A crisis in tech? Or a crisis in general?

Do we have a creeping economic crisis in general ? Or is it just a crisis in tech?

Last week I had the opportunity to talk to a few colleagues, senior managers in the tech industry, about the crisis in tech.

I'm writing this against my interest, because I should be broadcasting that ‘we live in the best of worlds’ and ‘I always have super offers for you’. That was still the case 2.5 years ago. But that is no longer the case.

The tech job market is the worst it's been since I can remember, i.e. since 2008. And this applies to all types of positions from specialist to C-level.

Maybe with one exception- the market for BD/sales positions is heating up today. As in any crisis moment.

But let's ask ourselves, why is there such a crisis in the IT market? Or maybe not just in the IT market, but is there an economic crisis in general?

According to the World Economic Outlook, the growth forecast for the global economy is 3.2 per cent in 2024 and 3.3 per cent in 2025. These seem like perfectly normal numbers.

In the US, GDP growth is expected to be 3 % this year (solid), in the EU it is worse, only 1 %, China may struggle to reach 5 % (not as much as in the ‘golden years’, but not bad).

Unemployment is globally low-4.9%. Likewise, inflation is globally back under control - around 5-6%. Decent.

That is to say, there seems to be no global economic crisis anymore (post COVID). And this is where I stop searching the internet for data and rely on ‘conversations with colleagues’.

Because such first-hand conversations to an ordinary person like me yield more than the statistics and forecasts of the best research institutions. And these are my conclusions.

First, the macro scale:

1.After Covid, our consumer behaviour has changed. We buy less. And we are looking to buy cheaper. Global corpo sales columns have fallen. In this context we hear, why do we need AI? Why do we need AI? Where will all this allow us to sell more?

And how do you identify consumer trends from Covid? I read a lot on this subject, but I do not undertake to describe it.

2. My own observation: ‘big corp’ is simply trying to wait out the year with the highest number of elections globally. Because it cannot sufficiently assess geopolitical risks.

We are still waiting for the most important ones, in America, which will take place in November. Seemingly, voter sentiment has turned in favour of Kamala Harris, which seems to be the expectation of the market (including the tech industry). But when the electoral system allows 1% of Pennsylvania voters (my prediction) to decide who personally rules the world...I'm not surprised the world is holding its breath.

3.We are in the year of a complete tectonic revolution in geopolitics. We have two regional conflicts that threaten a third world war. In Ukraine and Palestine. Both affect the two most needed raw materials. Wheat- Ukraine directly. Oil- Palestine indirectly. The world is once again holding its breath and waiting.

Secondly-let's look at the technology business.

1.I personally believe today that AI is not facing exponential growth. The last several months have shown that we already have tools that are more powerful than our imagination on how to implement them. All I hear at all business conferences is ‘our company has implemented a simple tool to show the whole organisation that AI makes sense and it helps’. But literally nothing else. The pattern is the same everywhere- automated workflows/CRM to tame people with AI.

2.Despite the fact that we have too much powerful AI than we can deploy even to global corporations, there has been a lot of buzz recently about another round of OpenAI funding. Why am I writing about it-all the greats of this world and Google and Apple, want to negotiate their share of the company (this may be rumours, of course).That is: until the mighty of this world agree on how much for whom in the largest AI model, the technology business stands. And it waits.

3.And coming down from the clouds to earth- for many years, before the ChatGPT hype, we have seen more and more automation of software development: cloud, serverless, low-code/no-code, languages like Golang that guide the programmer along a string. Production cycle times are decreasing and so is the need for people.

Thirdly- will IT as we know it survive?

I would very much like to say yes!

Unfortunately, this is not obvious to me. But I always try to be optimistic in life.

So let's try:

1.Even if AI puts a whole bunch of junior/mid developers out of work, someone has to reign in the AI implementation strategy, architecture etc. Strategic activities. At the current level, AI will not do this task, and maybe in our lifetime it never will. Live humans will do it.

2.Kamala Harris wins the election (by 1% in Pennsylvania), Putin makes some sort of compromise because he doesn't have the resources to continue with the war, Gulf countries (like Saudi Arabia) need to reinvest money from depleting oil into increasingly digitalising their economies (this is where I see the biggest AI market at the moment)

Global corpo's are much less afraid. And is investing.

3.Where ‘junior frontend’ type jobs are declining (of this I am sadly certain) ‘AI maintenance specialist’ jobs are emerging. In my opinion it will be like the cloud. In the beginning it was private. Likewise, mega-corporations will not hand over their data to cloud-based AI systems.

This is a positive option and according to corporate calendars already in 3-4 months. Worse if it doesn't materialise.

What do you guys think?