The Technology Trade-Off: The Cost of Software Development and its Implications for Start-Ups

Survival in the mobile age requires almost every company and organization to invest in a digital presence. At the same time, new digital security threats mean that the costs of this investment are becoming preclusive, especially for smaller firms and start-ups. This is compounded by the fact that economics will continue to be in programmers’ favor for many years to come. Demand will outstrip supply for the foreseeable future, adversely affecting US innovation and productivity. Until recently, outsourcing has been an affordable, although risky, option for cash strapped organizations. However, many traditional off-shore talent pools have also seen steep increases in cost. This paper will examine the current cost and risk environment facing start-ups and small firms. It will offer some recommendations both for start-ups navigating budgeting decisions, and policy maker attempting to alleviate the skills mismatch problem.