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How Does a Poor Economy Affect Tech Innovation?
sshuber writes "It's no secret that the US and other parts of the world are currently having some economic problems. How is this affecting new technologies under development? With the large numbers of layoffs, are we seeing projects, such as things under R&D, that are being axed? Are companies playing it safe and sticking with what they know sells in lieu of pushing the envelope? Finally, how is this affecting the open source community, either positively or negatively?" A lot of open source work happens with the backing or at least the sufferance of corporations. Do laid-off tech workers contribute fewer cycles to open source projects, or more?
There's a lot of foreboding potential out there, and a lot of big numbers have been lost on the market...but the numbers just don't seem to support that poor of an economy.
Yet, at least.
Nonetheless, everyone keeps talking like the world is in the depths of a worldwide recession.
...my productivity on pretty much everything taken a huge nosedive.
Contrary to the popular belief, there indeed is no God.
In a sagging economy, people couldn't care less about new tech. The only way I could see a poor economy effecting tech innovation is if the new tech will clearly effect a cost reduction to the consumer. Without those effects, tech innovation will continue to be negatively affected by the current economic downturn.
When gas was 99c/gallon, people weren't all that interested in new fuel technology. Now with oil going up and up, I expect we'll finally start seeing some real break throughs in alternative energy research.
OSS should also benefit from a slower economy. Why pay MS 100k for MSSQL licensing when I can get postgres?
Innovation won't stop and will continue to happen. It just might be in different areas.
We're cutting back on extravagances. I'll probably wait one more year for the new computer I was supposed to get last month.
An economic downturn will kill an already unhealthy company, but a good employer with a stable balance sheet knows how to weather the storm.
It's been pointed out recently to me (at least here in Alberta, Canada), that university enrollment drops when the economy's strong, and picks up when the economy slows. There's at least a couple factors here. One, when the economy's not doing great, a university campus is a relatively secure place to be while you wait out a temporary drought. Secondly, while the economy's doing good, it's generally easy to get a well-paying job, which presents a stronger competition vs the academic route. On that note, the economy's looking pretty rosy up here right now, so we're definitely looking for potential students at the University of Alberta's Computing Science department!
"You know, Hobbes, some days even my lucky rocketship underpants don't help" -- Calvin
My employer let go of 90% of the future projects staff, which equated to 75-90 people. No VoiP, or WiFi in the near future, PC/Laptop refreshes were put on hold, server refresh abandoned, the plan to change the entire server OS on file/print servers from 2000 to 2003 was abandoned...and some other stuff that I can't remember.
I would expect at least some laid off workers to do some open source work just to keep their skillset current.
Have there really been large numbers of layoffs in the tech industries? I thought many tech companies, particularly those with large overseas businesses, were doing pretty well. See IBM for example.
This whole question reeks of someone wanting the Slashdot community to do their research for them, starting with some pretty questionable assumptions. Maybe the answer to this question is better served by looking at how past recessions hit the tech industry and their innovation output.
We're having economic troubles because people are dumb - not because something has actually happened.
"oh woe is me, the housing market is collapsing!" no its not. Now's a great time to buy. In fact this is really the sort of situation that benefits people in their mid-late 20s. Real Estate values were inflated before. Now those people can more easily afford to buy houses.
now, back on topic... if there is any sort of actual shift taking place, it is not likely to be the big corps that want to try and ring every last drop out of "business as usual" who will benefit.
If people perceive times to be tough and getting worse, with regards to the environment, energy "crisis," etc - then the people who can move in and offer solutions to those problems are going to win. They're going to attract the money from the people that have it to get the stuff to market.
I'd like to think that in the next 5-10 years we're going to see a lot more people interested in home power generation -- solar and/or wind, appliances that use less power, etc.
We're also going to see people and companies wanting solutions which provide maximum advantage for minimum cost. That means we'll see a lot more open, standards-based solutions to problems. We're likely to see more foss solutions to software problems, open hardware solutions to hardware problems, etc.
Likewise, if programmers are now no longer employed by megacorp a, they'll likely have a few more hours a day to contribute to foss projects -- or start smaller ventures based on foss solutions to some of the more pressing problems of our day, and into the future.
or maybe i'm just high
So what you're saying is, either it will effect tech or it won't? You must be an economist.
