I think you are overestimating how bad the "global economic crisis" is. Besides, computers are vital to many companies--they're not an expendable "luxury."
I also don’t understand people on a tech forum not being more sympathetic about the economy’s troubles. Is tech not in a recession? That’s ludicrous. Tech is in a bad way.
This global recession will be ruthless. I'm hearing of mass lay-offs even outside of tech now. I suspect people in the tech industry can expect to stay out of work for 6+ months.
The US for example is in a predicament economically with no clear way out, other than a hard recession. And that's without mentioning the energy crisis still to hit there and the food crisis that is slowly unfolding.
Yes, the financial crisis was real. It had a huge impact. Put that many people out of work, and GDP/capita drops.
Doesn't change the fact that there is continuing to be a huge amount of technological progress in a lot of different fields. Not just, as you seem to believe, one narrow area of technology.
It might be overdue. Tech came out of the 2008 recession pretty well in the mean (of course some people suffered badly). A lot of companies came out of it saying to cut costs they had to invest big in their technology.
People tend to overestimate what can happen in a year, but underestimate what can happen in a decade....
That said -
* Current economic recoveries are too top-heavy and debt-focused; businesses and investors are taking for themselves without giving back enough to the workers to provide customers and make recovery sustainable. Real terms wages aren't recovering, household debt is rising. I don't see a track record of that sort of thing correcting naturally, so I'd suggest it'll be a brake on recovery through 2014 and possibly push one or more major economies back into recession.
* Apple's iOS market - the cash cow supporting the whole business - continues to decline. iOS lost market share leadership on phones (aside - one of these days we'll start calling them tablets too, accident of history that they're called phones now) some years ago, and by some measures has recently lost it on tablets too. I see no practical way back for a single company releasing 2-3 devices a year against an ecosystem releasing hundreds. Stocks will continue to decline, I doubt they'll be more than a niche player in 5 years time. (Links - https://news.ycombinator.com/item?id=4431730, https://news.ycombinator.com/item?id=3076576)
* Mark Zuckerberg has a track record for spotting the Next Big Thing, if possibly also for overpaying for it. Facebook.com will continue its move towards being a social hub for varied sources rather than just a single entity, while stories continue dismissing its relevance. Facebook, Inc. will continue growing through this expanding footprint, whatever the core property's traffic does.
* I hope I'm wrong, but China seems to have been spoiling for a fight in various ways for some time. From its currency manipulation used to build up a balance of payment surplus which is then used to buy up real assets overseas, to its territorial stances - Taiwan, South China Sea, Senkaku / Diaoyu.... I suspect much of this is pre-emptive distraction from the fact that it needs to keep the economy growing at 7% annually to sustain their young population (and suggestions that they've been cooking the books to cover failures in this), but.... Too big a power, too much sabre rattling, too much nationalism being invoked. North Korea is clearly far from stable, Japan has a leader who wishes to paper over much of the 1931-1945 period. My hope is for China to collapse in on itself as with the former USSR; I'm not confident that we won't see war in that region in the next few years.
* Speaking of authoritarian regimes trying to use mineral wealth to paper over internal cracks and rattle sabres, Russia seems a matter of concern. Sochi 2014 is a pure vanity project; hosting a Winter Sports festival in a summer resort that's very near a region with a recent history of violent political instability (witness the recent bombings in Volgograd), building facilities in somewhat geologically unstable areas that then collapse and require rebuilding, large-scale corruption... I would be very surprised if the Sochi games go without interruption and I sincerely hope that they can prove the start of Russia freeing itself from Putin.
i think a lot of <traditional> companies will not stand this storm. the biggest factor in the "financial crisis" that has been underlooked is the death of the traditional media. we are amidst a huge culture switch from from newpaper to feedreader, from retail stores to estores, from calling your broker to etrading. there is a lot of industry that is built around the old model of storefronts that simply can not sustain and compete with a spaceless model.
as far as the tech industry goes, i think the desktop makers <and desktop chip makers> and the smaller web startups that don't bring in any cash are screwed.
while there will always be a need for desktop computers and server grade hardware, people are now more interested in buying mobile computers. most people only check their email and visit a few other webpages (youtube, facebook, etc.), and this need can be fulfilled from anywhere with a small handheld computer (iphone, g1, blackberries) and a mobile internet connection.
the small web startups are in trouble because not only do they are not bring in any cash, it will be harder for them to get cash from VCs. i'm sure some will weather the storm, but i can also see a lot of them not being able to do so.
