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https://doi.org/10.22214/ijraset.2022.47487
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Abstract: The major effect of the COVID-19 pandemic and ongoing conflicts, including in Ukraine, has had a negative impact
on the lives of ordinary people, notably in developing countries, with rocketing commodity and energy prices and interruptions in
worldwide logistics related supply chains. As a result, it affected the US economy and plunged it into recession. This paper
investigates the effects of the US recession on the Indian IT industry and e-commerce business. Also, this paper deals with the
current scenario of the Indian IT Industry.
Keywords: Recession, Depression, IT Industry, E-commerce business, economy, subprime mortgage and Speculation.
I. INTRODUCTION
Global frugality has been affected by the "US recession" or the downturn in the US request, to varying degrees. The world's
profitable influence has changed, and its goods may be seen in the fact that stock requests are down, employment vacuity is down,
and businesses are latterly dwindling their being pool and reducing benefits and pay envelope adaptations. The U.S. subprime
mortgage extremity of August 2007 is the cause of the current global fiscal extremity. The so-called "decoupling phenomena,"
which asserted that underdeveloped countries wouldn't be impacted, has not materialized, despite the first print that it'll solely affect
rich countries. Rather, as shown by the following criteria, the extremity has spread to a worldwide scale. India is a growing nation,
and the impacts of the recession are still being felt moment. E-Business is a revolution that's reshaping businesses encyclopedically
and having an effect across all diligence. E-business is vastly further than just setting up a commercial website or having IT staff
purchase and execute computer software online. It has an impact on the entire company and the supply chain within which it works,
enabling members of the value chain to unite at a far more advanced level of integration than previously possible. Employing e-
business also enables businesses to cut charges and enhance customer response times. Organizations that change their business
operations stand to gain greatly from the numerous new openings made possible by technology. The study first focuses on the
delineations of abecedarian terms.
A. US Recession
In accordance with the brief overview — two sequential diggings of negative GDP — the United States will enter a recession in the
summer of 2022. Later contracting 1.9% in the first three months of 2022, the frugality contracted 0.9% in the alternate quarter,
fitting the standard description of a recession as at least two successive diggings of negative growth.
The National Bureau of Economic Research's (NBER) Business Cycle Dating Committee, which tracks recessions, defines a
recession as "a severe drop in profitable exertion that's dispersed all across frugality and lasts for many months." The commission
generally monitors employment, colorful types of real consumer expenditure, real particular income minus government transfers,
and artificial product. especially, although the commission does punctuate that in recent decades, they've given further weight to real
particular income, smaller transfers, and payroll employment, there are no set norms or thresholds that beget a decision of decline.
In the United States, a recession is defined as "a significant decline in profitable exertion spread across the request, lasting further
than many months, typically visible in real GDP, real income, employment, artificial product, and noncommercial- retail deals".
A subprime mortgage is one that is given to people who have poor, incomplete, or non-existent credit histories. Subprime mortgages
typically charge higher interest rates than standard (prime) mortgages because the borrower poses a higher risk to the lender.
A recession is a severe and long-lasting decline in economic activity. A recession is typically defined in economics as an extreme
recession lasting more than three years or an extreme recession in which real gross domestic product (GDP) falls by at least 10% in
a given year. Recessions are more common than mild recessions, and they are typically accompanied by high unemployment and
low inflation.
E-business (electronic business) refers to the processing of online marketing processes via the World Wide Web, the Internet,
extranets, or a combination of these.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 994
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Buying and selling products and services; dealing with customers; business framework; managing the production and supply chains;
collaborating with business partners; exchanging information; and automation are examples of customer-oriented, internal-oriented,
and management-oriented business processes including the operation of the employee services provided and employee recruitment.
B. Types of Ecommerce
1) B2C (Business To Consumer)
B2C retailers produce directly for customers. Everything that a consumer buys from an online marketplace, from apparel and
household goods to entertainment, is considered a B2C transaction. B2C purchases often have a narrower decision-making process
than B2B purchases, especially for low-value products.
B2C companies typically spend less on marketing to sell, have significantly lower order values, and very few repeat orders than
B2B companies due to their shorter sales cycle. Service and product marketing are both included in B2C marketing. By leveraging
technologies such as mobile apps, native advertising, and contextual advertising, B2C innovators deliver offerings directly to
customers and thereby make their lives easier.
2) B2B (B2B)
In the B2B business strategy, a firm sells its goods or services to another company. In some cases, the buyer may be the final
consumer, but in most cases, the purchaser turns around and sells to the consumer. B2B sales have a longer cycle time but higher
cognitive values and higher repurchase intentions.
His most recent B2B innovator has found a niche by replacing webstores and order sheets with e-commerce shopfronts and trying to
improve niche market scapegoating. By 2021, 60% of B2B buyers will be millennials, nearly double the number in 2012. As the
youth of today enters the age of commerce, his B2B sales online have become extremely relevant.
3) B2B2C (Business-To-Business-To-Consumer)
B2B2C stands for Business-to-Business-to-Consumer. It refers to a business strategy in which a company collaborates with another
organization to sell its product or service to an end customer.