The first thing you want to do when you're belt tightening is cut jobs; employees are huge overhead. But how do you cut jobs when the work still has to be done?
Answer? Automation. If you can't automate, you'll outsource, and outsourcing itself often requires new technology.
When the bubble popped, a lot of tech people took it in the shorts, and since that's the last big economic wobble, it's the one everyone is thinking about. But in reality there is no guarantee that a downturn will be bad for tech, or tech industries...It depends on what sectors experience the lowest growth. (Sadly, I do economics too.)
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
What large numbers of layoffs?
Don't piss off The Angry Economist
I did a lot more, last time I was unemployed.
Partly it's because you can put, "Programmer for (insert OSS project here)" as your current occupation, rather than "sitting on the couch, watching the phone" and partly because the best way to put food on the table is to do some work, and the easiest sort of work to get is freelance work.
When you're freelance, you can't afford the licensing for the nice proprietary stuff. You can't afford to scratch build huge webapps. You absolutely have to jump on the OSS bandwagon, just because it's what you can afford.
And when the OSS app you're deploying turns out to lack some feature that's critical to your sale...You code it. Or you jump on the lists, and beg someone else to code it. Or you incorporate some other OSS project to provide that functionality, etc.
I made more when I was out of work than I do now, but I didn't get to post on Slashdot as much. It's all about how you decide to spend that time.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
I work at a small software shop, and we write custom software.
I've noticed a shift in our clients' thinking. New projects have to save the company money overall and more requests to include OSS libraries and products.
Personally for me, I like the fact we're including more OSS products (MySQL, Postgres, Linux, *BSD, etc...). When I first started, I was a little out of place due to the fact I had spent so much time working with open source. Now that experience is useful to my company.
But overall new software work really needs to have an immediate cost savings. For example, a client came back after a year. The client is a non-profit, we developed a system to allow them to keep track of their membership and invoicing. Most of the membership management is being shifted to the web. A year before, it cost too much and they didn't see any benefit.
Now they realize they save on things like stamps, maybe hold off on hiring a part-time person to process mailed in renewal notices. Plus they'll have a better system for calculating how much money they got.
The term "poor economy" can be, and has in the past been, a self fulfilling prophecy.
If the population believes the economy is poor, and they behave as though the economy is poor, then the economy, regardless of its actual state, will, by the actions of the brainwashed masses, begin to behave as though it were poor.
That appears to be exactly what is happening here.
I work for a company that is 100% open source based, and markets itself as everything open source to whatever needs our clients need. Usually this is either web presences, or local sysadmin work for businesses, schools, or non-profits. Anyway, this came up at our last monthly meeting, someone asked the CEO what he thought a downturned economy would mean, and the summed up answer was, it'll be good for business because more commercial companies and even non-profits are contacting us for products and services in order to streamline and save a buck here and there. He said that growth figures for this year should actually be up from previous years. So it all depends really.
The barristas-turned-perl-coders go back to making coffee, graduate students go back to graduate school, product cycles get longer so people have time to actually think, and investors stop throwing money at every stupid idea and actually start rewarding innovation.
A bad economy is when innovation happens.
Wow, they got you to sell way early then, failing to capitalize on a lot of appreciation. Alas. It does take a genius to have recognized a housing bubble -- you know, pretty much everyone did, but then it's just a matter of knowing when it's going to pop. Pop!
They must have been drunk. Now maybe they really said that people were overextended and any rise in interest rates would threaten their buying power, reducing the prospective pool of buyers within upper purchase brackets...but that interest rates were too low? They wouldn't have said something dumb like that.
Ignoring the Bill Gates thing, because you seem to have simply made that up (him being a rich guy and all...having been involved with Microsoft makes him an economics guru, right?), given that Gates has never been a financial prognosticator, and ignoring the interest rates are too low nonsense that reappears once again -- you do realize that Buffet makes his billions by *not* telling you what he's doing, right? That is his whole strategy, of trying to be ahead of the curve.
What's with people trying to politicize this? There are a lot of people gathering statistics and calculating the numbers, and many of them have an agenda to bring you bad news (that is their bread and butter). This continued insistence that it's all a Bush administration dupe is just bizarre.