By Greg MacSweeney, Wall Street & Technology
30 June 2010
Steve Rubinow, EVP and Co-CIO, NYSE Euronext, is familiar with innovation. Prior to joining NYSE, he helped to cofound and served as CIO for Archipelago, the all-electronic stock exchange that came out of nowhere to nearly overtake the NYSE in trade volume and liquidity. Once the NYSE realized that electronic trading was the future, it did what all large companies do — it bought the competition. But the exchange is at a disadvantage when it comes to competing for tech talent on Wall Street, says Rubinow, who also tells Wall Street & Technology editor-in-chief Greg MacSweeney that the state of technology innovation in U.S. financial services is just fine.
For a long time, many believed that the best and brightest technologists all went to Wall Street in search of wealth, rather than pursue engineering or software development, careers in which the salaries are lower. Is the tide finally turning?
Rubinow: It is a potential concern, with the reputational issues, and the layoffs, and the bonuses issue, and the tax issues — that scared people away. [But] when you read the papers, [Wall Street firms] are paying record bonuses. The best and brightest will still come. Has there been some shift? Probably. But I would like to see specifics. Money talks. The best financial engineers will still be compensated on Wall Street.
However, we are in bidding wars for talent. For instance, if we locate a bright software engineer, and we are in a bidding war with Goldman Sachs, unless the person wants to work for the NYSE, we can’t compete with Goldman. If they have the choice, it is hard for us to compete for the top talent.
When it comes to intangibles, this is a great place to work. This is a real life example. We have some excellent people here. The NYSE brand, and the things it represents — that counts for people. That counts, especially if they are making a difference. We have a great work environment, interesting problems to solve, and those help to create a work environment where people are happy.
Are domestic firms having trouble finding top tech talent in the U.S.?
Rubinow: We have always had this problem, no matter what the cycle. Even in downturns, there are a lot of average workers walking the street. The very best people are going to be held onto by their firms. So we have always had that problem.
We all want small groups of highly talented people. There are bright people coming out of universities, but there aren’t enough. It’s not like we are finding people in India or China — we don’t want to outsource this type of development.
What are the dangers of the United States falling behind other regions in terms of financial innovation?
Rubinow: I am not aware of the financial innovation focal point shifting away from the U.S., but as a global company with exchanges and technology operations around the world, we utilize our talent wherever it is. We believe in attracting top talent from everywhere, and that’s a core part of our fundamental approach. I look for innovation in everything we do, and I am not envious of any other region or country. The most innovate thought in finance is right here.
Do you have any concerns about the pace and rate of technology innovation in financial services?
Rubinow: As far as innovation goes, we have a good ecosystem here. With ourselves and our vendors and our customers, we have a good system for innovation. We don’t have a limitation of resources. Everyone gets it. Maybe I’m being shortsighted, but I’m not being frustrated with the ability to innovate. My frustration is with finding good people to do the work. We never seem to have enough good people.
Is the U.S. higher education system preparing enough software developers/engineers/technologists to maintain the pace of technology innovation in the U.S.?
Rubinow: My impression is no, but I don’t have any research. Outsourcing has scared off people. People read about there being no jobs in IT, or jobs being sent to low-cost labor areas. This has been going on for some time. This is true in financial services and sciences and engineering.
If we need to compete as a world power, we need to do it on brainpower. Our universities and employment and visa situation is not conducive to staying on top of the hill. The number of available visas has shrunk. It is certainly part of the problem.
Dean Kamen [inventor of the Segway] is founder of the U.S. First program (usfirst.org). He is disappointed in the education system for science and education. Kamen contends that if we continue this way, we will become a third-world country. Right now, only two kinds of people are glorified: celebrities and sports stars. He believes that if the schools and the media promoted science and engineering for the interesting and cool things that they can do, people would gravitate to it.
What should the U.S. government’s role be in supporting information technology innovation and the industry?
Rubinow: Taxes and incentives to do things in particular areas are important, such as to build incubation hubs. But referring back to education, it has to start at the lower levels of education to get boys and girls interested in sciences, and to let them know that there are a lot of things to do. Right now, people think it is too hard or “geeky” to go into science or engineering.
Which country or economic bloc presents the biggest and most immediate competitive threat to the U.S. as an information technology power?
Rubinow: I look at the sheer numbers of people in India or China. They have great schools and huge populations. They have large volumes of people going through the schools. If having a sheer number of talented people could push the innovation curve away from us, that is a concern. They might have an advantage in that regard, especially when they can have 100 engineers working on a problem, when we might only be able to have one or two.