Wall Street's Losses May Be Computer Science's Gain

Talent migrates from IT to hedge funds and back again.

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.

Newly declared computer science majors

Year Total
1998 13,900
1999 13,798
2000 15,958
2001 14,559
2002 13,809
2003 11,475
2004 9,749
2005 7,952
2006 7,840
2007 7,915

The Computing Research Association's Taulbee Survey indicates that the recent decline in hte number of new computer science majors* may have bottomed out.

* At 170 Ph.D.-granting institutions. Source: Computing Research Association's Taulbee Survey; the 2008 survey is still under way.

"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 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 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 Co., 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.

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