New York is investing in financial startups to make sure technologists and new ideas stick around.
After banking deregulation took off in the 1990s, it became “exciting and sexy to say you were working on Wall Street,” says Bruce Bachenheimer, clinical professor of management and director of entrepreneurship at Pace University. Money and prestige helped lure top academic talent, including mathematicians and computer scientists, to hedge funds.
But that has changed, beginning with 2008 and the financial meltdown.
“The perception of working on Wall Street went from positive to negative,” Bachenheimer told Erik Sherman, author of the article, “Wall Street’s Search for Innovation,” published in MIT’s Technology Review on March 16. Wall Street reached its latest low this week when a Goldman Sachs executive resigned and publicly excoriated the company’s ethics in a New York Times op-ed.
Meanwhile, places like Silicon Valley, Boston, and other hotbeds of high tech suddenly look like the most attractive places to be. With the recent spate of Web-company IPOs, technology startups are also potentially a faster ticket to wealth than Wall Street, where bonuses fell 14 percent last year, continuing a multi-year slide.
“Perceptions of desirability are very important in entrepreneurship. [Technologists] want to go where the action is and want to be doing cool stuff,” says Bachenheimer.