Monday, May 14, 2012

Stanford and Silicon Valley

Ken Auletta writes in the New Yorker. I think Stanford is the only university with the long-run potential to compete with Harvard for global preeminence.
NewYorker: ... If the Ivy League was the breeding ground for the √©lites of the American Century, Stanford is the farm system for Silicon Valley. When looking for engineers, Schmidt said, Google starts at Stanford. Five per cent of Google employees are Stanford graduates. The president of Stanford, John L. Hennessy, is a director of Google; he is also a director of Cisco Systems and a successful former entrepreneur. Stanford’s Office of Technology Licensing has licensed eight thousand campus-inspired inventions, and has generated $1.3 billion in royalties for the university. Stanford’s public-relations arm proclaims that five thousand companies “trace their origins to Stanford ideas or to Stanford faculty and students.” They include Hewlett-Packard, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, Agilent Technologies, Silicon Graphics, LinkedIn, and E*Trade.

... There are probably more faculty millionaires at Stanford than at any other university in the world. Hennessy earned six hundred and seventy-one thousand dollars in salary from Stanford last year, but he has made far more as a board member of and shareholder in Google and Cisco.

Very often, the wealth created by Stanford’s faculty and students flows back to the school. Hennessy is among the foremost fund-raisers in America. In his twelve years as president, Stanford’s endowment has grown to nearly seventeen billion dollars. In each of the past seven years, Stanford has raised more money than any other American university.

... A quarter of all undergraduates and more than fifty per cent of graduate students are engineering majors. At Harvard, the figures are four and ten per cent; at Yale, they’re five and eight per cent.

30 comments:

RandomMedStudent said...

Dr. Hsu, it really depends on what you mean by global preeminence.  I went to a top Ivy League college and I once had a discussion with a friend that went to Stanford regarding what makes a university great.  My friend correctly pointed out that Stanford produces a lot more scientists and engineers, who go on to develop great things.  I quipped that my college produces a lot more bankers, lawyers, and politicians that may not create much wealth but certainly control lots of it.  My college has buildings names after prominent bankers - I guess Stanford has buildings named after IT people?

Rodrigo Guzman said...

Have you heard of https://www.coursera.org or http://www.udacity.com/? The former is an online university founded by Stanford CS profs.  There are a few other similar startups.  The common sentiment about SV types that I hang out with is that whomever starts giving meaningful credit to their students first wins.   This is probably the most important trend re:global preeminence of higher ed institutions.

Richard Seiter said...

The Coursera and Udacity classes are quite different in their approaches.  I think credentials will be important, but that is not the only important distinction.  Udacity is planning to offer final exams at Pearson testing centers worldwide: 
http://online.wsj.com/article/SB10001424052702303299604577326302609615094.html

highly_adequate said...

Frankly, until Stanford learns how to produce graduates who in aggregate are more similar to those of HYP, it's not going to compete seriously in societal prestige.

Those who make money on engineering feats are rather like the "new money" classes of yore: maybe smart in some narrow way, but regarded as crass, fundamentally uncultured and unsophisticated, and unworthy of positions of highest leadership.

RandomMedStudent said...

One way you can increase the societal prestige of the school is to select students who already come from high status families.  Of course, you also need to set aside enough room for the academic superstars as well.  Completely academic merit based admissions - like the system used in CalTech - will not produce a prestigious university.

steve hsu said...

Caltech's model will not allow it to compete with HPSM for the reason you mention, among others. (M has started aping HPS and isn't that much like Caltech anymore.) It's still a great institution for creating value for society, but it will never win the prestige or even the resource/endowment competition.

steve hsu said...

I know one of the Coursera founders. It will be very interesting to see how all of this plays out. It's not really a technology competition, though.

steve hsu said...

See my post Creators and Rulers.

RandomMedStudent said...

Is there a reason you leave out Y when you say HPSM?
It's true that M has started aping HYP.  It tried to strike a gender balance and limits the number of international students (mostly Asian).
Still, I know a girl in my med school class who went to M and whose sister went to Y.  Her perception is still that MIT students are more down to earth and tend to come from more middle class backgrounds, while Yale students tend to come from more old money families.  It is a sad reality that technology isn't a particularly prestigious field to be in. 