I’m assuming you aren’t in the US. Well I am in the US and if I lost my job in the current climate, I think I would have a hard time trying to find a job. I’ve never felt that way before - not in 2000 or 2008-2010. So your friends are far from unique. The entire global economy is screwed.
Assuming you’re trying to start a lifestyle software business, your startup costs should be cheap thanks to cloud providers or just using something like VMs.
Many of these rich are running businesses which employed poorer salaried people like us. Not saving us directly in 2008 is ok as back them we are minority. Not saving these businesses will trigger a Lehman Brothers contagion collapse which means a lot of people like us will be out of job...meaning a lot of us have to restart our careers like 2008. Furthermore, these time it will impact higher paying jobs in techs. The lost of 1 tech worker can easily destroy 5 to 10 walmart workers level jobs. They buy less gadgets, groceries and vacations which poorer people seldom do as much as these tech workers (I have yet seeing walmart "associate" buying tesla but seen more than 200+ tech workers own one at least in the last 10 years. Guess what will happen after the collapse? China will take over. These lost tech workers will work remotely for others divulging tons of IP knowledge (I know this full well because this is essentially what my 3 companies actively engage in).
Agree that it’s not the world economy and stable big tech companies wouldn’t be that impacted, but people are looking for any sign that a recession is coming.
Several unicorns going bust could be enough to kill confidence in the markets and cause people to prepare for the worst (I.e. sell investments and stop spending).
While I initially agree with you and can understand your view point based on your previous experience, I think there are two categories of tech:
-Business Value Add
-Hype / Marketing
I separate these out because we've already gone through a terrible economic downturn that is sputtering to produce jobs and yet we see an explosion of jobs in the tech sector. That's because of the value add software that is reducing the number of employees, paperwork or steps in a process a business needs in order to operate.
Those types of companies are going to be fine through another economic downturn because their clients have realized how much their saving by using the software. These value add tech businesses may see a slow down, but not a collapse.
The biggest example that is here to stay is E-Commerce. Look at how many companies / businesses are realizing how much easier / cheaper it is to go online than build a brick and mortar store with employees, rent, utilities, taxes, repairs, maintenance, etc.
Even some apps are here to stay. AirBNB, for example, is a personal value add when I'm traveling. I have no problem paying them a couple dollars to reduce my overall travel costs by 15-30%.
What will collapse almost overnight are the apps, websites, etc that are simply fluffy websites, marketing materials, or buggy unusable software.
My thought is stick with the people helping other people make or save money, and you'll be safe through the next one.
I'm not an economist, so I'm looking out for an informed opinion on this. What are you basing this on?
I either see the dismissive takes or the doomsayer comments but it all just seems like speculation. I'm not sure if we're in a genuine period of tech decline or it's just overblown companies trimming the fat.
It's really hard to gauge how the crisis is affecting tech. On the one hand there will obviously be a general recession, but on the other hand tech as a portion of the economy should grow through the crisis and also afterwards.
Is it business as usual at your company? A freeze on new investments? Doors closing for good?
It's a recession, not an apocalypse. These are kind of old news:
1. Budgeting. Know exactly where your money goes and what dials you can turn.
2. It's less about skills than products and services. So it becomes a better time to be a Costco or a cobbler (which helps people save money) than to be a Tesla (which helps people spend money).
For software, my suspicion is infinite monthly SaaS subscriptions will come under more scrutiny. And it might be a bad time to run a money-bleeding self-driving car startup. But that's my only firm guess at this point.
Given the natural resource depletion caused by our economy, plus technological progress implying that we all should be working less, how is this remotely worrying? We've had strong deflation in the tech sector for over four decades, and the results have been fantastic.
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