In a place long associated with finance and the wealth it creates, the latest employment data confirm that the future appears brighter in tech. Jobs in banking and securities have declined since the financial crisis while those in high tech have climbed, especially in the past few years.
For a generation weaned on risk and uncertainty, the challenges and opportunities in tech seem more attractive than those in financial services. Some of this is practical, given the layoffs, the greater share of compensation going to more senior people and the relatively quiet state of capital markets and of mergers and acquisitions deal activity. But the precipitous decline in finance's reputation has also contributed.
Finance was never a career to which betterment of the greater good could be attributed with a straight face. Goldman Sachs CEO Lloyd Blankfein's claim at the height of the crisis that his colleagues and he were 'doing God's work' was greeted with guffaws. The 'greed is good' era may still resonate with some, but surveys suggest, not with a majority of Americans, or anyone else.
While tech also has its share of selfish, meretricious behavior, the aura of innovation and excitement about pushing intellectual and technological boundaries is freighted with opportunity. That intelligence and success can be twinned with societal benefits makes it all the more attractive as a career move. The 'bright lights/big city' aspect of life in the Big Apple remains, but the means of attaining it is shifting, at least for now. JL
Suzanne Kapner reports in the Wall Street Journal:
People who have made the switch said the chance to build a business on their terms in a field that is less bogged down by regulations and layoffs outweighs the employment uncertainties and financial risks.
After graduating from Harvard in 2003, Vinicius Vacanti followed the money to Wall Street, where he worked for Blackstone Group LP BX +1.04%and Quadrangle Group LLC, two private-equity firms. Then, he heard Mark Zuckerberg, the founder and chief executive of Facebook Inc., speak at a conference and never looked back.
"The opportunity of my generation did not seem to be in finance," said Mr. Vacanti, who is now the co-founder of Yipit, an online-coupon site in New York.
Mr. Vacanti, 31 years old, is part of a wave of young professionals who are abandoning the pinstriped suits, outsize paychecks and cutthroat attitude of Wall Street for the geekier, more collegial world of technology startups.
To be sure, tech startups can be just as stressful as big banks. Many startups fail, leaving founders who financed the ventures with personal credit cards or second mortgages deeply in debt.
Over the past five years, New York City employment in securities and banking fell 10% to 163,600 jobs, compared with a 10% rise in high-tech employment, where jobs stood at 275,600 by mid-2012, according to the New York State Department of Labor.
The talent drift poses yet another headache for bank executives as they grapple with smaller profits, greater political scrutiny and an uncertain economy.
While Ivy League universities continue to churn out a steady stream of finance professionals, Wall Street is no longer the beacon of high pay and innovation it once was, thanks in part to a raft of new regulations, including those that curb compensation. Once idolized by some for its "greed is good" mentality, the Wall Street of today still faces a barrage of public criticism for the carnage unleashed during the financial crisis.
As a result, the grueling work schedules and stressful conditions of finance have become less palatable to some.
"You hear about the long hours in finance, but until you are working 18 hours a day, seven days a week, it's hard to understand how that will affect your psyche," said Matt Minoff, who worked for investment bank Allen & Co. from 2007 to 2009 and now is the chief executive of Selectable Media, a New York company that helps publishers use advertising to sell digital content.
Mr. Minoff said he still works long hours but he likes that he can tailor his schedule to his needs by, for instance, sleeping later after an all-nighter. He also said he is energized by the prospect of "building something new."
Beyond the obvious inducements of wearing jeans to work and playing the occasional game of foosball, former finance professionals said they wanted an environment in which decisions could be made without vetting by several layers of bureaucracy.
"Technology is collaborative. In finance, it's the opposite," said Darrell Silver, who worked for a hedge fund before starting Perpetually LLC, a web-archiving company in 2008 that he later sold to Smarsh Inc.
Mr. Silver's latest venture, an online-education company called Thinkful that he co-founded in 2012, is taking advantage of the employee bloodletting in finance. Several Thinkful classes are geared toward helping Wall Streeters find new technology careers, such as one advertised shortly after Citigroup Inc. C -0.06%announced plans to lay off thousands of employees late last year.
"Your new CEO recently laid off 11,000 of your peers, and shareholders are happy about it," read the ad for the 12-week course in Web development. Mr. Silver said he received 100 applications, with a large chunk coming from employees of big banks.
Tripti Singh, one of the students who enrolled in the class, said she chose finance for the job stability. "But every six months I've seen job cuts," Ms. Singh said. "I felt like I might be the one to go next time."
The shrinking pool of finance jobs is just part of the equation. On the other side is a concerted effort by New York City and other municipalities such as Detroit and Pittsburgh to attract tech startups by helping encourage the creation of seed capital funds and mentorship programs.
Eighty-two startups have received more than $10 million in financing since 2007 in New York City, according to the New York City Economic Development Corp. While the number of venture-capital deals declined both nationwide and in Silicon Valley for the five years that ended in the third quarter of 2012, they rose 52% in New York state, albeit off a smaller base, the development agency estimates. Some 13 incubators either have been launched or are under creation, while partnerships with Columbia University and Cornell University are expected to bring dedicated engineering and applied-sciences facilities to the city.
As a city's economy tilts toward technology, it can result in a large jump in productivity but also a shrinking labor force, given the added productivity tends to require fewer workers.
In the San Francisco metropolitan area, where this shift has been pronounced over the past decade, computer and electronic-product manufacturing accounted for 11% of gross-domestic-product growth in the region from 2005 to 2010, outpacing all other industries. But, rather than create more jobs, employment in that sector decreased 1.4% over that period, according to a study by the McKinsey Global Institute, the research arm of consulting firm McKinsey & Co.
With the employment outlook for finance expected to remain grim, more people like Ben McKean may head for the door. He was an investment banker for Merrill Lynch & Co. but left after its 2009 acquisition by Bank of America Corp. BAC 0.00%to cofound Savored, a website that allows diners to book restaurant reservations online that has since been acquired by Groupon Inc. GRPN -0.78%
"I thought about staying in banking, but after the financial crisis there was less work to do," Mr. McKean said.
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