David said...

In order to be considered high class you have to do something you like all day.  Protestations to the contrary withstanding, nearly everyone sees tech/engineering as a boring thing nerds do because its the only way for them to gain status.  This was clearly demonstrated by Aaron Sorkin's take on Mark Zuckerberg is "The Social Network".  That's the mainstream view of tech guys, even if they make 100 billion dollars.

steve hsu said...

Y is weaker in STEM so it's a slightly different category of school.

steve hsu said...

Class and status are fun, but people with money have real power. Bloomberg, Jim Simons, Google founders, Zuck, Buffet, etc. all have something in common -- they are smart and they did/created stuff. The geek/nerd neg loses a lot of force as you get older. 

David said...

Sure.  I'm just pointing out the obvious, that "nerds" aren't going to get a lot of validation from the rest of the world no matter what they do.  Whether you make 100 billion dollars or not, you still need to find a way to generate self worth internally rather then from the approval of others.

BlackRoseML said...

A large part of "meaningful credit" is simply signaling the general intelligence the student intrinsically possesses, which is signaled by a prestigious college degree. Personally, I don't think college itself adds much value, since the value of the college is directly related to the talent of the student body (and the occupational connections that come from the perception of a talented student body), not the quality of instruction and education.

The "education bubble" is largely at the middle and the bottom; there is no "education bubble" on the high end. Since there no freely available niche of high-end higher education, since HPYS, tech-intensive colleges (e.g. MIT, Harvey Mudd, and Caltech), and "high" non-Ivy Private (e.g. University of Chicago, Rice, Duke, Vanderbilt) occupy them, it is unlikely that those educational start-ups would succeed.

RandomMedStudent said...

I have to disagree somewhat.  It's true that being a nerd isn't prestigious, but I don't think Zuckerberg or Gates have less prestige than say JP Morgan or Rockefeller.  What is unprestigious is being a value creator stuck in a lab or back office.  Running an IT company is not.

Richard Seiter said...

I think "I would say that those online universities need to screen out students based on their ability in order to be successful. " is a source of much tension in the Udacity and Coursera online classes.  Those classes that have (relatively) rigorous prerequisites or material tend to get substantial complaining about it.  IMHO that is one of the main differences between Coursera and Udacity at the moment.  Udacity seems to be striving to be more inclusive, while Coursera is less apologetic about putting real university courses online.  Both approaches have their benefits and I am glad both are being tried.  I think a big question is whether the online universities need to explicitly screen out students or can just rely on the material to do so (this is possible since the marginal cost per student is negligible).  I suspect the latter will suffice as long as it is possible to make the evaluation material resistant to cheating.

As to your other point, I think college can add substantial value at least in some situations.  I grew up in a non-intellectual small town and went to MIT.  I am fairly self-motivated, but would never have learned as much in an environment that wasn't filled with people as smart as or smarter than I am).  You allude to this with "the value of the college is directly related to the talent of the student body", but don't underestimate the value provided by an institution that gathers those students together in the first place.  Not that I disagree with the signaling theory, just that I don't think it explains everything.

David said...

JP Morgan and Rockefeller had a lot more prestige.  Those guys could have lead nations and armies if they wanted to.  They could get elected president.  That's the kind of gravitas and presence they have.  Those two would have done well in many eras. 

Bill Gates was born in a particular time, place, and system that allowed a nerd to get rich.  Change the circumstances and what does he have?  Yes, I suppose you could say that about anyone, but there do seem to be certain things that are valuable in every social era (namely physical & social dominance, charisma, will to power, etc) which guys like JP and Rockefeller possessed that tech nerds don't, even if they make a lot of money in an IPO.

Richard Seiter said...

I think "In order to be considered high class you have to do something you like all day" would be more accurately stated as something like: "In order to be considered high class you have to do something high class people respect all day."  I think plenty of nerds (speaking as one ;-) like the things they do all day just fine, it's just that high class people don't like/respect those things.  Also, don't underestimate how much people like to devalue things they aren't good at.

