Think before you leap. Your knowledge and training might be more useful in other industries. This is an interesting insight from a bloomberg columnist William Pesek: QuoteIn a sense, the U.S. reached a point where too many smart people were chasing riches managing wealth and all too few were creating it. When the history of this crisis is written and credit is accorded to those who presaged it, Bill Gates deserves a mention. The founder of Microsoft Corp. didn't predict today's turmoil the way Nouriel Roubini or Richard Duncan, author of the 2005 book ``The Dollar Crisis,'' did. He did warn of a shortage of engineers undermining the economy. If more young Americans pursued engineering and technology rather than finance, the U.S. would have a greater chance of maintaining its leading role. For now, the U.S. is shackled with a financial system heavy with many of its best and brightest wondering where their next bonus will come from.Link to the article Any comments?

Hi Its reality i guessWhy are you not updating your blog ?

too busy but i guess this is a good topic.

Yes you are right Things are looking more complicated DReam to Move Developed Financial Markets almost dead these dayspeople of Non developed countries who want to move to start their careers in developed countries definately feeling that

The problem with engineering is that if you work in a plant there is hardly any room for innovation,you get paid less.Unless finance comes to a level below engineering on an hour basis,people would still be chasing finance.The reason there is a financial crisis means there is a need for people with different skill set in finance.

I think it is true, but it begs the question of why engineers and scientists can earn still so much more in finance than industry or academia.It is in the nature of my work as a headhunter that I have a very broad view of people's path towards banking, and some clear issues arise.Industry pays engineers and scientists really rather badly. In many firms engineers aren't even allowed in "management" buildings unless invited. Look at IBM or GM. How many engineers on their boards ?If you subtract firms where engineers and scientists were part of the startup, one finds a depressingly small % in top managment of large firms.I know some quite distinguished engineers at household name at successful industrial firms. They earn pitiful amounts of money. Many PhD level enigneers retire on lower incomes than the average PhD starting work at a large bank.Acdemia is a risky career, tenure is very hard to get, many are on fixed term contracts without any benefits like pension or healthcare. The money is just awful, making a mockery of any notion of an "efficient frontier" of risk vs return.Also junior researchers are often treated with a level of contempt that makes the way JP Morgan teats technical staff look good.Banking has longer hours than many industries, but (for instance) several US software firms have been prosecuted for violating minimum wage laws because mediocre salaries pay for hours that make being a desk strat at GS look like a part time job.Technology jobs are precarious as well. That's not just offshoring and outsourcing but the fact that technology changes a lot.Many of you know that I teach C++ on the CQF. That's just sheer blind luck that my "home" language survived in a lucrative way.My skills in OS/2, Rexx, SGML, MIC, Lisp, Prolog and Pascal are worthless but each used to command a serious premium.I can program a modem as well, to a level where I ended up arguing AT command set standardisation with Dennis Hayes.That was impressive then, I guess most of you have no bloody idea what I'm talking about, and that is my point.Java is going that way, not because demand is dropping, but because supply is so high. Last night at the CQF info session I was talking to a couple of Java experts who were feeling the pressure already.That doesn't just apply to IT. I've learned that the nature of commercial radar work has changed big time, and classical engineering of physical objects from bridges to chairs to car wheels has hugely changed in the last decade.New materials regularly appear, and some old ones are actually banned. (When I was first introduced to asbestos, it was as a material that was required by law to be in some products and building structures.Ooops.I'm an old git, but I'm not that old. A career based upon technical skills is repeatedly risked with each wave of new stuff. My guess is that the frequency is about every 7 years. If you're in your 20s or 30s that's a lot of cycles to get through.You have to bet on which technologies to learn, get it wrong and you find yourself unemployable. Doing that every time is not exactly a good bet.Hands up those who want to be a pipeline engineer aged 45 with no employment prospects outside filling shelves in a supermarket ?Also last night I was talking with a former journalist who used to work for me (long story), who went off and did a PhD and is now going to do the CQF.Although working for a successful publication, the level of pay that I recall he got is probably lower than anyone here, and his was never going to rise.Banking has failed many of us in the short term, but don't let that make you think that other industries have greener grass.

