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This work aims to shed light on an important topic that has begun to emerge in recent years, which is the economics of software engineering as a basic pillar in national development and confronting the competitive market challenges that characterize this industry. This work reviews the knowledge economy and its connection to the information economy and the digital economy. The background and generations of software engineering from the beginning of reliance on craftsmanship based on manual effort to professionalism based on superior skill and creative creative thought; He defined the field of software engineering characterized by distinguished human performance and the speed of change. He also defined this field from the perspective of organized, controlled and effective software based on the analysis, evaluation, description, design and development of software within the framework of management, quality, modernity, innovation and the availability of standards and skills. He explained the direct connection to computer science. It clarified the characteristics and dimensions of the software industry related to the industrial structure, education, development of qualified human resources, the distribution of software producing companies, their characteristics and sizes, and the integration of software systems and packages sold locally in the face of exports from them. The economics of software engineering was discussed from the perspective of making better decisions to create added value, monitoring and controlling dynamic investment in a better way, and the stages of development of competitive advantage related to leading production, investment, creativity, and wealth. It demonstrated the elements of practicing software engineering applications that determine the parameters of software production and the use of the capability maturity model. This work included the foundations of improving the economics of software engineering in terms of reducing size and reducing the degree of complexity, improving the development process, forming work teams and using integrated tools that use a greater mechanism, developing software within the framework of economic and technical feasibility; Advancement challenges related to cost, reliability, ease of use, and maintainability of the application were highlighted; This work ended with the conclusion of a set of governing results and some recommendations that are required to be adopted by adopting national tools and standards that are compatible with global ones.