AGI: A Double-Edged Sword for Our Economy

The democratization of software creation could unleash unprecedented innovation while simultaneously triggering significant economic disruption.

Mar 31, 2025

As we stand at the precipice of a new era in technology, I've been thinking deeply about how AGI-powered software development tools might reshape our industry - and our economy.

The democratization of software creation could unleash unprecedented innovation while simultaneously triggering significant economic disruption.

Let's explore this fascinating paradox together.

The Great Software Creation Boom

The integration of AGI into software development tools is rapidly transforming how we build digital products.

Unlike traditional AI that excels at specific tasks, AGI promises human-like reasoning and problem-solving across multiple domains.

This evolution is making software creation accessible to virtually everyone.

AGI is revolutionizing development by automating code generation, enhancing problem-solving capabilities, and dramatically accelerating development cycles.

What once required years of training and expertise can increasingly be accomplished through natural language prompts and high-level guidance. As one industry observer noted,

"Just as software is eating the world, AI is going to eat software".

The barrier to entry for creating software is collapsing before our eyes. Soon, anyone with an idea will be able to transform it into functioning software without writing a single line of code themselves.

The Economic Paradox

While this democratization of creation sounds like a technological utopia, it carries significant economic implications. When everyone can create software, we face two major challenges:

First, we'll likely see market saturation. As the supply of software tools explodes, their perceived value and price points may plummet. What happens when custom enterprise software that once cost millions can be generated for pennies?

Second, and more concerning, is the potential for widespread job displacement. The software development world is approaching what some experts call an "AI-fueled crisis".

As AGI systems operate at near-zero marginal cost, they could reduce the marginal productivity of human labor, potentially pushing wages down dramatically.

This wouldn't just affect developers - it would ripple through adjacent industries and eventually the broader economy.

Navigating the Transition as Product Leaders

As product professionals, we must adapt our strategies to this new reality. Here's how:

Focus on human-centered value: The products that will thrive won't just be technically excellent but will solve deeply human problems in ways that resonate emotionally.
Build complementary skills: Develop expertise in areas that enhance rather than compete with AGI - strategic thinking, user research, ethical product design, and stakeholder management.
Experiment with AI-human collaboration models: Create development processes where AGI handles implementation while humans provide creative direction, ethical guidance, and quality assurance.
And more; embrace continuous learning and adaptation, focus on differentiation through unique data and domain expertise, prioritize AI ethics and responsible innovation..

Consider how Uber emerged during the 2008 recession - they didn't just build another taxi app; they reimagined transportation entirely.

Similarly, we need to reconceptualize what software development means in an AGI world.

The Path Forward

As intimidating as this transition might seem, it also presents unprecedented opportunities.

Product leaders who understand both the technical capabilities of AGI and the evolving economic landscape will be positioned to create tremendous value.

The solution isn't to resist this change but to shape it. We need to advocate for thoughtful transitions that maximize innovation while minimizing economic harm - perhaps through new economic structures that ensure broader access to AGI-driven profits.

What's your product strategy for the AGI age?

Are you preparing your teams and skills for this transformation?

I'd love to hear your thoughts.

Samet Özkale

sametozkale.com

AI for Product Power

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