How the uncertain market conditions will affect the tech industry in 2024

Recent market conditions have been riddled with uncertainty, stemming from a variety of factors including tighter monetary politics, global conflicts, and the emergence of artificial intelligence, poised to reshape job landscapes. While these factors influence both short and medium-term market dynamics, their impact is not constant.

In the tech industry, we've become accustomed to unsettling news about the market, with numerous global tech giants downsizing their workforce. This trend stems from the challenging macroeconomic landscape, and other various reasons frequently highlighted on social and traditional media, such as geopolitical conflicts, political instability, and the rise of artificial intelligence (AI).

The pressing question remains: is this shift a persistent change or merely a fleeting trend? Will the current market factors reshape the job landscape for good? To shed light on this issue, we've undertaken a thorough analysis of the market, adopting a comprehensive perspective encompassing both the tech sector and individual perspectives.

Political and monetary instability

Lower inflation rates suggest that the European Central Bank is likely to adjust its monetary policy in the near future. Yet, the ongoing global conflicts might have an impact on inflation, in the case of disturbed supply chains, for instance.

The crisis in the Middle East, in particular, has the possibility to affect two significant aspects of the global economy: oil prices and supply chains passing through the Red Sea. These factors present potential disruptions that could cause the currently decreasing inflation to once again become rampant. Therefore, the long-awaited changes in monetary policy are not yet set in stone.

2024 is also the year of many elections, which, of course, celebrates democracy but also brings political instability due to the polarisation in Western society. With a rising number of far-right parties estimated to gain support in the upcoming elections, the political landscape becomes less predictable, which heightens market volatility. Moreover, indications of rising protectionism further increase market instability, posing challenges to the principles of free trade.

While market conditions are improving, there are potential threats on the horizon. These factors collectively create uncertainty in the markets and lead companies to hesitate in executing investments. Predicting their impact on the market is challenging due to their complexity and intricate relationships. Taking a neutral stance, it can be estimated that the world economy will be suffering from certain market conditions this year, but it is also regaining some positive drivers compared to last year.

Hype about AI

When it comes to AI, it is forecasted to alter companies' workforce planning strategies, intensifying competition within the market for individuals. These complexities necessitate heightened flexibility from market operators and participants alike, underscoring the challenges inherent in navigating today's market landscape.

While it may not be the most popular viewpoint, it's worth stating nonetheless: the widespread replacement of tech professionals by AI is unlikely to happen anytime soon. Moreover, there exists no empirical evidence demonstrating a long-term correlation between technical advancements and increased unemployment.

Throughout the industrial era where great technical advancements have been achieved, one factor has remained somewhat constant: the need for human labor. Naturally, the types and demands of jobs have evolved and will continue to do so, necessitating a diverse set of skills.

AI holds the potential to enhance productivity and streamline manual tasks, but the pace of adoption of AI tools and capabilities should be approached with caution. Maintaining a childlike curiosity for learning and continuously developing one's skillset is essential in this dynamic landscape.

Effects on the freelancing market

What does the current market landscape look like for freelancer agencies and tech professionals? We've observed a significant shift where companies are increasingly favoring individual hires over entire teams.

This trend can be seen as a positive development for freelancer agencies and freelancers alike. However, it also intensifies market competition, with certain roles attracting numerous candidates from various sources, giving buyers a bit more leverage in negotiations for the time being.

In the long run, this imbalance is likely to stabilise, as the demand for senior talent remains consistently high. From an individual standpoint, staying updated on industry trends, maintaining a flexible approach, and continuously honing skills greatly enhances the chances of securing future opportunities.

Despite prevailing market uncertainties, companies demonstrate a willingness to retain experienced professionals, whether as freelance consultants or their own employees, for extended project durations. As uncertainties gradually recede, the need for digital investments persists, presenting a promising pathway forward.

We remain optimistic about the medium-term outlook, believing that brighter days lie ahead. Rest assured, we are committed to diligently matching our unique talent pool with the best-suited projects.

Interested in hearing more about employing freelancers in the current market conditions? Reach out to us and let’s talk!