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Comment by adamtmca | Hacker News Reader

This is one of the benefits Iceland's prime minister claimed came from letting their banks fail -- more physicists, programmers and engineers moving from finance into technology.

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Hmm. What kind of industry does Iceland have that requires 'physicists, programmers and engineers'? With a population in the hundreds of thousands, smaller than even medium sized cities in most countries, how much opportunity is/was there for these people? It's not even big enough to sustain a serious university, let alone a real r&d environment. Using Iceland as an example for other countries is usually fallacious, because it's so unique.

Your assumptions are understandable, but let's have a closer look:

* What kind of industry does Iceland have that requires 'physicists, programmers and engineers'?

The same kind of industry that requires physicists, programmers, and engineers anywhere else: R&D, software engineering, tech sector in general. (See next answer.)

* With a population in the hundreds of thousands, smaller than even medium sized cities in most countries, how much opportunity is/was there for these people?

The population size doesn't define the size of the economy - the natural resources and infrastructure do. Iceland is a pretty large island that controls a huge swath of ocean around it that has valuable fisheries in it. Plus there's geothermal energy etc. etc., so the country is very rich.

* It's not even big enough to sustain a serious university, let alone a real r&d environment.

That's simply not true. Iceland has pretty significant research output in biology, genetics, computer science, geothermal and hydropower engineering, etc. etc.

* Using Iceland as an example for other countries is usually fallacious, because it's so unique.

:) That's certainly true. In a way. But people are people, nations are nations, good ideas are good ideas, and pitfalls are pitfalls.

> What kind of industry does Iceland have that requires 'physicists, programmers and engineers'?

Eve Online. No, really. It's Iceland's third-largest export. (See e.g. http://www.eurogamer.net/articles/2011-04-04-eve-online-real...)

Right, that confirms my point - if a niche MMORPG is the third-largest export, that means that opportunities in science and r&d are scarce.

What I meant is that the opportunities are at Eve Online. If you're the third-largest exporter, you do make up a large part of the employment market. Sure, it's a small market - but it's still a large chunk of that market.

And Eve is more than just a bunch of hackers - heck, they employ a lead economist. (http://www.scientificamerican.com/article.cfm?id=virtual-wor...)

Yes, I understand what you meant, but your example doesn't scale. OK so there is one (1) position for an economist at a game company. There were hundreds if not thousands of positions at banks before the collapse. How can this minister say that letting the banks fall over was good for employment, or at least that the people who had to go looking for other jobs could now go do more meaningful ones?

Presumably, there's whatever opportunity they make for themselves.

I'm an Australian. There's bugger all opportunities here, because there's no VC. There's no VC, because the domestic market is too small, and the nearest international trade partner worth speaking of is on the other side of the Pacific Ocean. Oh wait, there's also Japan, and now China and India, but they are kind of emerging, and there's cultural differences. (Note the sarcasm).

VC won't come to smaller markets until startups start proving that they can operate in a globalized environment, and they won't do that by sulking, hoping the government will give them all cushy subsidized finance jobs.

if you like me believe that physical borders mean less and less, then I thinks it's easy to see why the parent commenter said what he said.

Well yes, they do mean less and less, but in the context of the quote, that's exactly what makes the argument moot. To be more concrete, Iceland didn't benefit from having bankers and quants in Reykjavik become programmers in Silicon Valley. Actually quite the contrary. His claim only makes (some) sense in a global, moral context - i.e. when one starts with the assumption that bankers don't add value, then defaulting meant getting rid of the bankers, hence a net positive. But pragmatically, from the point of what was better for Iceland, I don't get it.

The argument makes a lot of sense economically: patronage of banking vs resource reallocation.

This tells us, of course, that bankers didn't add (enough marginal) value. Which was probably true, given that they defaulted. Iceland profits from not calling with a shitty hand (i.e. bailing out stupid banks). No "bankers are evil" morality needed.

Perhaps because the change in attitude benefit because some of those people will stay home and not go to SV.

In fact most people most probably wont go to SV.

I wasn't "using Iceland as an example for other countries" or trying to imply that the Americans should have let their banks fail. I was simply relaying a quote which suggested that the expected result of declining pay on Wall street had also been observed in another country.

They smelt aluminium and generate electricity from geothermal sources. Because of abundant source of energy, Iceland is potential location for many power-intensive industries.

But not at such a scale that they can suport a lot of new profesional level jobs.

Yes there are not that many jobs in the Geothemal Energy that you can transition to - which is about the only physics/engineering Based industry that Iceland has.

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