Wall Street's collapse may be Computer Science's gain

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Finance is becoming a less attractive major for students

By Patrick Thibodeau and Todd R Weiss | Framingham | Monday, 20 October, 2008

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, says 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 says. 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, says 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 says.

After the dot-com bust, computer science enrollments began declining, reaching a low of 8,021 last year from 14,185 in 2003-2004, according to the US Computing Research Association (CRA) , which tracks year-over-year enrolment and graduate trends at 170 universities.

"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.

If the dot-com meltdown wasn't enough, offshore outsourcing also scared away students from technology.

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, vice president for academic affairs at the US Society for Information Managemento.

The big difference between today and the heyday period of the late 1990s is the type of student that businesses need, Luftman says. 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 says.

According to the US Bureau of Labour 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, says applications to the school dropped 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 says.

Bryant says 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 says.