Softwae is capital-intensive as well in that it usually takes a significant amount of labor to build out a product to the point where it can generate revenue. Just because the capital tends to be paid out in salaries instead of purchases doesn't make it capital-cheap.
That's a really insightful comment that has turned my thinking on this area of economics on its head. It sounds like any business is capital intensive if it involves paying lots of people high salaries in order to do it, even if the salaries are the business's main cost.
Of course, software development doesn't have to start out capital intensive. A couple of kids working on their startup in a cheap apartment can work cheaply. They can defer the capital intensive part until they are successful. An airline doesn't have that option.
Capital is not necessarily money paid. If those two kids have the talent to create a successful website they are incurring opportunity costs due to the fact that they could be earning a decent salary with those skills rather than creating a startup.
Yeah, but the 'stair steps' are way smaller. To start an airplane business, you need to go in with some big bucks to get things off the ground. To start a bingo card business or a bug tracking system or a project management system or a lot of other things, you can get by with a lot less, and ramp up as needs be.
