ITNomics

A linear study on Spending Pattern of New Age Employees.

An IT Professional’s Expenditure Governance and its Impact on Society - With 8+ years of empirical data and observations (sample study done in and around the Pune region)

Why this research paper?

Contemporary understanding of today’s IT world and its IT associates created curiosity in me – to feel, observe & experience them. After the research & analysis of IT professional’s self & other governance, I understood a pattern that has its direct & indirect impact on society. It is my first attempt on this topic and I want to put across my thoughts and observations about this fast-track industry and its knowledge player i.e. - an IT professional. These ITP’s have a direct role in social governance in whichever place s/he stays.

It seems obvious to simply criticize the governance of the IT industry employees & silicon valleys of India. As a tenderfoot in this area, I will assure you to give a good amount of validation around my argument with the help of the data gathered and rationalized through observations, survey methods and interviews. The respondents are from the existing IT world and the experience ranging from 1 to 15+ years in the city of Pune. With the fair participation from all the stratum of IT organization (Services & Product) and absolutely sincere inferences of the participant's response, this paper has been written.

Right from day one in this industry, my observations were flowing in different spectrums. I was observing whether an IT professional pays attention / thinks about the other side of the society where s/he is part-of it. Honestly, it is obvious to react than to respond to these behaviours. This piece of writing will state some observation-based survey findings of any IT professional (IT Professional = ITP, now on). These large cohorts won’t fall into the macro category of such behaviours, depositions or acts. However, this article attempts to keep aside a few rare behaviours but will try to highlight the predominant ones which impact the larger society and other working classes.

It’s been observed that ITPs have a very peculiar behaviour in the context of life i.e., Social, Political, Economic and Psychological. Their way of spending habits, way of expressing, the life-style of carrying oneself, style of responding has ultimately created a negative impact on non-IT person & rest other professionals (that is the hypothesis – before coming to a researched conclusion). Thus, it does have an effect on other's social life and everything linked in the above sequence. The impact of ITP’s lifestyle on the life of others creates a huge social gap between them & other working population. My theory for this primary data-based research paper is that “there is a negative impact on the society and its economics because of IT professionals spending habits, which are highly unusual and most of the times unnecessary too.”

Premise

The following questionnaire is only meant for the research purpose which may get used in the external world, without publishing the names of the participants.

Hereon, the data will be presented as received through surveys, interviews and observation methodologies so far. Each data point will have a direct or indirect impact on my hypothesis. It may or may not be commenting on macro-economic factors which could be largely driving the state or country-level spending’s and manipulating consumer behaviours.

Before I begin, the basic premise of this paper is to get into detailed levels of spending style, habits, ignorance and thus precedence setting done by ITP’s. It touches upon most of their ways & means to overspend, where it is absolutely disrupting the ecosystem. It could be categorized into but not limited to –

• How they talk or negotiate with any vendors
• The cost they manage to pay for the rented or own apartments/houses
• The desperate compulsion of weekend parties
• Converting window shopping to actual purchase in the mall or the market
• The use of digital platforms for spending & rupturing the equilibrium further

There could be varying contributions of ITPs on this aspect, however, when the sample size has been taken from Pune which is the fastest growing IT hub of India, their involvement & contribution for this disruption appears very predominant. It can be reestablished through an increase in prices across the cities. Let me start sharing the datapoint view on these points mentioned so far and a description and predictive analysis of the question.

Questionnaire

1.      I consider myself most or one of the intellectually appealing / ahead in development / sophisticated element of society

2.      I think, I contribute to the maximum for growth/development of overall society – my contribution to overall income/revenue of city or town from working-class population

3.      It is pretty obvious that the monthly sum of money with me is far better than any other equally qualified professional counterpart of mine from the non-IT industry/sector

4.      The society & its structure of working has been changed since me & other IT people like me joined in (labour) job market through the IT Industry

5.      I feel, in today’s society with IT professionals, there is the trend of increase in price value in every bit of daily needs - even if one is staying in less developed area of city, which was as good as a village and relatively cheaper in its old days

6.      My spending habits are inline & aligned with the spending habits of any other individual in my profession

7.      I find my spending habits are totally because of my compensation/salary - I earn which is relatively high, as compared to any non-IT professional or most other professional

8.      As per my standard of living, I buy & consume more things which most of the time are more than require (for example – I spend/buy even if I casually visit malls or marketplace)

9.      I am a frequent visitor to any new/old mall in the city and my spending appetite triggers me hard to spend there.

