A passion for programming. Part 1. Tip 2. Supply and demand
Less than two months later I am posting the second section of the first part of Chad Fowler’s book “Passion for programming”.
Also on the old link is available a new PDF.
<- Start, lead or die 3. Coding is not all ->
When the web was just starting its way, everyone could make a lot of money making simple HTML pages for companies. Each company wanted a page on the Internet for itself and relatively few people knew how to make them. Companies were willing to pay a lot of "experienced" web-designers, who were required only basic knowledge of HTML, links and site structure.
Making HTML pages is easy. It is difficult to make beautiful pages, but the basics are quite simple to learn. Over time, people noticed how big the demand was for web designers and more and more they began to buy and study books on HTML. The market was very hot, wages and hourly rates were high and the supply in response to this began to grow.
The market was filled with designers and they began to divide into truly creative people and simply applied. Moreover, competition began to lower prices. As a result, more companies could afford to take the first step and start flickering on the Internet. Perhaps they could not afford to pay $ 5,000 for the first site, but could pay $ 500.
Of course, some offices were still ready to part with impressive amounts for an unreal site. And some web-designers could still count on a serious reward.
And then the flow of web-designers in the primary and secondary segment decreased. Not too talented designers were replaced by advanced users and other comrades from IT who did not necessarily specialize in HTML design. At this time, the demand, supply and price of working with HTML has reached equilibrium.
This little theoretical story about the life path of a web-designer shows us an economic model, which you probably heard about - a model of supply and demand . For most of us, the concepts of supply and demand are more associated with determining the prices for which goods can and will be sold. The greater the amount of goods on the market exceeds the number of those who want to buy it, the lower its price. The greater the number of buyers exceeds the amount of goods on the market, the price will be higher with this competition of customers.
In addition to predicting the prices of goods and services, the supply and demand model can predict how price changes will depend on the number of buyers and suppliers. Usually more people will buy a cheap thing than an expensive one.
Why is this so important to us? The fashion for offshore development has injected into the market a large number of cheap IT-specialists. And while we are worried about losing our jobs at home, cheap programmers have already increased their overall supply in the market. And as the supply rises, prices fall. Competition in the market for goods and services with high supply depends on the price. In the case of work, this is reflected in the salary. You can not compete in price. You just can't afford it. So what to do?
Cheap offshore programmers focus on a relatively narrow set of technologies. Java and .NET programmers in India are a dime a dozen. There are also many Oracle DBA administrators in India. Less popular technologies represented by offshore programmers are much weaker. Choosing the technology in which you will develop, you should be aware of the impact of increased supply and lower prices on your future career.
When programming for .NET, you will have tens of thousands of times more competitors in the labor market than if you were programming, for example, in Python. This may lead to the fact that the average price for .NET programmers will drop significantly, possibly increasing the demand (thus increasing the number of jobs in this area). In the end, it is possible and not difficult to find a job, but it is unlikely to be well paid. The offer on the Python programming market is much lower than on .NET, but the demand is well-matched.
In the Python programming market, where the prices for programmers are much higher, people may be attracted to a higher price range and start offering their services, thus reducing prices on average.
Thus, everything and balance. But one aspect is obvious. India serves only the already stabilized IT markets. You will not meet the average offshore company, moving on to any unusual technology. They will never be pioneers. They never take the risk. They wait for the equilibrium in the technology market and then blow it up with their super-cheap programmers.
Based on these observations, you can choose the segment of the market in which demand is not so high as your arena. However absurd it may sound, if you are afraid of losing to offshore programmers, then one of the possible options is to avoid the types of work they do. Offshore companies take on those industries in which demand is high. Therefore, if you focus on sufficiently niche technologies, you probably will not reduce competition (as there are less jobs in this market), but this will allow you to switch from price competition to competition capabilities. And that's exactly what you need. You can not compete in prices, but in abilities - completely.
It should also be borne in mind that with lower prices for programmers in the dominant technologies, the demand for them will increase. So for example, the general increase in demand for Java programmers may well lead to an increase in the number of jobs (of a certain type) in this segment, but certainly not to a decrease. The expansion of the offshore market of cheap development can cause an increase in demand, including the most expensive developers.
So it usually happens. Many companies come to the conclusion that for the normal development of offshore development it is necessary to have in stock and high-class developers who set standards, control quality and lead the project in a technological plan. The general growth in demand for programming for Java naturally led to an increase in demand for this category of workers within java. Low-level work can be performed offshore, but the available high-level tasks have become much more than before the emergence of offshore development. Just as in niche markets, in this tier of the Java development market, competition shifts from price to ability.
Study current demand for technical skills. Check out career and job sites, find out which skills are high and which are low. Find several sites of offshore companies (or talk to employees of such companies, if you work with them). Compare what they offer with the list you made. Note those that are in high demand, but are practically not provided by outsourcers.
Make the same comparison among the newest technologies and skills provided by outsourcing companies. Look more closely at the areas that are not greatly affected by offshore developers. How much time will it take for them to patch these gaps? And will they do it at all? In this period of time the market will not be balanced.
Also on the old link is available a new PDF.
<- Start, lead or die 3. Coding is not all ->
2. Supply and demand
When the web was just starting its way, everyone could make a lot of money making simple HTML pages for companies. Each company wanted a page on the Internet for itself and relatively few people knew how to make them. Companies were willing to pay a lot of "experienced" web-designers, who were required only basic knowledge of HTML, links and site structure.
