I thought I’d put together some of my thoughts on the future of software development. Things like AI, outsourcing and other trends have gotten some people concerned about the future of software development (and white collar work in general) especially in Unites States.

I came up with a few categories of things affecting software development some recently and others not so recent.

Tax Changes (Section 174)

When the Tax Cuts and Jobs Act was passed in 2018 there was a provision that took effect in 2022. This was that Software Development was to be categorized as research and experimentation expenditures and not able to fully expensed.

From eisneramper.com

Under the amended code section, businesses are now required to charge the R&E expenditures to a capital asset and amortize the asset over a 5-year period (15 years in the case of foreign R&E expenditures). These expenditures must also be amortized using the mid-year convention, meaning that in the first year, taxpayers will only be allowed to deduct 10% of the total R&E expenditures.

Needless to say, this has been catching software business owners off guard with much higher than expected tax bills.

Eventually the full expense will be able to be taken but still it seems absolutely insane that a business owner cannot fully expense a software developers’ salary in one year.


Ever since ChatGPT came out in 2022 AI has been a topic of interest in the software development industry. Doing searches for the future of software development will give you a wide range of ideas and opinions on what it means for the future. There seems to be a fear among some that now software will almost write itself therefore drastically reducing the amount of developers needed.

I don’t know that I really subscribe to that idea. Personally, I love using GitHub Copilot, ChatGPT, Microsoft Copilot and other AI tools to help me write software. It helps tremendously with boring boilerplate code and lets you get to the more interesting things. It also can be helpful and suggesting code but you do need to know what you are doing and not blindly accept whatever it suggests.

I feel that developers that do not use AI tools may be replaced by those who do. I believe it’s a great tool to have in your toolbox making you more productive than before.

It is quite possible that some executives will see AI as being able to reduce the people needed and proceed to lay off people in hopes to accomplish the same with less (and possibly this has already happened). However, I feel that the better way to think about this is with the same amount of people an organization will now be able to accomplish even more than before.

Outsourcing work

Outsourcing is not a new thing; it has been done for decades by many companies. However, there does seem to be a trend with an influx of new companies starting around finding employees for small companies. The idea of finding employees to do white collar work at up to an 80% reduction in cost seems to be an easy sell for many businesses.

This can work and has worked for many people. However, talk to people that have tried outsourcing and there are plenty of stories of things that have gone wrong.

I do believe there could be some benefit in a US based business supplementing their local workforce with some employees abroad and more than just cost savings. Say you want to have support available 24/7, having people spread out across the globe could really help with this.

What to think of it all?

If you have a small startup with mostly software developers and it was making a small profit before the recent tax changes, they may be forced to reduce headcount in United States to stay in business. For them instead hiring a few employees in Philippines may be appealing to them.

For a more established business with more diverse forms of income the recent tax changes may not be as painful.

In addition to the things I mentioned we still could be dealing with the effects of the massive hiring surge that happened in 2020-2021. The recent tech layoffs I believe are in part shedding people that probably were not needed in the first place. Also, there is economic uncertainty with some fearing a recession is just around the corner.

All of these things together are more than my finite mind can really comprehend on what might happen in the future.

Out of these things I would think outsourcing may have the biggest impact on software developers in the Unites States. However, I don’t think it’s a doomsday scenario where we should all go looking for other jobs fearing that we may have our salaries cut in half. I think there probably is benefit for many companies to supplement their team with a few people abroad keeping a core team in US.

Also, I didn’t mention how more and more things rely on software in our world and I see that only continuing pushing the need for more developers.

I think for an experienced developer the future is still fairly bright and their skills will be in demand for quite some time yet even here in the US. Now on the other hand in 10 years when my son is looking to start a job I don’t know if I will still agree on it being a good career or not. I guess I’ll have to wait and see!

Also if you are a developer in a country where labor is inexpensive compared to United States, I think things will be very good for you! If outsourcing continues to grow there should be strong upward pressure on salaries in those areas.

What do you think? Agree or disagree? I’d love to hear your thoughs either way. Reach out to me on Twitter (X) anytime.