Product engineers with strong industry knowledge do better problem solving in that domain
Product engineers with domain expertise are often better equipped to understand the nuances of the problems they are solving. This leads to more effective and user-centric solutions.
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Even if There are no best practices in complex systems, there are some common patterns between products in the same domain (think about regulated domains like healthcare), so there could be some best practice to follow in each domain.
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Having strong domain knowledge is also one requirements for Software engineers should be involved in product decisions