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The Demand Trap: Why AI Will Eat Its Own Market - and What Smart Executives Do About It
Paperback
Publisher: Independently Published
Published: May 26 2026
Pages: 102
Weight: 0.28
Height: 0.21 Width: 5.50 Depth: 8.50
Language: English
A peer-reviewed model from the University of Pennsylvania and Boston University identifies one of the most structurally dangerous dynamics in today's economy: the AI automation arms race. Each firm that replaces workers with AI captures the cost savings privately - while the demand destruction from lost wages spreads across the entire market. No single firm can stop first. The result is a trap that is rational for every individual actor and collectively catastrophic.
The Demand Trap explains the mechanism in plain language for executives, extends it with a second demand-destruction loop - the structural collapse of the per-seat SaaS model - and maps the combined impact across European markets, with specific analysis of the Nordics and DACH region.
This book covers:
- The Falk-Tsoukalas model explained for non-economists - what it proves, where its limits are, and why it matters now
- Why SaaS is structurally dead for horizontal tools - and which categories still have a defensible moat
- The data portability countdown: why the last line of defence has a 3-7 year clock on it
- Why Europe's welfare institutions cushion the impact but do not correct the incentive
- Who gets hurt first - demographic and sector risk mapped for DACH and the Nordics
- What a Pigouvian automation tax actually means and whether it is politically feasible in the EU
- Five concrete moves executives should make before the loops compound
Common fixes - UBI, retraining, wage subsidies - help workers. They do not change what firms do. This book addresses the level where the problem actually lives: the competitive incentive structure that drives the race.
The window to act is measured in years, not decades.
Henrik J. Nordgren is an independent enterprise technology strategist and author of the Nordic Qlik(R) Series, published by Nordic Tech Press.
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