Key Insight #4
What is the impact of this?
At first glance, it seems logical to assume that a sharp increase in productivity would reduce the need for
resources, such as developers since the same amount of work can be achieved with fewer people.
However, we believe the opposite will occur: as software becomes more affordable, the demand for software products
will grow as it will be cheaper than ever to produce. This pattern, known as Jevons Paradox, has a historical
precedent: when steam engines became more fuel-efficient in the 19th century, coal consumption didn’t decrease.
Instead, it soared as cheaper and more efficient engines drove expanded use across industries.
Total investment in custom software development increases
share this stat
proxify.io / 2024 / AI use in development: Jevons Paradox
Similarly, the Lump of Labor Fallacy mistakenly assumes that technological advancements reduce the need for human
labor by replacing tasks with automation. However, history shows that innovation creates new types of work,
shifting industries and roles. In software development, AI tools don't replace developers; they complement them,
handling routine tasks to free up developers for more strategic, creative work.
AI in code generation tools, (IDEs), and LLMs, has revolutionized how developers approach coding. These
advancements allow developers to automate repetitive tasks, detect bugs faster, and predict the outcome of certain
coding patterns or architectural decisions.
The result is a significant increase in productivity
—freeing up time and mental energy for more creative, strategic, and problem-solving aspects of development.
We’re already seeing a similar trend among our clients. As development processes become faster and more
cost-effective, clients are increasing their investment in custom software solutions rather than reducing it.At
Proxify, this trend will continue, leading to a greater demand for innovative, tailored software.
Additionally, we foresee a shift in the developer’s role. The ability to bridge complex business needs with
technical solutions—traditionally a product manager’s skill set—will become even more essential. Developers who
can translate nuanced business challenges into effective software will be invaluable in this evolving landscape.