Where Will the Next 50 Million Developers Come From?

As the global economy becomes increasingly technology-driven and less trade-driven, the most important demographic to understand is developers. These are not just underground hackers or hoodie-wearing code monkeys; they are creative problem solvers who use digital technology to build things. In my last deep-dive, I profiled Agora, the API platform company for building apps with real-time audio and video capabilities. One of the reasons behind its current success is its product’s developer-friendliness.

So how many developers are there? How many will there be to power this global economy? And where will the next generation of developers come from?

There are currently 56 million developers on GitHub, the world’s dominant developer collaboration platform, according to its own “2020 State of the Octoverse” report. GitLab is a fierce competitor of GitHub. BitBucket and SourceForge are both still around. Alternatives like Gitee are also being fostered. Thus, there are likely more than 56 million developers total at this moment.

GitHub predicts having 100 million developers on its platform by 2025, so we are looking at an almost doubling of the number of developers in the next five years. That’s why in my “Global by Nature” series -- my investment and opportunity set for the next 10 years -- I placed understanding developers at the very top of all considerations.

Digging deeper into GitHub’s report, there are some fascinating trends to illuminate where these next 50-million-plus developers will come from and what that means for the next phase of globalization.

From 2015 to 2030

The 2020 State of Octoverse report provides a nice visual of where open source contributors were coming from and where they may be from in the future -- from 2015 to 2020 and projecting into 2025 and 2030. Open source technologies are powering the world’s economy. Thus, open source contributor count is both an effective heuristic of developer growth (most developers use or contribute to open source) and overall economic growth.

In 2015, the US was the lone bright spot, accounting for 30.4% of the world’s open source contributors. Germany and the UK were number 2 and 3 with 7.3% and 5.8% respectively.

However, in just five years, that distribution has shifted quite significantly. By 2020, the US is still number 1 but its proportion of contributors has fallen to 22.7%, while China and India raced ahead to 9.76% and 5.2% respectively. Being the two largest developing countries, China and India’s growth shouldn’t come as a huge surprise. What may be surprising is the growth of other smaller countries and regions. Here’s the top five in terms of year-on-year growth rate in 2020:

Pakistan, Indonesia, Turkey, Colombia, and Peru round out the second half of the top 10. It’s also important to keep in mind that huge growth rates are usually the result of a small base number, so take that into account when you think about these rather large growth numbers. What’s more interesting to me is that the fastest growing developer clusters are coming from Africa, the Middle East, and Latin America.

Looking into GitHub’s “crystal ball,” by 2025, the US’s open source contribution is expected to decrease and stabilize to around 16.4%. China’s share will continue to increase to 13.3%, India’s to 7.9%, while Brazil and Nigeria may register 3% and 1.5% respectively.

GitHub did not provide a prediction for 2030, but its report did provide the same visual for what 10 years from now may look like. If you squint hard enough, China appears to be a brighter spot than the US, while India, Brazil, Russia, and Nigeria continue to get noticeably brighter. One other country that looks more visible is Indonesia.

With the exception of South Africa, this trend aligns well with the overall growth of the BRICS countries (Brazil, Russia, India, China, South Africa). It’s a short-hand of the major emerging economies, which became a loose international group that was first organized back in 2009. Its developed economies counterpart, the G7, appears to not be a part of this global developer growth wave; only the US and Germany look to maintain significant open source contributor shares.

Emerging Market Developers’ Impact

Of course, squinting is not real analysis. But it is clear that the distribution of developers will be more widespread around the world. What’s not so clear is where and how they will make economic impact.

I see the emerging market developers’ impact falling into three buckets in the next 10 years: outsourcing outposts, building domestic markets, founding global-scale startups.

Outsourcing outposts: this category is the easiest to understand, because it has been happening for a long time. Large, mature tech companies like IBM and Intel will continue to move low-end non-core technical jobs to cheaper locations with a large pool of technical workforce. India has been a big beneficiary of this trend. Other countries like Brazil and Nigeria may soon follow. Unless there are policy changes in the US that force these companies to onshore more jobs back to America to boost domestic employment, offshoring will continue, just to different locations depending on the price and size of the developer pool. The local economic impact of these “offshore developers” will be somewhat limited, as most of the savings and efficiency gains will be accrued to the multinationals doing the offshoring.

Building domestic markets: more and more tech startups are being founded in emerging markets to serve those emerging markets. I briefly profiled four tech giants in Southeast Asia in a previous post -- Grab, Gojek, SEA Group, Tokopedia. SEA Group is already a publicly traded company in New York and Grab may soon do the same. India also has a strong corp of high-growth tech companies with 21 unicorns to date, which I wrote a deep dive on in July of last year in “Unicorns Entanglement: India, China, America”. Companies like Mercado (e-commerce), Rappi (delivery service), and Nubank (neobank) lead the way in the LATAM region. Jumia (e-commerce) is the current standout in Africa. While none of these markets are anywhere near the same level as the US, the EU or China when it comes to technological sophistication or output, they all have high-growth developer clusters, as we saw above. That means they will catch up fast, particularly as more of these emerging market developers learn, use, and contribute to best-in-class open source projects, which are a big equalizer of technology access. These developers will have plenty of great companies to work for to build their domestic markets.

Founding global-scale startups: this last scenario will take the longest time to play out but, from an investor’s point of view, is also the most attractive to me. As a developer hub matures and levels-up, it will solve harder and harder problems -- first for the outsourcers, then its domestic emerging markets to bring them up-to-par with mature markets, then ultimately tackling problems that even the mature markets might need solutions to! These developers’ economic impact will be global.

It’s not unfathomable to imagine some cloud computing, enterprise tech, and AI products being built by developers in India or Brazil and selling well in the US and EU. (After all, most technology spending is still happening in developed countries.) Climate change technology is another sector where emerging market solutions can flow to developed markets. The Israeli developer ecosystem is already creating startups that are serving markets well-beyond its own border or Europe. Enterprise tech companies founded in Russia and China are also making progress in the US and EU, though they are facing unprecedented geopolitical headwinds.

This future creates both the exciting prospect of global companies being built outside of wealthy countries and the tough challenge of building, scaling, and operating global companies from places where there was no history of having done so. And much of how this future will play out will depend on how this next crop of developers use the technological superpower at their fingertips, now that we know where they will come from.

If you like what you've read, please SUBSCRIBE to the Interconnected email list. To read all previous posts, please check out the Archive section. New content will be delivered to your inbox (twice per week). Follow and interact with me on: Twitter, LinkedIn, Clubhouse (@kevinsxu).