Nearly forty years ago Bill Gates, along with Paul Allen, founded Microsoft. Since then Microsoft has been a driving force in the software, enterprise, and IT industries. He’s also one of my personal heroes.
He posted this note on his blog after reading “Capitalism Without Capital” by Jonathan Haskel and Stian Westlake.
Gates points out that the intrusion of software into the industry that was previously driven by tangible goods the world needs to rethink economic models. He points out in the below image of the Supply/Demand model that this is how he was taught the economy worked.
It’s not entirely untrue, but this model doesn’t work for software anymore- because software can be deployed and shared anywhere for little to no cost. Rather than things like cars- which require materials and people to assemble each one. Software is also no longer very transferable- with many companies moving to subscription based models requiring you to log in to the software for access. As such, you can’t sell used software easily anymore. But you could still sell your car.
Regardless… the blog post is great and you should check it out: Gates on Gates Blog
I’m going to check out Capitalism w/o Capital! When I finish it I’m going to post my perspective on it, as I wonder- between job loss and other things- exactly how the worlds economy will evolve in the coming decade.