I study a lot of things and it turns out the railroad industry is a lot like the software industry. The software industry is a lot like many other industries. As an example, the rate of growth for software development is just like the rate of growth for telegraph, telephones, textiles, auto industry and the railroads. There are some obvious comparisons to the software industry.
- Large growth (in the USA – 34 miles of track in 1830 to 200,000 miles of track in 1900).
- Largest employer during its “hay day.” Nearly 9 percent of the total workforce in 1900.
- Eventually outsourced work to Asian workers.
- Cheap labor and automation reduced the demand for rail workers.
Once upon a time, the railroad industry was the world’s largest employer; and, like software jobs in the 1990s’, some of the best jobs were with the railroads. The railroad industry had similar growth to the software industry. In the 19th century Europe, the UK and the USA had rapid growth in railroads. In the USA, there were only 34 miles of railroad track in 1830; and 50 years later, in 1880, there were nearly 100,000 miles of railroad track. Over the next 20 years, from 1880 to 1900, the number of miles of railroad tracked doubled, reaching 200,000 miles. In only 70 years the railroad industry went from a dead stop to 200,000 miles of railroad track.
Employment was not limited to just laying track; there was large employment in manufacturing the locomotives, passenger cars, and freight cars. In the UK, workers built 23,000 locomotives, 73,000 passenger cars, and an amazing 1.4 million freight cars in less than 50 years. This is an amazing feat when considering the tools and technologies that were available.
The building of the railroads and the railcars that ran on the railroad spawned rapid employment growth in the USA and UK. The railroad industry employed about nine percent of the total workforce of Chicago. The rapid growth did not last forever. Railroad employment peaked in the 1920s, declined during the Great Depression, and rose again during World War II. Starting in the late 1940s the railroads had to compete against other forms of transportation: cars, buses, trucks and airplanes. Much of the manual labor was replaced by automation. The railroad companies improved their technology, and they started using diesel locomotives, track-laying machines, and other innovations that reduced demand for labor.
Like the software industry, the railroads suffered from a lack of standardization. There was no standardized track gauge, the distance between the rails, until the 1880s. The distance between the tracks depended on who operated the rails. This lack of standardization caused a lot of problems for those individuals that wanted to ship freight or move people from one point to the next. Parts between freight cars were not standardized either. This is a similar problem faced by the software industry. There is little industry standardization for software development. In the software industry, it is common that software applications developed by the same companies do not communicate and share data.
From 1920 to 1995, those employed by railroads had dropped by nearly 90 percent. In the end, it was a combination of foreigner labor, competition and automation that did the railroad workers in. In the USA, the railroads were built by cheap foreign labor especially by those coming from Asia. Software developers are facing stiff competition from India and China (Asian labor).