Is Tech Losing 'Best and Brightest' to Finance?

Ann All

A few months ago, I cited a New York Times article in which Google Chief Economist Hal Varian said statistician would be a "sexy" job in the next decade. According to the article, those with doctorates in mathematics or related fields could expect to pull down six figures in their first year on the job and pretty much write their own career tickets.


Career possibilities mentioned in the article included improving online search algorithms for a company like Google, analyzing gene sequencing information for possible insights into curing cancer or examining sensor and location data to help streamline retail supply chains.


Instead of looking for a cure for cancer, they could work in finance and devise the same kinds of complicated models that some observers fault with creating a kind of financial Ponzi scheme that left banks burdened with bad debt and triggered the global economic crisis from which we have yet to recover.


Writing on The Huffington Post, former bank regulator William K. Black, author of "The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry," says folks with advanced mathematics skills pursue careers in finance rather than technology or health care because the money is so much better in banking. He writes:

We take people that could be conducting the research & development work essential to the success of our real economy (including its success in becoming sustainable) and put them instead in financial sector activities where, because of that sector's perverse incentives, they further damage both the financial sector and the real economy.

In late 2008, one venture capitalist reached out to unemployed finance workers by creating a site called LeaveWallStreetJoinAStartup.com, listing job openings at seven of its portfolio companies. But now with at least some banks bouncing back, fewer numbers crunchers may be looking for careers outside of finance.


Black also faults the finance sector for emphasizing short-term gains rather than long-term stability. So instead of loaning money to entrepreneurs and companies with innovative ideas, which could give the economy a real boost, it instead offers capital to companies that produce quick profits on paper.


I got a similar take from Forbes columnist Sramana Mitra, a strategy consultant in Silicon Valley who has founded three companies and written several books, when I interviewed her in August. In her latest book, "Bootstrapping: Weapon of Mass Reconstruction," she suggests entrepreneurs should strive to be self-supporting rather than relying on venture capitalists, which like banks, focus too much on short-term profitability. She suggests the government could reduce unemployment and spur a lasting economic recovery by offering more economic incentives to entrepreneurs.


She'd like to see funds similar to 401k accounts, where folks could set aside tax-free money for entrepreneurship. She said:

... a bootstrapped venture can go after any opportunity. A $10 million opportunity is just fine for a bootstrapped venture. And you can employ 1,500 people with a $10 million company. I think that's the kind of company America needs in hundreds of thousands right now. There are a lot of niche opportunities in technology where you can build $2 million, $5 million, $15 million businesses. Venture capitalists would never touch those!

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