Making HTML pages is easy. It is difficult to make beautiful pages, but the basics are quite simple to learn. Over time, people noticed how big the demand was for web designers and more and more they began to buy and study books on HTML. The market was very hot, wages and hourly rates were high and the supply in response to this began to grow.
The market was filled with designers and they began to divide into truly creative people and simply applied. Moreover, competition began to lower prices. As a result, more companies could afford to take the first step and start flickering on the Internet. Perhaps they could not afford to pay $ 5,000 for the first site, but could pay $ 500.
Of course, some offices were still ready to part with impressive amounts for an unreal site. And some web-designers could still count on a serious reward.
And then the flow of web-designers in the primary and secondary segment decreased. Not too talented designers were replaced by advanced users and other comrades from IT who did not necessarily specialize in HTML design. At this time, the demand, supply and price of working with HTML has reached equilibrium.
This little theoretical story about the life path of a web-designer shows us an economic model, which you probably heard about - a model of supply and demand . For most of us, the concepts of supply and demand are more associated with determining the prices for which goods can and will be sold. The greater the amount of goods on the market exceeds the number of those who want to buy it, the lower its price. The greater the number of buyers exceeds the amount of goods on the market, the price will be higher with this competition of customers.
In addition to predicting the prices of goods and services, the supply and demand model can predict how price changes will depend on the number of buyers and suppliers. Usually more people will buy a cheap thing than an expensive one.
You can not compete in price. In fact, you just can't afford it.
Why is this so important to us? The fashion for offshore development has injected into the market a large number of cheap IT-specialists. And while we are worried about losing our jobs at home, cheap programmers have already increased their overall supply in the market. And as the supply rises, prices fall. Competition in the market for goods and services with high supply depends on the price. In the case of work, this is reflected in the salary. You can not compete in price. You just can't afford it. So what to do?
Cheap offshore programmers focus on a relatively narrow set of technologies. Java and .NET programmers in India are a dime a dozen. There are also many Oracle DBA administrators in India. Less popular technologies represented by offshore programmers are much weaker. Choosing the technology in which you will develop, you should be aware of the impact of increased supply and lower prices on your future career.
When programming for .NET, you will have tens of thousands of times more competitors in the labor market than if you were programming, for example, in Python. This may lead to the fact that the average price for .NET programmers will drop significantly, possibly increasing the demand (thus increasing the number of jobs in this area). In the end, it is possible and not difficult to find a job, but it is unlikely to be well paid. The offer on the Python programming market is much lower than on .NET, but the demand is well-matched.
In the Python programming market, where the prices for programmers are much higher, people may be attracted to a higher price range and start offering their services, thus reducing prices on average.
Thus, everything and balance. But one aspect is obvious. India serves only the already stabilized IT markets. You will not meet the average offshore company, moving on to any unusual technology. They will never be pioneers. They never take the risk. They wait for the equilibrium in the technology market and then blow it up with their super-cheap programmers.
Based on these observations, you can choose the segment of the market in which demand is not so high as your arena. However absurd it may sound, if you are afraid of losing to offshore programmers, then one of the possible options is to avoid the types of work they do. Offshore companies take on those industries in which demand is high. Therefore, if you focus on sufficiently niche technologies, you probably will not reduce competition (as there are less jobs in this market), but this will allow you to switch from price competition to competition capabilities. And that's exactly what you need. You can not compete in prices, but in abilities - completely.
It should also be borne in mind that with lower prices for programmers in the dominant technologies, the demand for them will increase. So for example, the general increase in demand for Java programmers may well lead to an increase in the number of jobs (of a certain type) in this segment, but certainly not to a decrease. The expansion of the offshore market of cheap development can cause an increase in demand, including the most expensive developers.
So it usually happens. Many companies come to the conclusion that for the normal development of offshore development it is necessary to have in stock and high-class developers who set standards, control quality and lead the project in a technological plan. The general growth in demand for programming for Java naturally led to an increase in demand for this category of workers within java. Low-level work can be performed offshore, but the available high-level tasks have become much more than before the emergence of offshore development. Just as in niche markets, in this tier of the Java development market, competition shifts from price to ability.
Use market imbalance.The most important lesson we can learn from the supply and demand model is that increasing demand increases price competition. The time-tested strategy of following the market will put you in the framework of price competition with offshore developers, because your skills will coincide with those that are popular in attractive balanced markets for them. To compete in the market of popular technologies, you must move to a higher tier. Or you can use the imbalance of the technology market - go where the offshore companies are not going. In any case, it is necessary to understand the alignment of forces and skillfully respond to its changes.
Act!
Study current demand for technical skills. Check out career and job sites, find out which skills are high and which are low. Find several sites of offshore companies (or talk to employees of such companies, if you work with them). Compare what they offer with the list you made. Note those that are in high demand, but are practically not provided by outsourcers.
Make the same comparison among the newest technologies and skills provided by outsourcing companies. Look more closely at the areas that are not greatly affected by offshore developers. How much time will it take for them to patch these gaps? And will they do it at all? In this period of time the market will not be balanced.
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Source: https://habr.com/ru/post/85922/
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