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Software Automation a Jobs Killer?! Not So Fast… New Research Says Otherwise

An undying refrain has been that automation is a job killer, and that it will continue to displace workers, leaving many with no hope of employment. But is that entirely true?

It is widely accepted that automation is indeed a virtual force multiplier, allowing businesses to accomplish significantly more with leaner teams. However, what is often overlooked by those echoing this pronouncement are the substantial number of jobs added to an economy, owed to this same automation, that generally exceed the numbers of positions lost. Recent research released by Software.org, The Growing $1 Trillion Economic Impact of Software, reports on the enormous contribution that software/automation has made to US GDP as an engine for economic growth. The research also highlights measures how quickly these benefits are expanding.

Software.org is an independent and nonpartisan international research organization whose goal is to help policymakers and the broader public better understand the impact that software has on our lives, our economy, and our society.

Among the findings in the study, carried out by the Economist Intelligence Unit, were that software development contributed $1.14 trillion, in 2016, to the U.S. economy. This represents about an even split between direct contribution of $564.4 billion, and the remaining $575.6 billion added to the GDP through indirect and induced impact contributions. Direct contributions represent the actual wages and output levels of the software industry itself. Indirect impacts are the revenues added by jobs and output created in other sectors, attributed to opportunities owed to software. Induced impact stems from the household spending, in other areas, added as a result of direct and indirect impact growth. Combined, they accounted for an 18.7% increase in GDP, from 2014 to 2016.

The software industry, itself, employs 2.9 million workers, often at wages far outpacing those in other business lines. One glaring example of this is software developers, whose $104,360 annual salary is over twice the U.S. overall average, for all occupations, of $49,630. The indirect and induced impacts, of the software industry, account for an even more impressive 10.5 M jobs. These stats, coupled with the November 2017 unemployment rate of 4.1% (which many economists consider full employment), suggest that not only is software/automation a workforce multiplier, but also an overall jobs multiplier as opposed to the often-bad rap given as a jobs killer.

One very likely and prominent reason for the present, and seemingly unending, meteoric growth in the software sector is their enormous commitment to R&D. This study found that in 2013 (the most recent year for which numbers were available), the industry spent a combined $63.1 B on R&D. That is huge, as it represents 19.6% of total U.S. R&D investment, across all sectors, for the year. Because innovation has accounted for more than half of all economic growth since WW2, it is also vital to our continued prosperity.

Current and emerging technologies, such as cloud, 5G, machine learning (ML), artificial intelligence (AI), virtual reality (VR), augmented reality (AR), internet of things (IoT), quantum computing and more, suggest that those R&D dollars have been well-spent. It also certainly means that, for the foreseeable future, the software industry will continue to have an enormous impact on our economy.

A sobering upshot from all of this is that there will be an even greater demand for new software, which will likely exceed, by far, the number of developers available to produce it. Organizations struggle, already, to find technical personnel, with many jobs going unfilled and opportunities for these businesses missed, as a result.

Of course, none of this comes as a surprise to GeneXus’ visionary founders, Nicolas Jodal and Breogán Gonda.  They have not only been sounding the alarm for the past three decades about software’s growing domination and impact, but they’ve also worked tirelessly to create a solution for the overwhelming demand of software and shortage of folks to develop it.

Nicolas Jodal, CEO of GeneXus

The culmination of their efforts, and the dedicated GeneXus community, is the recent release of Genexus 15. This immensely powerful, yet user friendly, automated software development tool allows for the creation of applications in minutes. No need to learn exotic programming languages, as the system is intuitive and commands for creation are in natural language. It is the ideal solution for businesses who wish to foster a culture of citizen developers, who create applications for both internal operations and product support. Product managers, engineers and administrative assistants can all quickly develop and deploy programs they need to make their daily routine more efficient or their company’s product more viable.

Breogán Gondal, Chairman of the Board  GeneXus

The claim of a neophyte being able to generate an application for any of the common platforms, in any of the prevailing languages, capable of connecting to most any type of database, may strike many as outlandish and inconceivable, but it’s true. Our community, of over 130,00 existing users, stands as a testament to that. Also, when one considers that not long ago, the average Joe, who now sports a smartphone and tablet, and can navigate the web, Photoshop, craft a document in a word processing app, and more, could not even turn a PC on, it seems only logical that the next step is for these same folks to develop applications, with the same confidence and ease with which they employ other once seemingly unimaginable technologies on a daily basis.

The technology and the need (rapidly growing) for the citizen developer is here. What is lagging is the cultural shift, which calls for leadership from the most senior levels down to those in the trenches. Many are intimidated by the prospect of learning something as seemingly daunting as developing their own application, and will need some hand-holding and prodding from others who have already taken the plunge. To develop these leaders, at all levels, management should initially seek out the more ambitious and adventurous, throughout the organization, and allow them to create applications, first. Once their coworkers see how easy it is and have someone they can lean on, if needed, it will spread like wildfire.

One way to sift out those willing to take a shot by offering various incentives. Companies might consider offering bonuses for managers who develop an application to replace the clunky Excel workbook they use for monitoring accounts and activities, or to the product managers who want to add some level of support or functionality to the offering in their line, or to anyone else in an organization with a viable solution. Most businesses have no shortage of need for software solutions throughout, but rather lack the resources or the ROI justification to develop them. With cost and skill needed to develop these solutions reduced to next-to-nothing, those impediments are now gone.

With the astounding footprint of the software industry and their devotion to R&D, which promises to deliver even more unfathomable innovation (hopefully to soon include my Iron Man suit, and R2D2 and C3PO personal assistants), it is clear that businesses who not only wish to maintain a competitive edge, but also to merely survive the impending onslaught of technology must embrace a culture of citizen developers. The good news is that is that GeneXus stands ready with the tools and helpful staff, augmented by robust training offerings (if desired) and an engaged, motivated and equally supportive user community to assist with the transition.

For more information on our battle tested GeneXus 15 and its army of supporters or to request a demo, or if I can be of help in answering questions on how to implement software automation solutions to give your organization the competitive edge it needs to succeed in the future, contact me anytime. And when ready to take a test drive, sign up for our 30-day free trial here.

Wishing you the happiest of holidays,

Antonio Julio
Head of Business Development
GeneXus USA
ajulio[at]genexus.com
Twitter: @antoniojuliogx

 

 

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