Wednesday, May 28, 2014

The Developing Bubble In Coders

From the Acting Man blog:

Computer Science Enrollments Explode

Techcrunch had an interesting article about the explosion of freshmen deciding to study computer science. There can be no doubt that this type of knowledge is currently in great demand – however, we do believe that there are some signs that the boom is so to speak 'getting out of hand' and is beginning to reflect the effects of the technology echo bubble on Wall Street.

The give-away is the size of the demand for computer science studies relative to other fields of study. Even if computer technology and everything connected to it is steadily increasing in importance, this looks like 'bubble behavior' to us. Let us not forget,  vast increases in the money supply and the concomitant suppression of the natural interest rate are mainly reflected in the higher order stages of the economy's production structure, and investment in 'human capital' is definitely a very 'high order' stage (meaning: it takes a very long time before the investment actually bears fruit and produces an income).

New enrollments in computer science vs. other studies – click to enlarge.
People may be inclined to instinctively judge that it can only be good if so many young people decide to study something 'useful' as opposed to, say, art history or literature. However, as Mish has recently pointed out, the widespread yammering about a 'skills shortage' is actually misguided (he provides a few additional links to recent press reports on the topic that are well worth checking out as well). There is in reality no shortage of workers skilled in science and engineering....

Meanwhile the CodeAcademy blog suggests:
Making Code the Universal Language
So there you go, problem solved.
It's not a bubble if you mentally move it from the School of Engineering to the College of Liberal Arts and don't plan to make a living off the skill but rather the encoded content.