QuoteA career based upon technical skills is repeatedly risked with each wave of new stuff. My guess is that the frequency is about every 7 years. If you're in your 20s or 30s that's a lot of cycles to get through.And these 7-year cycles are as predictable as clockwork. What is fairly constant and will be a demand for is 19th century mathematics and 1960's computing/numeric mindset, based on historical evidence. Of course, prediction is very difficult, especially the future. Quote... C++ .... That's just sheer blind luck that my "home" language survived in a lucrative way.How many more years to go before we all move to 'Z'??

The key is to be educated in the principles underlying the technology, rather than specialise too soon.In programming that may be OO (I'm not a programmer so i don't know).Likewise if you become educated in a wide range of mathematical tools, and are able to adapt to new ones on the basis of your knowledge, you will have the flexibility required.I think the optimal post grad for finance is applied maths or similar, you don't know what will be 'useful' in 5 years.Remember when science/maths/engineering courses use to have common entry?Nowadays you can apply for very specialised undergrad courses, which might be irrelevant by the time you finish.

people chase after money.an average engineer / scientist is underpaid compared to an average guy in banking.now one may ask, why are engineers / scientist underpaid?

so why are engineers / scientists underpaid???

Leverage, or rather being in a very poor leverage position.To the extent that any engineer is involved in making something, their labour costadds to the price and cuts into profit. When you consider that the products that exist outside of the financial world run on modest margins it isn't too hard to see thatcompanies see the cost of that pain in the behind engineer to be something thatneeds to be contained. Thus $10 of labour cost in a $300 product makes you a target.Now switch to that programmer working on a high speed trading system.Paying him $130k vs $75 doesn't matter a hill of beans since you are expecting tomake millions. Thus $20 of labour cost in a $100000 product makes you invisible.

Excelent comments, DFCC. Until we have a major shift in culture, engineering is bad deal IMO.I’ve worked both as an EE and in finance. Another big difference (other than the huge discrepancy in pay) is the level of ‘respect’ that each profession enjoys: engineer zero; PM/analyst/quant lots. In my 15 years as an EE, I always worked for clueless MBAs who viewed engineering as a lower level task. Engineers were replaceable cogs, and we were buried in useless process because we couldn’t be trusted to wipe our own noses. Finance is a totally different animal. In general, I strongly encourage young men and women to go into business, medicine, law, {something}. The applied sciences in the USA are just plain a bad deal. For proof of what I say, just look at the sea-o-cubes in any modern tech company and note the similarity to factory work of the 1950s.

QuoteOriginally posted by: billyroseso why are engineers / scientists underpaid???I am Chinese and I feel like what ever we do will be underpaid. We conquered C++, JAVA, HTML, quant etc.English is hard for us but we will make to it one day. When we succeed, lawyers and Hollywood screenwriters will be underpaid as well. I mean much lower than today.

I'd like to offer an alternate view. Experienced pipeline engineers in Canada (10 years) can get about 150k USD (no PhD), with good vacation while I recently saw an add for a PhD position risk manager with 10-15 years experience with an advertised salary of 150k. Additionally if you look at the CFA statistics Canadians (along with those from Singapore) are paid far less than their peers in the UK/NYC.Even in NYC from what i've read on this forum most 'quants' (or MFE grads or whatever you want to call them) make less than 200k and put in long hours.

QuoteOriginally posted by: DominicConnorI think it is true, but it begs the question of why engineers and scientists can earn still so much more in finance than industry or academia.One heretical thought is that someone that is good at math and science might generate more wealth in finance than in something else. One thing that amused me was that the people that talked about how the US needed more scientists and engineers and fewer finance people are all finance people and not scientists and engineers. If you think that it is good for the people that make major decisions to be able to count, and if you take it as a fact that people that control money end up making major social decisions, then it seems that you want people that are good at math and science to go into finance.