Ryan Buckingham, a particle physicist with a PhD from Oxford University, spent three and a half years at CERN before joining Goldman Sachs in London as an associate in the credit and mortgage structuring team earlier this month. … Buckingham isn’t the only CERN alumni working in finance. Alexey Afonin, a vice president in strats and modelling at Morgan Stanley used to work there too. So did Anne Richards, the chief investment officer at Aberdeen Asset Management. So did Nikolaos Prezas, a quantitative researcher at J.P. Morgan and plenty of others. Most people seem to work at CERN early in their careers, and then move into finance.
He said a lot of ex-CERN employees move into banking because they’ve done their time on the collider and need something else to do when a permanent contract isn’t available. However, there is no indication that this happened to any of the finance professionals named above, and it seems that a move to a large international financial centre can in any case provide welcome respite to years living in Geneva or the Swiss-French countryside. “CERN is a bit of a weird place,” said the ex-CERN banker we spoke to, “- it’s very insular and incredibly competitive.” Not like banking at all then.
I have written previously about possible problems in America’s entrepreneurial culture. A 2011 Kauffman Foundation study looked at the possible impact of the US financial sector’s expansion on fast-growing young companies and the entrepreneurs who found them. In particular, it looked at the brain drain issue of big banks scooping up the best and brightest, thus lowering the quality of US startups:
The financial services industry used to consider it a point of pride to hire hungry and eager young high school and college graduates, planning to train them on the job in sales, trading, research, and investment banking. While that practice continues, even if in smaller numbers, the difference now is that most of the industry’s profits come from the creation, sales, and trading of complex products, like the collateralized debt obligations (CDOs) that played a central role in the recent financial crisis.
These new products require significant financial engineering, often entailing the recruitment of master’s- and doctoral-level new graduates of science, engineering, math, and physics programs. Their talents have made them well-suited to the design of these complex instruments, in return for which they often make starting salaries five times or more what their salaries would have been had they stayed in their own fields and pursued employment with more tangible societal benefits.
If you believe the US is currently operating a pro-megabank industrial policy, then what we have is a misallocation of human capital that hurts US growth and innovation.