisers and seeds, will remain the largest employment generation sectors in 2014," the chamber said in its study.

All these sectors will stand out despite the present state of the economy where net employment is being lost and not created in a large majority of sectors.

IT will remain the net aggregator of jobs in 2014 due to recovery in the US economy, it said.

"The US economy is showing signs of improvement... A large number of American firms are expected to increase their IT spend as consumer sales pick up there," it added.

Continuous pressure on rupee will help increase the net income of IT companies and they will keep hiring, it pointed out.

"Since our economy still remains a good mix of organised and unorganised, large corporate and small enterprises, a large number of people in rural India are dependent on agriculture and tertiary industries; there are inherent and inbuilt strengths which come handy when the chips are down," Assocham President Rana Kapoor said.

Pharma sector will continue to hire in 2014. But because of some setbacks and tightening of regulations in the US and some other markets, the companies will have to invest more in improving their manufacturing and Research & Development.

Further, the study said that agri-based industries are expected to do better in 2014 on the back of a good rabi crop.

"The positive spin off would be evident in a whole lot of industries which are directly linked such as tractor and farm equipment manufacturers, irrigation firms and those involved in developing and selling seeds and fertilisers", it said.

On banking, the study said that 2014 is expected to be a better year for the sector.

"The NPAs would be reduced since the focus is very much there on the issue and there are signs of recovery in some segments of the economy. Besides, a huge number of backlog vacancies have to be filled up in public sector banks."

For the private banking sector, new licenses, which are likely to be given before April, will throw up new job opportunities.

While the new banks will leverage technology, job opportunities will arise both in brick and mortar as also in development and implementation of technology solutions, the study added.

Opportunity to create 2 Lakh R&D jobs in India by 2018

India, which has a presence of 228 of the top 500 firms globally, has the opportunity of creating 200,000 jobs in the research and development (R&D) space in the next five years, global advisory and management consulting firm Zinnov said in a report.

According to the report, Crossing the Value Chasm, China is the leading destination for R&Dinvestments with a total of 385 G500 companies having a presence there as compared to 228 global 500 companies in India and 220 firms in the Bay Area in the US.

"In keeping with the historic trend that companies with a higher R&D spend find India more attractive for investments, there is a clear opportunity to create additional 200,000 R&D jobs in India by global 500 companies in the next 5 years," the report added.

The top 500 R&D spenders contributed over $577 billion, with the top 100 R&D spenders alone contributing 66 per cent to the global R&D spend, it said.

Of the total global R&D spend, 40 per cent of the overall is from organisations headquartered in North America, followed by 34 per cent from Europe, 18 per cent from Japan and 7 per cent from Asia-Pacific, Zinnov said in the report.

"In 2012, 26 firms increased their global R&D spend by at least 20 per cent and contributed over $19 billion. Fourteen of these companies have a presence in India and have increased their global R&D spend by $14 billion, of this only $129 million was invested in India," the report said.

At present, close to 50 per cent of the global 500 firms present have over 10 per cent of the global R&D head count in India.

While software/Internet companies tend to achieve the milestone of locating 10-20 per cent of their R&D headcount in India faster than others, fee companies seem to have reached a ceiling at a minimal 1-4 per cent of the global head count.

"A factor is that many of the India centres lack strong leadership and global stakeholder buy-in. Currently, only 11 per cent of the companies with centres in India have global roles in engineering, product management and support functions," it said.

Only 15 per cent of the India leaders are proactive, influential and have a global impact, indicating a need to grow strong a leadership pipeline, the report added.