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IT economy. How not to be left out of progress

IT economy. How not to be left out of progress

It’s a common knowledge that IT is considered to be one of the most rapidly growing sectors of the economy. Alongside with all the benefits a company or a worker can gain from it, we should understand that the rate of development and informational flow can be negative factors.

In this article I will try to outline the main points of an IT-worker development as well as the IT-industry in general.


I’ve chosen the following measures: self-assessment, interest level and time.

Why so? Time is not a subject to doubt since all processes in our world are time-referenced and that is a feature of our universe dimension.

Self-assessment means the level of salary claimed by a programmer, coder, database administrator or system administrator. This is not necessarily the actual level, it is an ambition. Everyone is striving to get a bigger salary.

Sometimes the ambition curve coincides with real incomes, especially if the person is modest and is satisfied by the promotions made by the employer. Sometimes the ambition does not fit in reality, but nevertheless the crux of the matter is the same. The worker is constantly striving to fulfil his wish of getting an appropriate assessment of his knowledge and skills, embodied in money, material goods and so on.

This curve (a) is also a part of expenditure for companies and clearly shows the labor and intellectual costs.

The curve of interest (b) shows the level of interest of people in this or that technology. It may be the interest in the industry as a whole, or interest of a definite person to a definite technology.

Judging by these measures we can easily describe the processes taking place in the industry and in personal development of an individual.


Let’s consider a situation when a curve shows the interest of the industry to a certain technology. At the beginning the curve has a rapid growth. This growth can be promoted through the media, overheating the market in anticipation of wonder technology or wonder solutions. The technology is evolving for some time, and during the time of its development growth goes on. The curve of self-assessment is hardly increasing, as a new technology requires a certain knowledge and skills.

In the course of time, the technology recedes into the background as the market gets overstocked. As the market is overstocked, skilled labour payment expenses increase, which reduces the margin of business profitability from using this technology. The intersection of a and b curves (shaded area) shows the margin of profitability. It is quite possible that a reduction of interest in certain technology arises when there is a reduction of business profitability.

A point on this graph shows the economic death of the technology. It will be used for some time, as there is lag for development, but one should not expect large investments in it.

Both an employee and a company using or going to use this technology in their products should clearly understand how much of product life cycle is left. Otherwise, you can go to pot very quickly.

Boosting interest in technology (curve b’) will give a temporary increase in profitability and employees will react raising their payment requirements.

If the technology dies earlier than maximum employee requirements (curve a’)were achieved, then an interesting effect appears. The professionals specializing in the old technology are in demand for some time, because it is necessary to maintain the old systems, programs, devices. So an employee gets a unique chance to raise wages because of his unique knowledge until the point C is reached and then the demand will be reduced to nothing.

On the other hand, curve a shows the interest of an employee to learn or use a certain technology, as well as the interest in this profession.

The intersection of lines a and b in this case will show the cost of specialist training. On the early stage of specialist development there is no increase in self-assessment because knowledge accumulation is in progress. In the course of r time, an employee’s professional growth, his payment requirements will increase until it comes to the point when the company gets no benefit from him or until he loses interest in the technology or the industry as a whole.

If we attempt to moderate the employee requests, and move the curve in a’, the company will not get benefit as well since the decision to change a job or a career will be made because of the employee’s fading interest in the work itself. The increased interest leads to a rapid rise in the cost of the employee, reaching loss point B and resulting in dismissal.


What conclusions can be drawn from the above-described?

  • The employees and the company should keep their eyes open in order not to miss the slump of technology. IT Industry is growing rapidly. The technology that was cutting-edge two years ago, tomorrow may get outdated.
  • It is better to pay close attention to new technologies as the costs of their study and application remain low long enough but profitability increases.
  • Staff turnover, labor costs increase, fading interest in the work will take place anyway. In order to minimize these processes, one must try to return to the zero point of interest. This can be achieved by changing the type of work (promotion), learning new technologies and other things.
  • Startups with the use of new technologies will be more profitable in case of a technology’s success.

The processes going on in the economy can be easily described with the help of two or three graphics. One graph can describe dozens of processes. It proves the fact that they are closely interconnected and the system is self-balanced and disrupting the balance can bring about deplorable consequences for everybody.

  • Splashnology Editors,
  • April 5, 2011


This post has been written by the team here at

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