When I grow up I want to be...

When I was growing up in Dublin in the early 1980s, my uncle Jim regularly asked me what I wanted to be when I grew up. Jim worked for the insurance and pensions company Prudential, or "the Pru" as he would proudly say in his thick (ish) Northern Irish accent. He was a great advocate of his job, but suggested that I'd make a good lawyer, disturbingly because he thought I could lie well. I used to tell him that I wanted to be a train driver.

Over time, I lost my focus and variously moved through aspirations to play for Manchester United, to wanting to be a professional golfer. In fact the only unifying thing that I can think of was that I wanted to do something that was its own end, meaning that I wanted to score the winning goal in FA cup final, not to be the coach. Later as i moved through the latter stages of school and then on to university the reality dawned somewhat that a) you are slow and can't hit a barn door from 15 yards with a football, or a golf ball for that matter and b) that train driving may not be the lucrative sort of job that will make you a "catch" with the girls you are trying to impress, or help fund the lifestyle that James Bond seems to make look so compelling.

The prolific US bank robber Willie Sutton was once asked by a journalist late in his life:
"Willie, why did you rob banks?" to which he responded quite reasonably "...'cos that's where the money is."

Although I'm keen not to draw a direct parallel between myself and Willie Sutton, the truth is that when I was moving through the latter stages of an economics degree at university the most appealing places to work were investment banks. Cos that was where the money was. The milkround was full of glamorous looking, seemingly big hitters who were only a couple of years older than me. They were living the work-hard, play-hard, moneyed lifestyles that seemed to be an attractive kickstart to the ultimate journey towards success, whatever that was. A couple of years later I found myself returning as one of these people on recruitment trips for Lehman Brothers amongst the Dublin graduates, feeling a bit like the "boy done good" and advocating the banking lifestyle to the current crop of the best graduates that Dublin had to offer. My sister still, rightly, takes the micky out of one of the presentations that we gave in Dublin, where one of the senior Lehman guys spoke of new graduates having an immediate impact when they start their careers for Lehman - the phrase he used was "flying your desk". Worthy of micky taking, to be fair.

The world for university graduates of 2009 will be very different. Across the board graduate recruitment by investment banks will either be non-existent (Lehman for one) or scaled back to almost nil. For the best and the brightest from undergraduate and the MBA universe, things must seem pretty confusing. The Dean of the Harvard Business School was quoted last year saying that he would only buy shares in the US stock markets again when the percentage of his MBA students going into investment banking jobs was less than 10%. Last year it was 41% of the class that went to investment banking jobs. The forward looking statistics for this year showed that 45% of the MBA class were targeting investment banking jobs; albeit that these statistics were put together before the full extent to the current financial mire was known. The statistics for 2009 may well tell a different story.

The point of view the Harvard Dean was trying to express was that banking was always meant to be the facilitator in real business, being the coach, not the goalscorer, i.e. not the end game in itself. A crucial part of the economic jigsaw, but in my view and his not the most important. Banks move capital around the system to the places where that capital is going to get the best reward for a given level of risk. A lot of the time they aren't very good at this. What they don't do is make the widgets, cars, baby-shuffles (whatever they are) that improve the quality of life of people in the world. "Non-financial" companies do that. Banks cannot create jobs in and of themselves, they only exist because of the ambition and entrepreneurship that exists amongst these non-financial companies. Banks facilitate these companies growth by organising their financing requirements, and the banks should do well when their clients do well, but not the other way round. If the movers and shakers that were coming out of Harvard were aspiring not to be creating or joining great non-financial companies, but more to be facilitators of others who ran great companies then there was something at issue. Why had we found ourselves in a situation where instead of being the person to hole the putt to win the Open, the aspiration was to be the proverbial caddy?


The answer was 'cos that was where the money was', and the ability to create that sense of achievement within that "caddying" part of the economy. The ability of investment banks to pay starting salaries of $150,000 to MBA graduates, with potential for bonuses, and for the real prospect of earning many hundreds of thousand or even millions of dollars within a 5 year period, was hard to baulk at. That world no longer exists. I would predict that we will see a reversal of the trend, back to the way it was when my Dad finished his MBA at the London Business School in early 1970s.The jobs to be getting then were with industrial companies, who made real things themselves.

A positive point amidst the changing scenery is that many of the worlds great companies were formed at times of high economic stress. Microsoft is an excellent case in point. The capacity for the brightest minds coming out of top level education to come up with new ways of creating their own version of success is likely, I think, to be fuelled more at this time than when it was 'easy' to slide into a well paid banking job and thrive financially that way.

In an interview with the FT this week, the Chief Executive of Cobham, the UK aerospace and defence company, was asked: "Do you think this crisis shows that the UK has become too dependent on financial services?" Alan Cook responded: "We employ about 300,000 people in the industry in the UK, either through the supply chain or through original equipment manufacturers. From our point of view, we're really dependent upon recruiting some really key talent from universities and from further education. I see this as a window of opportunity, because in the past 10 years students have been encouraged to join banks and brokers with the desire to earn vast sums of money, huge bonuses and a glittering career. I think maybe we've suffered from that. Now we're looking at turning round to our graduates and young people and saying look, this manufacturing and engineering is a fantastic opportunity for you. Grasp it, take it, this is where the careers are."

As something to be impressed by, or to be proud of, maybe it would be more impressive dinner party conversation in Notting Hill to say - "I helped design the Eclipse 750 jet, which we flew from London to Courchevel for our family ski trip last half-term" rather than "I helped facilitate the design of the jet that we flew last week, by lending the money to the smart people who knew what they were doing."