Elastic Demand Industries

Focus on industries where 10x productivity creates 10x more demand, not 10x fewer jobs

Brendan Foody
Why experts writing AI evals is creating the fastest-growing companies in history

Elastic Demand Industries

"In terms of jobs, I would respond with a category of things that have very elastic demand... When we make people 10 times more productive, we'll build 10 times, if not 100 times as much software." - Brendan Foody

What It Is

Elastic demand industries are sectors where increased productivity expands total demand rather than reducing headcount. When technology makes workers 10x more productive, these industries don't need 1/10th the workers—they produce 10x more output and create more opportunities.

This framework helps navigate career decisions in an AI-transforming economy by identifying which industries will see job growth versus displacement as AI augments human capabilities.

How It Works

Industries sit on a spectrum from inelastic to elastic demand:

Inelastic (limited expansion potential):

  • Accounting - "Realistically we only need so much accounting in the world"
  • Administrative tasks
  • Basic compliance functions

Elastic (unlimited expansion potential):

  • Software development - "There's just unlimited demand for the industry"
  • Product management - "PMs that can now do so much more are going to be extremely well-positioned"
  • Consulting - "Imagine if we could have 10x as many McKinsey consultants"
  • Creative production
  • Research and analysis

The key distinction: Does more productivity unlock more value creation, or does it simply mean fewer people doing the same work?

How to Apply It

When evaluating career paths:

  1. Ask the elasticity question - If everyone in this field became 10x more productive, would the industry need 10x more work done, or would it need 1/10th the people?

  2. Look for value creation, not value maintenance - Elastic industries create new value; inelastic industries maintain existing processes

  3. Prioritize AI leverage - "The companies and people that are going to succeed are those that lean into this narrative of abundance"

  4. Skill for augmentation - "Use the tools and let's see what you can do" - develop skills in using AI, not competing with it

When evaluating companies to join:

  1. Assess their mindset - Are they "fearful, not wanting to engage" or "leaning into" AI transformation?
  2. Look for abundance thinking - Companies asking "If we can do 10 or 100 times more, what will that mean?"
  3. Avoid defensive postures - Companies trying to "stop displacement" rather than "do so much more"

When to Use It

  • Choosing what to study or which skills to develop
  • Evaluating job opportunities and industries to enter
  • Advising younger people on career direction
  • Deciding whether to reskill or double down on current expertise
  • Assessing company strategy and culture fit

Source

  • Guest: Brendan Foody
  • Episode: "Why experts writing AI evals is creating the fastest-growing companies in history"
  • Key Discussion: (00:20:47) - Jobs with elastic demand; (00:22:25) - The elasticity concept explained
  • YouTube: Watch on YouTube

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