The return to coding bootcamps may not remain so high forever

We have been positive about learning to code as a way to gain useful skills for earning to give or doing directly valuable work, and promoted software engineering as a career path.

We are not the only ones who have noticed that this is a pretty great opportunity. From the LinkedIn blog:

Technical talent is in high demand. As of publishing this post, a LinkedIn job search for “Software Engineers” in the US reveals more than 100,000 open jobs. Adding a couple more tech-related roles (“User Designer,” “Data Scientist”) increases the total to more than 200,000 job openings. Job seekers looking to meet job requirements can enroll in a Master’s degree program, but that comes with a 2-year opportunity cost. Now, a shorter path is emerging: fully immersive coding bootcamps.

Coding bootcamps typically last 6-12 weeks and require participants to show up to a class in person. Bootcamps are a relatively new model, but they’re a growing trend that could help close the skills gap. Tapping into the Economic Graph, we compiled aggregated data on over 150 bootcamp programs and more than 25,000 LinkedIn members who have indicated they are attending or have attended bootcamps to identify emerging trends.

The growth is fast enough and significant enough to potentially lower wages for software engineers:

In 2011, fewer than one hundred LinkedIn members indicated they had graduated from bootcamp programs. In 2014, more than 8,000 members completed coding bootcamps and added them to their profiles, reflecting a rise in acceptance of the bootcamp model. The number of bootcamp graduates in the first six months of 2015 has nearly surpassed all of 2014. At this rate, we can expect to see more than 16,000 graduates by the end of 2015 — more than double the total number of 2014 graduates.

In 2012, there were nearly 80,000 STEM field Master’s degree earners in the US, according to the National Center for Education Statistics. So as far as educational models go, the coding bootcamp (with 16,000 graduates expected globally this year) is still in its infancy. Still, initial signs show promise. We’ve seen their impact firsthand through our partnerships with organizations like Year Up. More and more members from all corners of the globe are using this non-traditional pathway to enter into the tech industry.

We’ve noted before that wages in skilled professions can be quite volatile because it takes people time to train up and move into them.

It could be that growth in demand for people with these skills will continue to rise as quickly as bootcamps and universities can supply them. But as many economists have noted, large tech companies can scale to supply services to billions of people with an almost fixed number of coders. This is a reason to expect demand for coders to increase more slowly relative to the growth of the sector, or at least depend on the number of different software products produced, rather than the number of people using them.

Given the excellent opportunities this path provides relative to alternatives, and the ease with which tens of thousands of people are transitioning into it, we think it’s more likely than not salaries will decline in 10 to 20 years relative to other careers coders could pursue. This isn’t to say it doesn’t remain a great option compared to most other careers, just that it may not remain as great over a career spanning several decades.

We’re also definitely not at the bottom of the technology market (though who knows whether we’re at the top or not). If a bust does come, new coders will find it significantly harder to get placements, and the returns to bootcamps won’t look so good, at least for 2-7 years until we recover from the recession.

Dow Jones U.S. Technology Index - Google Finance
Dow Jones U.S. Technology Index – Google Finance

Be aware of these risks before entering the sector.