10.   I believe that I should get the things next door / near to my house to save time – irrespective of their pricing

11.   I think that my high spending habits are disturbing the spending habits and total available income of anyone from a different profession/business

Each question has been responded to by the participants from different age groups, different tenure levels in IT organizations of Pune city. As already stated, these participants of both genders were from Product, IT services, TSP’s, Consulting organizations. Next, we will be in a position to see the strikingly clear responses and analytics around it.

Analysis

From the below graph it is clearly visible that the supremacy (self-serving not proven) in terms of intelligence & sophistication, is carried by ITP while being here. Around 62% + 28% responded with agree & strongly agree options and similar things I have observed - while interacting & working with them.

Graph 2, depicts the conviction of ITP for his contribution towards the earning capacity of the city/region he/she is part of and to a large extent it has been proven by other GOI reports on services from the IT industry that boomed in India due to cheap labour strategies of IT players. The number of respondents is at 66% and I have interacted with almost all 100% of respondents and somewhere each one of them has this conviction.

When it comes to earning capacity of the ITP, in chart 3, one can see the clear majority of respondents think they have a better hand. I can quote a simple example of a Mechanical/ Production / Civil engineer who gets a placement in any manufacturing organization vis-à-vis someone in the IT world have a very striking pay gap difference. In-fact there are many more reasons (macro to microeconomic) for non-IT professional to earn less but the simple presumption of fresher to experienced IT person has the strong feeling that they have it better and it also subjects to their lifestyle.

Indeed, the structure of the labour market has been reshaped due to ITP’s addition to it and this is the essence of what I have started observing & penning down my thoughts around this piece of writing. In chart 4 it is vividly clear that respondents also feel the same. It may be unclear about what is their understanding of the labour market, however, each one of them is called out as labour and when they fill in their labour-time sheet every-week of their work.

It may appear strange to any reader that ITPs are labour in the technical language of economics/industry and even I realized while decoding this question to most of them. Otherwise, if someone is working in super finished AC offices, donning fancy to formal dress codes, interacting in English (in India, English is one of the ways to exclude & will be sharing my views about it in another article), with 5 days of working (in general all IT employers) doesn’t consider himself as labour. Certainly, I am not getting into definitions given in several labour laws but as they consider labour as the lowest working class, with no social status by almost all of them. It may appear that it is a generalized situation, but it is most likely the situation observed so far.

In my next set of response analysis, it will be touching the core of the argument and it will help us deduce the spending capacity of ITP and how it disturbs the overall ecosystem. 

This flow will continue till it helps to establish the original argument of this paper and puts primary onus focus to understand the ITNomincs as word or phrase. In all the 6-analysis chart (5 to 10) – essentially points out at the various instances/events where respondents share his/her spending style & which supports the argument further.

Chart 5 – is featuring one of the most direct questions on the everyday situation which shows how all the areas near SEZ / ITSP have had developed and due to that development of residential complexes and gated communities have flourished very fast. All these residential places gave very strong reason for all household services, vegetable and any such vendors to offer services at a premium price. Historically these places were villages, barren lands with the local population and on the positive side, these people got easy customers, however, for ITP themselves and other non-IT professionals who are staying outside all these, the service price has gone up drastically. Eventually, it has dabbled the entire householding budget. This trend is common across the region (98% of respondents feels so) and it is still rising.

This extra paying capacity of ITPs certainly puts unnecessary pressure on other working professionals and service providers too. Eventually, it has started impacting new ITP’ and this will come in through the next chart analysis.

In-line with chart 5, the subsequent responses on question 6 shows, the respondents (86%) are very closely aligned with the spending style of another ITP. If we visit any mall or shopping complexes over the weekend, ITP’s tendency of spending is very predictable, and they do it for certain things in a uniformed way. Whether it is buying things which are not needed or even getting into eateries just for sake of it. Though it doesn’t connote direct correlation to the central theme of this article, it gives the clue around how ITP spends in the general spectrum of spendings. Chart 8 and 9 support this claim very well.

The strong assumption of ITP (it has been generalized now) is that he/she earns better and thus he/she can spend more. Thus, chart 7, shows that 100% of respondents think it is all because of the salary they earn and the habit of spending exist. This part of my research is under serious doubt because in the recent past lot of employers decided to spend less on salary increment and the basic premise of assumption won’t hold true. However, knowing the maturity around this assumption has gone up and even though the situation of earning has gone stable. In chart 10 – ITP’s behaviour seems like a quick-buyer/ consumer cum a lazy one who is least bothered about the pricing of goods or services. He needs the services at the doorstep just to save his time and that population appears to be very high as 98% of respondents agree/ strongly agree to this. Now this behaviour itself becomes a reason for any service or goods provider to increase the price of their services/goods. As a cascade effect of this propensity, demands the rest of the other consumers (non-IT ones) to pay that extra charges each time.

