India-Based Tech Firms Boost U.S. Economy, Job Growth
While the overall unemployment in the United States remains disturbingly high, the direct workforce employed in the country by the Indian IT sector has almost doubled in the last five years to 107,000, and it is estimated that the industry supports more than 280,000 jobs in the United States, growing even in a weak economic environment, according to a study by the National Association of Software and Service Companies (NASSCOM). Most of these indirect jobs span across various sectors and at every level in the U.S. economy, ranging from Virginia to Texas to California.
The study, "Contribution of Indian Tech Companies to the U.S. Economy," also reaffirms U.S. government figures that show investments from India to the U.S. grew by 90 percent in 2010 from the year before, capping what has by now become a trend of growing commerce between the two countries. Trade between India and the United States has increased eightfold in the last 20 years, the study noted.
Three out of every four jobs supported by Indian companies are constituted by locals in the United States, and based on updated employment multipliers of the Economic Policy Institute, for every one direct job, 1.6 indirect jobs have been added to the ecosystem, including in the supplier industry (logistics, telecom and computer hardware), re-spending industry (retail and hospitality), and federal and state government jobs. Headcount was highest in California, Illinois, New York, Texas, Washington, New Jersey and Michigan. Overall, about 40 percent of U.S. nationals employed by Indian companies are working in California, Michigan, Texas and Illinois.
The Indian technology industry has paid more than $15 billion in taxes to the U.S. Treasury in the last five years, according to the report. In addition, the report found Indian technology companies have invested more than $5 billion through 128 acquisitions, saving and sustaining thousands of jobs in the United States. Growth in acquisitions by the Indian companies in the United States increased to 54 percent in fiscal 2010 from 41 percent in fiscal 2009.
The industry has also made commitments to the innovation economy of the United States by setting up innovation centers to drive next-generation technology development. Also, the report noted innovative solutions from Indian companies are helping U.S. citizens further by reducing cost of public services, improving health care systems and introducing new affordable products for daily use. One example the report cited is Infotech Enterprises, an engineering services company that designed and developed small and affordable USB-powered electrocardiogram (ECG) monitoring devices for citizens in America.
"Indian technology firms are deeply committed to the United States. Both they and their employees are important contributors in their local communities as well as the country as a whole. The report that we have released is our endeavor to quantify the trends and benefits behind the significant investments India-based IT and BPO firms are making in the U.S.," said Som Mittal, president of NASSCOM. "The next phase of this partnership will see a continuation and vast expansion of the investments both nations are making in the other. We look forward to a greater engagement in the future, working closely with the U.S. companies to build their growth."