Desolation Row — The Stagnation of IT Spending

Andrew McAfee has an interesting blog post on David Autor’s Jackson Hole Conference analysis of IT spending.  What it shows, I think, is the downward pressure on software pricing that is now driving the market.  This is a trend that those of us in the business are experiencing across the board.  The only disappointing aspects of the charts is that they are measures of private investment in IT and don’t address public expenditures.  Given frozen budgets and austerity it would be interesting to see if the same trend holds true on the public end, which I suspect may show a more dramatic level of under-investment in technology.  While I mostly agree with McAfee over Autor’s concerns, I believe that the factors related to technical stagnation that I raised in last week’s post are reinforced by the charts.  There seems to be some technological retrenchment going on that is solely focused on reducing overhead of existing capabilities to appease financial types.  This is reflected in record profits during a time of stagnant employment and employee incomes.  I think that the only hope for investment in technological innovation is going to have to come from the public sector, but the politics still seem to be aligned against it for some time to come.  Perhaps if we subjected financial managers, lawyers, doctors, pharmaceutical companies, entertainment, and insurance companies to the same kind of international competition that manufacturing and technology have been exposed to though “free-trade” agreements and the abandonment of patent monopolies, then perhaps we could have the equivalent of “affording” projects similar to the moon program and ARPANET again.

2 thoughts on “Desolation Row — The Stagnation of IT Spending

  1. If you want to understand the priorities of the federal government, consider Afghanistan. Depending on whose estimates you think are credible, the Pentagon spends $50 to $100 million dollars per dead Taliban “soldier.” It would be cheaper to send them all to medical school than it is to kill 5% of them each year.

    If you want to understand the priorities of the state governments, consider Texas. Governor Perry has dispatched the Texas National Guard to the border to watch poor people walk by, since they don’t have the authority to detain or question those that they suspect of illegally crossing the border. Perry is trying to divert $38 million in public safety funds earmarked for emergency radio infrastructure to pay for the exercise. In the meantime, there are reports that some of the Guardsmen have turned to food banks, since they’ve lost their civilian paychecks and Texas hasn’t paid them yet.

    I don’t think we should anticipate a great deal of support for technological innovation from the public sector.

    Like

  2. Nick. I¹m including the references here in the current PARCA research on connecting SE and EV. I have lots of papers some from your references. let¹s sit an IPMC and see if we have any others we can drum up. Tm and I are writing a paper on ³connecting the dots,² and will include your materials in our reference section and restate some of the topics below.

    Glen B. Alleman Niwot Ridge LLC glen.alleman@niwotridge.com Defense | Space | Energy | BioPharma | Enterprise IT Performance-Based Project Management®

    From: Form Follows Function Reply-To: “Life, Project Management, and Everything” Date: Thursday, September 4, 2014 at 7:17 AM To: Glen Alleman Subject: [New post] Desolation Row ‹ The Stagnation of IT Spending

    WordPress.com Nick Pisano posted: “Andrew McAfee has an interesting blog post on David Autor’s Jackson Hole Conference analysis of IT spending. What it shows, I think, is the downward pressure on software pricing that is now driving the market. This is a trend that those of us in the bus”

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s