But that’s across the whole economy. Individual businesses will very much behave idiosyncratically. Businesses tend to have an upside U in terms of their growth; unlike the economy as a whole, they don’t go up and to the right forever. And the economy as a whole, if you zoom out, does go up an to the right, but it is bumpy.
I guess in summary, I don’t think it makes sense to extrapolate long term trends by focusing on just the last 2 years, when the market for software engineers has cooled. After all, these cooler years followed what I can only feel were 3 or 4 years of a scalding hot market for software engineers.
However there are at least 3 tipping points in the medium term that can alter this dynamics:
- AI becoming more capable and cost-effective than human in most aspects of software engineering. This would dramatically shift the ROI calculations and tip towards AI over human.
- We reach a stage where software resources and products are abundant, they solve most of our problems, and we don't need more software anymore. Sort of like WALL-E. Obviously we don't need so many software engineers then.
- AI systems take over software systems as the backbone of our technology layer, where AI is cheaper and more capable than software. Maybe we only need 100 different AI systems instead of 100k software systems. At this stage, we are going to be replacing software with AI, so we need less software engineers.
Machines shifted things away from manual labor, but AI sifts it from intellectual labor.
If AI can make high paying workers more efficient, then the companies that leverage that efficiency to grow will outpace the companies that can't. There's no net loss of high paying workers.
The argument boils down to diminishing returns.
Honda can’t scale to producing 10,000x as many cars. What they can do is sell the cars they are already producing for less, so if some aspect of their business becomes more efficient they don’t just do more of it endlessly, they quickly cross a threshold and then spend less on it.
If you accept that AI as we know it is a tool (and not a wholesale replacement for human beings) then it will follow the same trend of any other productivity tool of expanding markets and increasing demands for labor.
That changes nothing about diminishing returns here.
Expanding into a market doesn’t dramatically increase the demand for products in that market. If Tesla started to make Hybrids they could sell more cars and employ more people, but other companies would experience fewer sales and thus cut back on staff.
Competition is great for overall productivity, but the gains aren’t magically spread evenly across the economy.
> expanding markets and increasing demands for labor.
Many industries like banking, mining, and farming have drastically cut back on labor. When the majority of those lost jobs were low skilled the productivity benefits allowed more high skilled labor to be employed. But specifically cut high skill labor and new jobs are less likely to also be high skill.
The reality is business can't really just scale their revenue by adding more profitable or positive ROI projects. There are not enough of them to go around. Eventually you hit a plateau in terms of growth and the R&D / engineering productivity can't translate into revenue anymore.