When the responses around question 11 were analyzed, it can bee is seen that a significant number of respondents (74%) think that they disturb the overall spending of others. This is the core argument of this article to establish empirical data.

It may be argued further that there are many other factors that directly or indirectly impacts the overall spending pattern of the society and those could be independent of ITP’s and purely circumstantial and/or driven by major macro-economic factors. I completely understand that and it is not critical to that point of view, however, in most micro-level of economic spending’s done by ITP / individuals have a large impact on others. In this sample size of 500 respondents, most of them were staying in the outskirts of the city just to avoid the excessive cost of living, though they are part of the IT workforce. So, this impact of ITP is not a recent one but proliferated over the period since the inception of the IT world in a city like Pune and mostly in all such cities. The very behaviour at the beginning of getting extra money and easy money for efforts spent in plush AC office, frequent onsite assignments (thus, extra money) and easy work-life balancing options made most ITP’s (all early to mid-time entrants) vulnerable to their spending and they did start spending wherever they can. This behaviour flourished exponentially in every growth financial year for the industry and effectively for ITP’s. In every passing growth year, this behaviour has started maturing and thus in the minds of service providers/ vendors. It also includes services like Taxi/ Auto/ Plumbers and many more of that nature.

In recent times all Macro-economic factors, the industrial slow down, mere profit-oriented behaviour of industry investors/employers have been impacting earning capacity of ITP’s and other salaried people. Though it has reduced for some, it has given rise to AI/ML and other automation centric skills that have given highly optimistic hope of increasing it again. Service charges have already increased, and it will be increasing with artificial demand and assumption-based pricing decided by all the members. Its direct impact is on the spending culture of society right from the beginning of ITP until today and this has happened mainly due to ITP’s very unknown to known (and vice-versa) interference in socio-economic fabric and less societal orientation. These interferences were always there because of their ‘capacity to possibility’ of earning easy money and the overall nature of the job they do along with its impersonation on their personalities.

Conclusion: 

With my limited reach to all my respondents in the last 8+ years, very close observation and overall spending behaviour shown by most of them strongly establish my argument on ITNomics. It is evident that IT professional with less sense of societal ownership behaves very conspicuously and this may not be limited to only an ITP but even to other quick but easy earners from the millennial generation. 

Spender has done enough damage through his/her spending habit though it has added in economic activity which has taken place in rapid time. I am not an economist to understand it holistically and call out the benefits of these spending’s which are not compatible with the large set of the population. Has it created more Urban Poor - who knows in totality? I may request or welcome any view or counterview on this paper - from readers who are economists by profession, however, I strongly re-emphasize the core findings of it. One can’t deny the fact that there is an incredible increase in this behaviour from the proliferation of consumer (e.g., mall) culture & consumer economy. An additional aspect of this spending behaviour that caused more disruption is digital spread. There is no dearth of option to provide you benefits (actually benefit – is just an illusion) by giving a plethora of discounts online and let you purchase, and this form of spending caused another level of damage (one-sided view) to the normal public who don’t use online platform for any purchase. The topic of digital markets is huge, and it has many positives & dimensions to study, however, it has impacted the core theme of this article as well. Its benefit has been written & documented many times and through many ways, by many market researchers.

The need of the hour is to put some regulatory measure – through whatever form or means to curb this excessive consumption (though good for the economy & destructive for the planet – reference from web documentary by David Attenborough) but derogatory and destructive for the welfare of large section of the cities. They are creating Urban Poor (read about it through open sources on the web) as a class that is increasing day by day and may impact the overall economy in long term. Do you think this observation along with empirical data-driven finding on spending’s of ITP’s / other fast earning / parent sponsored millennials makes sense to you – may be partially / fully or not at all…???

Will come back with corollary research responses to this one – off-course, if needed and if I get hold of all possible resources. Till then happy reading and happy to receive your observations – if any!

This piece of writing is developed by the author, basis multiple levels of observations, in-person sessions and all the structured interviews conducted. Various infographics used here are the direct outcome of empirical research and pictures used in the article had been downloaded from open source. To understand the findings in detail & draw any parallel out of it– please reach out @ [email protected] / 9096000654.