The collapse of Wall Street may help make computer science and IT careers attractive to students who abandoned these fields in droves after the pop of the last big bubble, the dot-com bust of 2001.
William Dally, chairman of the computer science department at Stanford University, said that for the last 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 said. He said students are returning to computer science because they like the field and not because it can necessarily make them rich.
John Gallaugher, associate professor of information systems in the Carroll School of Management at Boston College, said he's already seeing a shift in student interest.
"Students have commented to me and written on their course wikis that they're considering changing from finance [majors], both based on the appeal of IS and concern over availability of finance jobs" in the future, Gallaugher said.
After the dot-com bust, computer science enrollments began declining. The number of bachelor's degrees in computer science awarded at 170 Ph.D.-granting institutions reached a low of 8,021 in 2007, down from 14,185 in the 2003-2004 academic year, according to the Computing Research Association (CRA) in Washington.
"Current economic conditions seem to impact the choice that students make in the majors they choose -- that has been true for computer science," said Jay Vegso, a CRA analyst who studies computer science enrollment trends. "Students who are now choosing majors might be looking for safer alternatives," he said, and IT may be a safer alternative.
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 Inc., a grocery delivery firm in Foster City, Calif., that was founded in 1997, had so much money that it bought a rival, HomeGrocer, in 2000 for $1.2 billion in stock. Webvan ended in Chapter 11 bankruptcy in 2001.
If the dot-com meltdown wasn't enough, offshore outsourcing also scared away students from technology. In 2004, Carly Fiorina, then CEO of Hewlett-Packard Co., summed up the offshore trend this way: "There is no job that is America's God-given right anymore." Fiorina is now 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," said Jerry Luftman, who is involved in academics and business as associate dean at the Stevens Institute of Technology's Howe School of Technology Management in Hoboken, N.J., and vice president for academic affairs at the Society for Information Management in Chicago.
The big difference between today and the heyday period of the late 1990s is the type of student that businesses need, Luftman said. Technical skills are still important, but businesses also want to hire students with management and industry training, strong communications abilities, marketing and negotiation skills, he said.
According to the U.S. Bureau of Labor Statistics, IT jobs are among the fastest growing. On the top of the bureau's list of fast-growing career areas is network systems and data communications analysts, which it is forecasting will grow from 262,000 jobs in 2006 to 402,000 jobs by 2008, a 53% increase. Computer software engineers, applications, is expected to increase from 507,000 to 733,000 or 45%; while computer scientists and database administrators will rise from 542,000 to 742,000, a 37% increase.
Randal Bryant, dean of the School of Computer Science at Carnegie Mellon University in Pittsburgh, said his school saw student applications drop to a low of 1,700 from a peak of 3,200 in 2001 at the end of the dot-com boom.
But the situation has been turning around in the past few years, with 2,300 applications coming in last year, he said.
Bryant said he expects that the troubles on Wall Street will likely influence some students to switch majors in the coming months from business to other fields, including computer science. He also urges caution to those students.
"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 said. "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, but they thought they'd get rich," he said.