The Healing Power of Greed?

In an earlier post on “software factories”, I touched on the question of why America’s software engineers were not, by and large, working on projects that would enhance American software competitiveness:

…the finest software minds of the current generation are not interested in solving the American productivity problem, but are interested in profiting from what I elsewhere call flash-fads, huge blockbuster moneymakers that last for the comparative blink of an eye but, like the Pet Rocks of my youth, make lots of money.

This is probably rational behavior on the part of these software engineers.  Sacrificing current income to make the income of the nation greater over time is a bit like voluntarily helping to pay down the national debt by giving extra money to the Treasury: patriotic, maybe, but certainly not a mass choice.  (One of my partners told me this morning that some $81M had been contributed to the Treasury in this fashion, versus a national debt service obligation several orders of magnitude greater.)

But how does the rational behavior of individual software engineers feed the public good?  Our market orientation in the U.S. gives us a touching faith in what we might call “the healing power of greed”, an exaggeration of Adam Smith’s point of about the “invisible hand” into the notion that individuals can do whatever we darn well please and somehow benefit the polity.  In this raw form, it probably ain’t so.

Yes, over time the drive for hundreds of flash fads has in fact made software development more productive.  It is probably an order of magnitude cheaper and quicker to bring an application to market today than 30 years ago, when I got started in the tech business.  But these benefits accrue to everyone, and don’t provide specific advantage for our country.  Which is what we need to remain competitive.

It seems we can’t escape from a policy that targets innovations which are game-changing and then invests in them directly from the public purse or incents the private sector to factor innovation projects in among the Pet Rocks.

Your thoughts?

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One comment on “The Healing Power of Greed?

  1. Anonymous says:

    In my opinion, it is one of the core challenges of any government to incentivize activities that make the country as a whole more competitive in the long run. To do this, you need to a) provide tax incentives, b) offer grants and subsidies and c) offer excellent education and healthcare. This is how Germany became the world market leader for alternative energy solutions.

    However, I am not sure that the above measures are applicable to the software sector, as innovations within this sector are easily adopted by competing countries. Many years of working with my friends from India and the Ukraine have shown that these guys are just as clever as Americans and that they have no problem using the same tools Americans are using, in the same efficient manner and possibly with a superior work ethic.

    That said, how can Americans justify our much higher salaries? We can outsource the basic programming tasks required to build the foundation for highly sophisticated business solutions. This foundation can then be used by our high-earning U.S. business experts to create actual business logic that applies to selected high-value business processes. Creating this logic cannot be offshored, as the actual experts have to be directly on the pulse of the organization where the solution is implemented. Even small inaccuracies or process failures will significantly diminish the value of the solution. Paying good money for local business solutions makes productivity-sense.

    Take Microsoft’s Visual Studio Light Switch as an example of an environment where the development infrastructure has already been created for local business users. Light Switch provides the business user with a wizard-driven interface to create interactive data-driven applications without getting in contact with code. The business user defines the datasources (database, web services, Excel sheet, etc.), business rules and screen designs. While powerful for what it is, this is just a start for a whole new class of application development kits for business.

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