The Economic Impact of Developer Experience

Hey, I am Klaus Haeuptle! Welcome to this edition of the Engineering Ecosystem newsletter in which I write about a variety of software engineering and architecture topics like clean code, test automation, decision-making, technical debt, large scale refactoring, culture, sustainability, cost and performance, generative AI and more.

In the newsletter Why improving Developer Experience is so important I have shared some insights on what developer experience and why it is important. This newsletter takes macroeconomic perspective on the economic narratives around Developer Experience (DX) that highlight the importance of investing in DX for companies and organizations. Here are some key economic narratives around DX:

1. Economic Impact of AI-Powered Tools: AI-powered developer tools, like GitHub Copilot, can improve productivity. Research suggests that AI could increase global GDP by over $1.5 trillion. These tools empower developers to create more efficiently and getting more effective, leading to economic growth and innovation.

2. The Rise of Developers: Developers are now a powerful force in the tech landscape. Their influence extends beyond writing code; they shape product decisions, drive innovation, and impact business outcomes. The blog post on DistantJob provides information about the global number of software developers and compares it to the population of Australia. As per the blog, there are currently 26.9 million software developers worldwide, and this number is projected to increase to 28.7 million by 2024. The number of developers globally exceeds the population of Australia and is growing rapidly. In the year 2023 Europe has 6,1 million, the US 4,4 million, China 7 million and India 5,8 million developers.

3. The Enormous Impact of Open Source: Open source software has revolutionized the technology industry and has had a profound economic impact. It has democratized software development, allowing anyone, anywhere, to contribute to and benefit from the collective knowledge of the global developer community. The economic impact of open source is profound and far-reaching. It has reduced costs, fostered innovation, created new business models, and driven economic growth. As the digital economy continues to evolve, the role of open source is likely to grow even further. The study The Value of Open Source estimates that Open Source contributes more than 8,8 Trillion Dollars to the global economy. It also shows the importance that companies actively contribute to Open Source to ensure the sustainability of the Open Source ecosystem.

4. Globalization, Reshoring and Remote Work: With the rise of globalization and the digital economy, developers are no longer confined to one location. This has led to a significant increase in remote work, allowing companies to tap into global talent pools. This shift has implications for developer experience, as it requires new ways of collaboration and communication. At the same time many companies recognize the importance of on-site collaboration and are investing in hybrid models or bring people back to the office. Depending on the preference of the developers the company policy can have a significant impact on the developer experience. A trend reverting some of the changes from globalization is reshoring and friendshoring, where companies bring back development to their home country or countries with less business risk. Main reasons can be the changing risk landscape, increased cost in the offshoring countries, the benefits of improved quality or the productivity improvements through AI tools .

5. Economic Opportunities behind Developer Experience: DX encompasses the entire developer journey, not just coding, writing new code is actually only a very small part. It includes aspects like maintaining code, testing, addressing security issues, handling incidents, making architecture decisions and much more. Good DX acknowledges the messy, complex reality of software development and addresses all the different cultural, technical and process capabilities needed for creating, maintaining, evolving and operating software systems. This vast ecosystem of the different capabilities needed and the growing number of developers provide many opportunities for companies to contribute to improving developer experience and create a viable business.

6. Economic Cycles and Cost Savings: Economic downturns can lead to layoffs and budget cuts, impacting the job security of developers. Conversely, during economic booms, developers may have more job opportunities and higher salaries, improving their overall experience. While some major tech companies reduced their workforce, the global demand for developers remains strong.

7. Superdevelopers and Competitive Advantage: Beyond regular developers, a new category could emerge: superdevelopers - engineers which become more capable to drive outcomes due to better tool support, developer experience and extraordinary capabilities. They drive competitive advantage by owning and shaping products and outcomes. Organizations that prioritize DX and invest in tools aligned with developer pain points will thrive in the evolving tech landscape.

8. Technological Advancements: Rapid advancements in technology can both positively and negatively impact the developer experience. On one hand, new tools and technologies can make developers' work more efficient. On the other hand, the constant need to learn and adapt to new technologies can be stressful.

9. Regulation and Policy Changes: Changes in regulations and policies, such as data privacy laws, new regulations around cyber resilience or generative AI, can impact the work of developers. They may need to spend more time ensuring compliance, which can detract from their core development work. At the same time, regulations can also drive innovation and create new opportunities for developers. The EU Cyber Resiliency Act will introduce regulation for software development and operation to ensure that software is secure and resilient, which e.g. includes that companies take ownership of the complete software supply chain (e.g. including Open Source dependencies).

10. Economic Development and Infrastructure: In developing economies, issues like unreliable internet and electricity can impact the developer experience. Conversely, in developed economies, high-quality infrastructure can enhance the developer experience. E.g. GitHub CoPilot does not work without a stable internet connection when traveling via train. At the same time the cost of living can be a significant factor in the developer experience. Companies are starting to offer housing support or relocation to locations with cheaper cost of living to attract and retain talent.

11. Demographics and Diversity: The tech industry is often criticized for its lack of diversity. This can impact the developer experience, as underrepresented groups may feel discrimination, bias or have difficulties with thriving in the environment.

11. New kind of developers - Citizen Developers:: The core conflict in developer tools lies between abstraction (e.g. low code/no-code) and complexity. In many cases abstraction simplifies tasks for developers but may overlook critical aspects of their work. Balancing abstraction with the need to address real-world complexities is crucial. The rise of citizen developers, who are not professional developers but build applications using low-code/no-code platforms, is an example of how abstraction can empower a broader audience to create software and contribute to a new dynamic in the economy. This can especially be helpful for simpler less critical applications. At the same those tools should not be applied to context with high complexity and high criticality. Since the tools often hinder in making changes and ensuring qualities.

12. Security and Economic Impact: Security is a crucial aspect of the developer experience and has significant economic implications. Inadequate security practices can lead to vulnerabilities, data breaches, and system downtime, which can result in substantial financial losses. The global cost of cybercrime can raise to 10.5 trillion in 2025. On the other hand, investing in secure development practices and tools can prevent many issues, saving costs in the long run. Furthermore, developers who are well-versed in secure coding practices can contribute to creating safer applications, reducing the risk of security incidents and the associated economic impact. The EU Cyber Resiliency Act will emphasize the importance of secure software development and operation.

In summary, developer experience isn't just about writing code; it's about empowering developers to build better, innovate, and contribute to economic growth. The economic story behind DX is one of opportunity, influence, and the evolving role of developers in our digital world. While DX may seem like a subjective or intangible concept, it has real economic implications for societies, companies and organizations. By focusing on improving the developer experience, companies can boost productivity, attract and retain top talent, accelerate time-to-market, reduce long-term maintenance costs, leverage vibrant ecosystems, and potentially increase market share and revenue.

Mark as not spam: : When you subscribe to the newsletter please do not forget to check your spam / junk folder. Make sure to "mark as not spam" in your email client and move it to your Inbox. Add the publication's Substack email address to your contact list. All posts will be sent from this address: ecosystem4engineering@substack.com.

❤️ Share it — The engineering ecosystem newsletter lives thanks to word of mouth. Share the article with someone to whom it might be useful! By forwarding the email or sharing it on social media.