If you were a brand new graduate from a top tier university, you had a degree that made you a hot item and you could work anywhere at all, where would you choose? Say it came down to Wall Street or Silicon Valley – both of which offered pretty nice compensation packages – which would it be? For that subset of job seekers who are in this enviable position, the answer seems to be increasingly the latter.
My first thought, upon reading some of the recent stories on the flight of talent to Silicon Valley is that weather has to have had something to do with it. The last few eastern winters have been brutal (cold, snow, sleet, ice – it’s a smorgasboard that seems to last between December and April) meaning that sunny California looks especially nice. That’s a bit of narrow view, though. The story of who is choosing to go west is more about which industry – finance vs. technology – is really at the top of the economic pile, and which will get the best of the best in terms of resources over the next few years.
As this story from Quartz details, Silicon Valley is now siphoning up both high potential entry level workers and seasoned executives. The most high profile example of the latter is Ruth Porat, a former executive at Morgan Stanley who was sometimes called Wall Street’s most powerful woman – that is, she was before she pulled up stakes and headed to Google to be their CFO. On the entry level side of things, Google is apparently overrun with applicants. Although it did hire a solid 7,000 people last year, those were out of a reported 3 million applicants. Meanwhile, about 10 percent of graduates from the Massachusetts Institute of Technology now head for Wall Street, down from 31 percent in 2006.
So why is Silicon Valley the place to be? I’d say its partly about PR and partly about money, and together those things are changing the pecking order in terms of which is the most powerful industry in the U.S..
Wall Street’s – and by extension the finance sector’s – public relations problem is apparent. The economic crisis of 2008 is pretty fresh on a lot of minds, and the industry is still trying to change its image. One way it is doing that is through more regulation and a lowered appetite for risk – which honestly does not sound like the stuff of exciting projects. Silicon Valley, in contrast, still has the image of fun new things and a bunch of pirates creating the future (and some really cool watches). No contest there.
For the longer term, the industry that thrives is the one that will be able to attract financial as well as human capital – and that also looks to be tech. Yes, finance can offer some pretty hefty returns on investment but perhaps they will not be as lofty as they once were. In the meantime, Google may have missed the target in terms of last quarter’s results, but its stock price still suggests plenty of optimism about its longer term outlook.
As for the talent, they are apparently voting with their feet in choosing the tech sector – and the better climate is just a bonus.