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My big question is how can software--particularly free software--create jobs? Take operating systems. With free alternatives the trend is towards commoditizatio

by reedlaw 12y ago

My big question is how can software--particularly free software--create jobs? Take operating systems. With free alternatives the trend is towards commoditization and declining prices. Same goes for almost any category of desktop software. The only potentially increasing trend is in service, customization, etc.--all geared towards business productivity. Increased productivity may or may not result in net employment gain. In fact, for every programming job there may be manual jobs becoming obsolete. So what can sustain high hourly rates and create new jobs? One part of the answer must be increased specialization, but not everyone can become a specialist.

FranOntanaya 12y ago
Free software allows new businesses to enter markets with a lower upfront investment than old ones, hence creating jobs (including jobs related to using that free software.) Now, are they just siphoning profits (and wages) from the older businesses in order to create these jobs? In my opinion, it's more the case that the older business had a high price initially to offset their upfront software costs, and by the time sufficient free software appears they are just riding it without having ever had to distinguish themselves as the 'premium' option, even though it's a fact they aren't even trying to develop to the non-premium market with lower prices. So the new folks come, they have lower prices, and a lot of people that would have never used that service start using it. And unless the older businesses fail to justify their premiums, this should grow the market enough to preserve high wages. Eventually the new business will (should) develop their own in-house solutions beyond the free software, and you'll have the cycle repeat itself.
ams6110 12y ago
Same way as any other business that takes a "free" or very cheap raw product and adds value by transforming it for a particular use. Iron ore is "free" you just have to go dig it up. How can steel companies create jobs?
- reedlaw 12y ago
  With iron there is scarcity and extraction costs. Free software displaces proprietary software which benefits just about everyone except the proprietary software companies.
BraveNewCurency 12y ago
> how can software--particularly free software--create jobs? Ok, let's take Linux as a specific example. Take a gander at this: http://lwn.net/Articles/547073/ http://lwn.net/Articles/547073/ So major companies (Oracle, Red Hat, Google, IBM, Intel, Samsung, Fujitsu, Texas Instruments, etc) are contributing to Linux. That creates jobs for all the kernel hackers who probably started before kernel knowledge was a hot commodity. But that effect is minor compared to what people are building WITH Linux: - Red Hat (a 1B company!) wouldn't even exist if it weren't for Linux. They don't "sell Linux", they sell services around Linux. - IBM invested a billion dollars in Linux, and it paid off. They recently decided to invest another billion. Their support for Linux sells Mainframes and their expertise sells services. - Google wouldn't be able to give away their search engine (over 10 million servers) if they had to pay Microsoft for every server. - Companies like TI and Intel can add Linux support for their chips (a tiny expense compared to creating a new CPU), which will enable new devices to be created easily. Some of those new devices (TiVo, Android, Tomato WRT, RPi) will be successful and cause their companies to hire more people. Giving away software doesn't compete with programmers -- it only competes with companies that sell software. Only a tiny fraction (maybe 5%?) of programmers work for companies that sell software directly. The vast majority of programmers write internal line-of-business software, or sell their software indirectly (SaaS). So any Open Source software (Drupal, Apache, etc) is far more likely to help lots of companies save money (therefore have money left over to create jobs). > In fact, for every programming job there may be manual jobs becoming obsolete. That will make programming jobs be more "in demand" compared to regular jobs, therefore command higher salaries. > So what can sustain high hourly rates and create new jobs? You are thinking about it from the wrong end. The question is "can a bit of software be worth millions/billions to a company?" The answer is clearly "yes", since we've seen tiny teams create billions in value over and over. Search around for the writings of patio11 on HN. He will open your eyes. People charging $200/hr are playing a different ball game than people charging $20/hr. They are not 10x better, just better at demonstrating the value of their software to the client. > not everyone can become a specialist. Just the opposite. There are so many new technologies and branches of science coming out that everyone will be a specialist in the future. In fact, programmers are already highly specialized. No matter what technology you pick (COBOL, Java, .NET, Linux, Microsoft, nodejs, Ruby, Python), you will find that some subset of programmers will refuse to work on it because they refuse to learn it.

by reedlaw 12y ago

FranOntanaya 12y ago

Free software allows new businesses to enter markets with a lower upfront investment than old ones, hence creating jobs (including jobs related to using that free software.) Now, are they just siphoning profits (and wages) from the older businesses in order to create these jobs? In my opinion, it's more the case that the older business had a high price initially to offset their upfront software costs, and by the time sufficient free software appears they are just riding it without having ever had to distinguish themselves as the 'premium' option, even though it's a fact they aren't even trying to develop to the non-premium market with lower prices. So the new folks come, they have lower prices, and a lot of people that would have never used that service start using it. And unless the older businesses fail to justify their premiums, this should grow the market enough to preserve high wages. Eventually the new business will (should) develop their own in-house solutions beyond the free software, and you'll have the cycle repeat itself.

ams6110 12y ago

Same way as any other business that takes a "free" or very cheap raw product and adds value by transforming it for a particular use. Iron ore is "free" you just have to go dig it up. How can steel companies create jobs?

reedlaw 12y ago
With iron there is scarcity and extraction costs. Free software displaces proprietary software which benefits just about everyone except the proprietary software companies.

BraveNewCurency 12y ago

> how can software--particularly free software--create jobs? Ok, let's take Linux as a specific example. Take a gander at this: http://lwn.net/Articles/547073/ http://lwn.net/Articles/547073/ So major companies (Oracle, Red Hat, Google, IBM, Intel, Samsung, Fujitsu, Texas Instruments, etc) are contributing to Linux. That creates jobs for all the kernel hackers who probably started before kernel knowledge was a hot commodity. But that effect is minor compared to what people are building WITH Linux: - Red Hat (a 1B company!) wouldn't even exist if it weren't for Linux. They don't "sell Linux", they sell services around Linux. - IBM invested a billion dollars in Linux, and it paid off. They recently decided to invest another billion. Their support for Linux sells Mainframes and their expertise sells services. - Google wouldn't be able to give away their search engine (over 10 million servers) if they had to pay Microsoft for every server. - Companies like TI and Intel can add Linux support for their chips (a tiny expense compared to creating a new CPU), which will enable new devices to be created easily. Some of those new devices (TiVo, Android, Tomato WRT, RPi) will be successful and cause their companies to hire more people. Giving away software doesn't compete with programmers -- it only competes with companies that sell software. Only a tiny fraction (maybe 5%?) of programmers work for companies that sell software directly. The vast majority of programmers write internal line-of-business software, or sell their software indirectly (SaaS). So any Open Source software (Drupal, Apache, etc) is far more likely to help lots of companies save money (therefore have money left over to create jobs). > In fact, for every programming job there may be manual jobs becoming obsolete. That will make programming jobs be more "in demand" compared to regular jobs, therefore command higher salaries. > So what can sustain high hourly rates and create new jobs? You are thinking about it from the wrong end. The question is "can a bit of software be worth millions/billions to a company?" The answer is clearly "yes", since we've seen tiny teams create billions in value over and over. Search around for the writings of patio11 on HN. He will open your eyes. People charging $200/hr are playing a different ball game than people charging $20/hr. They are not 10x better, just better at demonstrating the value of their software to the client. > not everyone can become a specialist. Just the opposite. There are so many new technologies and branches of science coming out that everyone will be a specialist in the future. In fact, programmers are already highly specialized. No matter what technology you pick (COBOL, Java, .NET, Linux, Microsoft, nodejs, Ruby, Python), you will find that some subset of programmers will refuse to work on it because they refuse to learn it.