Wall Street's losses may be computer science's gain
- 02 December, 2008 07:04
The collapse of Wall Street may help make computer science and other IT careers attractive to students who abandoned those fields in droves after the dot-com bust of 2001.
William Dally, chairman of the computer science department at Stanford University, says that for the past several years, he has watched some students interested in technology go into banking and finance because those fields could be more lucrative.
"Many thought they could make more money in hedge funds," Dally says. He notes that students are returning to computer science because they like the field and not because it will necessarily make them rich.
The dot-com era was a wonderful time to be young, computer-savvy and in search of stock-option riches. Wall Street poured billions of dollars into hundreds of companies that were making little or no money. For instance, Webvan Group, a grocery delivery firm, that was founded in 1997, had so much money that it bought a rival, HomeGrocer, in 2000 for US$1.2 billion in stock. Webvan ceased operations and filed for Chapter 11 bankruptcy protection in 2001.
If the dot-com meltdown wasn't enough, offshore outsourcing also scared students away from technology. In 2004, Carly Fiorina, then CEO of Hewlett-Packard, summed up the offshore trend this way: "There is no job that is America's God-given right anymore." Fiorina recently served as an adviser to Republican Sen. John McCain in his bid for the White House.
Today, companies are suffering from a shortage of technology professionals, and baby boomer retirements will only add to the problem. "The pipeline is inadequate for IT professionals," says Jerry Luftman, who is involved in academics and business as associate dean at Stevens Institute of Technology's Howe School of Technology Management. He is also vice president for academic affairs at the Society for Information Management.
The big difference between today and computer science's heyday in the late 1990s is the type of entry-level IT employee that businesses need, Luftman says. Technical skills are still important, but businesses also want to hire recent graduates with management and industry training, as well as strong communication, marketing and negotiation skills, he explains.
According to the US Bureau of Labor Statistics, IT is among the fields that are seeing the fastest increases in the number of jobs. On the top of the BLS's list of fast-growing job titles is network systems and data communications analyst. The agency's projections call for the number of those jobs to grow from 262,000 in 2006 to 402,000 in 2016. Meanwhile, the number of jobs in the "computer software engineers, applications" category is expected to increase from 507,000 to 733,000, while the number of database administrators will rise from 119,000 to 154,000.
Page BreakRandal Bryant, dean of the School of Computer Science at Carnegie Mellon University in Pittsburgh, says his school saw student applications drop from a peak of 3,200 in 2001 at the end of the dot-com boom to a low of 1,700.
But the situation has been turning around, with 2,300 applications coming in last year, he says.
Bryant says he expects the troubles on Wall Street to influence some students to switch majors from business to other fields, including computer science. But he urges caution.
"I like to tell students that if you make your career choice that quickly based on what is hottest this month, you're going to be graduating in four years, and that field may not be hot anymore," Bryant says. "I tell them to major in something they like and not what's a likely short-term fluctuation in the job market.
"Our peak at the dot-com [period] included people in computer science who had no particular aptitude in it," he adds. "But they thought they'd get rich."