Impact of US Recession in IT

Fears and confusions are everyones mind in Technopark about recent US recession.Though no one likes or wants a recession, almost everyone appears reconciled to one in the United States.It would be naïve to imagine that a recession in the United States would have no impact on IT industries in india or in Technopark. The United States accounts for one-fourth of the world GDP and any significant slowdown is bound to have reverberations elsewhere. On the other hand, interdependencies between the US economy and emerging economies like India and China has reduced considerably over the last two decades.So the effect may not be as drastic.

the IT Enabled Services sector may be hit since a majority of Indian IT firms derive 75% or more of their revenues from the United States-a classic case of having put all eggs in one basket. If Fortune 500 companies slash their IT budgets, Indian firms could be adversely affected. Instead of looking at the scenario as a threat, the sector would do well to focus on product innovation (as opposed to merely providing services). If this is done, India can emerge as a major player in the IT products category as well. many IT companies are started thinking in the Innovation line, and you can see many examples in Technopark.

In macro-level, a recession in the US may bring down GDP growth, but not by much. At the micro-level, the IT sector could be affected. and it may last for a few more years. Innovation now may prove to be the engine for growth when the next boom occurs.

Fears of a US recession led to panic in the Indian stock market. most of the IT professionals are involved in stock business and inested thousands or several Lakhs in that. the meltdown in stock will affect stock, mutal funds and real estate where the Techies invested a lot.