Software Development Has Diseconomies of Scale

There some effort to portray this as unusual compared to other industries through a direct comparison to retail costs of larger grocery goods and manufacturing economies of scale, but that's somewhat missing the point. Product development and engineering probably faces similar diseconomies in non-software domains (the same complexity issues and human factors issues that effect software development are present) and, OTOH, actually delivering units of identical software (or services provided via software in the SaaS world) have similar (perhaps more extreme in some cases) economies of scale as are seen in many areas of manufacturing, as the marginal costs are low and more units means that the fixed costs divided by units sold goes down.

Very few. Engineers love simple and reliable stuff. You might be thinking CS graduates.

You model the price per unit as the sum of different curves.

Complexity not only increases on Software, but if you design a thermal engine, or a plane, or a car.

Working making something as simple as fiberglass, we had something like 100 components, like tensioactives. Most of them we had no idea what they were for, as they were added like decades ago by someone who new.

Nobody wanted to remove a given component and be responsible for the fiber breaking and stopping the line, incurring on tens of thousands of dollars in penalties, so new complexity was added, but not removed.

In my experience, software is the thing in which YOU CAN get the most economies of scale possible, because you do not depend of the physics of the world. But you need to control complexity as you develop.

In the real world, you create a box because it is the only way of doing something, and the box automatically encloses everything that is inside. You can't see inside, nor want to. It is a black box that abstracts your problems away.

In software you have to create the boxes. Most people don't do it, with nefarious consequences.