Wednesday, March 28, 2007

A few billion beats two years at Harvard

Thirty years late, this June Bill Gates is getting his undergraduate degree from Hahvahd. Except of course it’s an honorary degree he’ll get in exchange for being the commencement speaker.

[Bill Gates]This is the standard quid pro quo to attract commencement speaker. Of course, Gates has long ties to Harvard. During his 2+ at Harvard (1973-1975), he and classmate Paul Allen used the school’s PDP-10 to write the Basic interpreter that was Microsoft’s first product. They never paid Harvard for the computer time, but in 1996 Gates and classmate Steve Ballmer (A.B., Harvard, 1977) gave Harvard $25 million to build a new computer science building.

Since I became a college professor, I often get hassled by industry friends who say “look at Bill Gates, Steve Jobs and Michael Dell. Why does my kid need an education to succeed?” My own experience is somewhat consistent with that view, after 20+ years as an engineer and manager in software development without any coursework in computers (only an S.B. in meteorology).

My answer is in two parts. First, education increases human capital (teaches you something) and social capital (helps you make connections); that’s why people pay to get degrees. Second, from sitting on both sides of the recruitment table, normally someone who dropped out of college (or didn’t go to college but wants a professional-technical career) sends the signal that you don’t finish things, which is a bad signal to send.

Against this, there are rare times when the opportunity cost of staying in school is very high: Gates, Jobs, and Dell are testament to that, as were a number of entrepreneurs (many of them unsuccessful) during the dot-bomb era. But Steve Wozniak and went back to Berkeley and finished in 1986, while Sergey Brin and Larry Page remain on leave from the Stanford computer science Ph.D. program.

Hat tip to Todd Bishop and his invaluable Microsoft blog.

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