In contrast to when a company white describes as a product in order to present it as its own, the finished consumer knows that they
are actually buying a goods while using a service from the original manufacturer.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 995
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 996
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Most firms assume the economy is rebounding before employing full-time personnel. Throughout the history of the United States,
there have been 19 notable recessions.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 997
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
1970
From December 1969 to November 1970, the recession was modest, lasting 11 months. The unemployment rate reached 6.1% in
December 1970. The economy declined 1.9% in the fourth quarter of 1969 and 0.6% in the first quarter of 1970. GDP increased by
0.6% in the second quarter of 1970, 3.7% in the third, and 4.2% in the fourth.
1973-75
The country underwent a 16-month recession from November 1973 to March 1975. The oil embargo imposed by OPEC has been
credited for doubling oil prices, but Richard Nixon's actions throughout his administration also led to the downturn.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 998
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Each recession has its own set of causes and consequences. Growing economies are more likely to experience a business cycle
downturn. However, other factors can cause recessions, many of which are neither predictable nor avoidable. Here are three of the
most common causes of recessions.
1) Oversupply: In a prosperous economy, businesses seek to expand output to match customer demand. An overabundance of
products and services that are not used produces an economic slump when demand peaks and begins to decrease, forcing
enterprises to produce less and shrink in size, while individuals lose buying power and consumption falls. continue.
2) Uncertainty: Uncertainty about how the economy will evolve increases the risk of company choices. Both war and pandemics
wreak havoc on the economy by making short-, medium-, and long-term consumption trends unpredictable. Economic activity
suffers when firms and consumers hesitate from making spending and investment choices.
3) Speculation: Economic bubbles arise when the price of something unexpectedly surges owing to speculation, market
fluctuations, or consumer optimism. Investors are piling in, hoping to profit from a price boost. However, when they begin
selling it, supply exceeds demand (leading in fewer new purchasers), prices fall, and the bubble collapses. This happened with
Tulips in the 17th century and in the 2008 property market.
The longer the recession lasts, the more difficult it will be to reverse the effects of reduced consumption, investment, goods and
services, and unemployment. It also increases the likelihood of an economic downturn. This is the next difficult period for the
economy.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 999
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Nomura has not changed its skepticism of the industry. It stated that there will likely be less money available for IT spending as a
result of slower revenue growth and increasing inflation.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 1000
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
Large organizations, on the other hand, have more choices for countering sales and profit decreases during a recession than small
enterprises.
When everything else fails, they can reduce positions, stop hiring, postpone pay increases, and resort to layoffs to cut expenses. You
may reduce spending, limit R&D, and even halt new product launches. Such layoffs at major corporations can affect a significant
number of employees and vendors.
VII. CONCLUSIONS
Economic slowdown in the United States and potential recession in other countries such as the United Kingdom, Australia, New
Zealand, Taiwan, and the Philippines will have a small but significant impact on the Indian economy. The impact will be felt more
acutely in the information technology (IT) industry, which generates 40% to 78% of its revenue from offshore clients. According to
JPMorgan's tech team report, software companies in the United States are expected to reduce their budgets by 5%-6% in nominal
terms due to inflationary pressure. Contracts with Indian IT firms such as Tata Consultancy Services (TCS), Infosys, Wipro, and
Tech Mahindra, which get more than half of their international business from the US, will suffer as a result. The startup ecosystem
has also taken a hit. News of the U.S. recession and volatile financial markets saw seed funding drop about 33% from $10.3 billion
in the first quarter to $6.9 billion in the second quarter, according to Tracxn Technologies. Indian IT industry faces many
challenges. On the one hand, costs are increasing due to the cost of hiring and maintaining IT staff. At the same time, rising
commodity and energy prices are driving up operating costs, coping with lower demand as businesses scale back their discretionary
IT spending.
©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 1001
International Journal for Research in Applied Science & Engineering Technology (IJRASET)
ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538
Volume 10 Issue XI Nov 2022- Available at www.ijraset.com
According to Statista Digital Market Outlook, e-commerce revenues are expected to fall for the first time in history. The largest
single weakening factor is supply chain issues, with inflation also playing a significant role in the downward revision. The widely
anticipated US recession and subsequent increases in unemployment present significant challenges for the e-commerce sector.
REFERENCES
[1] Nidhi Arora Kumar (2011), “Impact of Global Recession on Indian IT Industry and Effectiveness of E-Business in the Era of Recession”, Global Journal of
Business Management and Information Technology, Volume 1, Number 1 (2011), pp. 9-25 © Research India Publications http://www.ripublication.com
[2] Prof. S.T. Bhosale (2011), “IT Services in India: Present Scenario”, ResearchGate, Volume 1, Issue VI, pp. 1-4
https://www.researchgate.net/publication/260982561
[3] Sher Verick, Iyanatul Islam (2010), “The Great Recession of 2008-2009: Causes, Consequences and Policy Responses”, IZA DP No. 4934
[4] Dean Baker (2006), “Recession Looms for the U.S. Economy in 2007”, CENTER FOR ECONOMIC AND POLICY RESEARCH
[5] Mangal Sain, Aditi Mittal (2013), “Impact of recession on India”, Academia, Vol. 01 Issue-04
[6] David C. Wheelock (2011), “Banking Industry Consolidation and Market Structure: Impact of the Financial Crisis and Recession”, Federal Reserve Bank of St.
Louis, 93(6), pp.419-38.
[7] Dr.P.S. Kamble and Mr.Sandeep Krishnat Raval (2011), “Global Recession and its impact on Indian Economy”, Indian Streams Research Journal, Vol-I, Issue-
VII
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