RandomMedStudent said...

I doubt if you can actually run a multi-billion dollar corporation with limited social skills.  Gates and Zuckerberg are both Harvard-educated ruthless businessmen.  Both also come from at least upper-middle class families and attended presitigious private high schools.  There certainly are nerds that strike it rich in IT - they come up with a great idea, develop it, and then sell it (think instagram).  But Gates and Zuckerberg are running/promoting their own companies.  I don't think Facebook or Windows could have taken off had Gates and Zuckerberg been just nerds.

JP Morgan and Rockefeller were both the new-money of their days, who came from humble origins and made their fortunes in railroads, oil, and finance.  Rich people prior to that era were largely hereditary land owners.  Both probably became large philanthropists at least in part to buy status - their business tactics were not positively portrayed by the media.

David said...

Eh, you can do it with a support staff and a patent and legal system set up to protect you and your IP.  That's the whole point about the eco system necessary for these guys to thrive.  Plop them down in medieval Europe and they get an ax to the face.

Steve Jobs is a much better example of a genuine leader.  His biological family has that history, so you know he could survive in other environments.  And he wasn't a nerd, but a dominant alpha a-hole who got nerds to do all the technical work by essentially bullying them.

David Coughlin said...

To pick a number out of the air, after 27, you are judged by your ability to make headway against the uncertain world.  You won't demonstrate this ability by executing structured curricula.  It might help prevent you from slipping out the back of the pack, but I don't think it gets you ahead.  I don't mean that critically.  I work hard to keep reading and working on new problems that are outside of my work expertise [investing the compound returns of intelligence, as it were], and I will probably try some of these classes.  I won't take credit for them on my resume, though, for example.

Edwin said...

 Why are you so obsessed with getting  validation from the rest of the world?Isnt that the true indicator of a lack of self worth?

Edwin said...

 New money eventually leads to old money with culture and connections.Where do you think their young will end up?

Noah28 said...

 fgag

Noah28 said...

 Caltech certainly isn't "completely academic merit based" in its admissions. It explicitly states in its Common Data Set that racial/ethnic status is a factor in admissions. It also says that alumni/ae relation is a factor in admissions, i.e. it has legacy preferences. And it's long been the case that Caltech uses gender in its admissions - last year, its acceptance rate for females was 23% vs. 9% for males. Many say that females are more "self-selecting," but I doubt that could account for all the difference in the two. Its gender ratio used to be 3:1 and has been steadily going down over the past few years, so Caltech has a good reason to use gender as a factor.

Noah28 said...

 What do you mean by "more similar"? As in, old money types?

Further, what do you mean by "societal prestige"? Gallup has done polls of colleges' prestige in the US, and Stanford was found to be second only in prestige to Harvard, and ahead of Yale and Princeton. Among college graduates, Gallup found Harvard and Stanford were indistinguishable in prestige (29% vs. 27%) and far ahead of all others. Surveys of international prestige have yielded the exact same results.

http://www.gallup.com/poll/9109/harvard-number-one-university-eyes-public.aspx
http://www.gallup.com/poll/3634/harvard-tops-gallup-poll-list-best-university.aspx
http://www.timeshighereducation.co.uk/world-university-rankings/2011-2012/reputation-rankings.html

Noah28 said...

Stanford has numerous buildings named after IT people - Hewlett, Packard, Gates (Microsoft), Allen (Microsoft), Yang (Yahoo), Huang (Cisco), Moore (Intel), and others.

Noah28 said...

 Oops, that should read "Huang (NVIDIA)."

Anthony_A said...

"Five per cent of Google employees are Stanford graduates."

Is that all?

And what does that count? BA/BS from Stanford? Any degree from Stanford? Terminal degree (including ABD?) from Stanford?

When I look up my friends who work at Google, there are far more who went to a U.C. than to Stanford, interestingly enough. U.C.'s engineering schools turn out graduates just as capable as Stanford's, though due to state rules, their faculty aren't going to get rich in the way a Stanford prof can, so Stanford doesn't face significant competition from and U.C. for prestige.

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Some people are smart and some people are dumb.

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