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.