On January 20th 2017, Donald Trump became the United States of America’s 45th president and has since run an office mired with controversy. From opposing net neutrality to imposing immigration bans, Trump’s actions could quickly have a negative affect on the US tech sector.
Net neutrality is the idea that internet providers should provide equal access to all kinds of content - without it, providers could implement pricing structures based on user, content, website, platform or application. As an example, users of streaming services such as Netflix could theoretically be charged more than non-streaming services or sites, as could web users who view websites with a different country code domain.
Tech leaders have spoken out about fears that President Trump will unravel existing net neutrality regulations and reform privacy rules. In an article for The Atlantic published in late 2016, resistance to Trump from the tech community was described as “widespread and powerful”, noting that the president-elect and Silicon Valley leaders “are foils, with contrasting values, interests, and visions for the future”.
Trump's biggest impacts on the tech sector are likely to be his attacks on net neutrality, which has immense and massive harmful potential.Rand Fishkin, founder and CEO of Moz
Fishkin continued, "net neutrality prevents all sorts of nefarious behavior that harms consumers and small businesses. Loosening restrictions on neutrality means that ISPs can charge tiered rates for different levels of access to the web (which would almost certainly mean a drastically smaller web audience for new sites, small sites, and those that can't afford to pay the ISPs). It means that ISPs can regulate the speed of access to different sites differently".
Why leave Facebook if Facebook is the only place content loads quickly for everyone?
Fishkin believes these disparities would kill innovation and seriously harm today's open ecosystem, where anyone can register a website and anyone with web access can get to that site without interference. Take away that protection, and the internet becomes like television - a few big players own all the content and all the options for access, and only the very wealthy or well-funded can start a new channel with any hope of success.
Trump has not been backwards in coming forwards on his views of tech giants including Apple and Amazon, criticising both for investing too much in products that are made outside of the US, that could be made in America by Americans. The iPhone is designed in California, but production is outsourced to countries including China, Korea and Mongolia - Apple claims this is to save time, rather than money.
Trump, February 2016Believe me, if I become president, oh do they [Amazon] have problems, they are going to have such problems.
Business Insider stated that “many US tech companies, including Apple and Google, make more of their revenues overseas than within the US”. With such a strong stance on protectionist policies it could make overseas operations significantly more expensive and increasingly difficult to run.
One of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.Trump, November 2016
In an interview with the New York Times, Trump openly discussed his desire for Apple to move plants from Asia to the US. Although the iPhone is designed in California, production is outsourced to countries including China, Korea and Mongolia, however Apple claims this is to save time, rather than money. And speaking in 2015, Apple CEO Tim Cook told 60 Minutes that it was a lack of skills in the US that prevented Apple from moving manufacturing operations back to the US.
In the latest Apple employment figures (December 2015), the company said it “directly employs” more than 76,000 in the United States. As well as this, the company pointed out that “50 states have full-time Apple employees, and our 265 retail stores across 44 states average over 100 employees each”.
President Trump has been very vocal about his feelings on immigration and the rules on who can enter the US, instating a controversial travel ban (dubbed the Muslim Ban based on the countries targeted) and pledging to build an even more controversial wall along the border of Mexico and the US.
With President Trump still fighting to get his travel ban reinstated after its second iteration was blocked by a Hawaiian judge hours before coming into effect, the tech industry came together to fight the ban anyway it could. Joining forces, over 100 technology companies including the likes of Facebook, Google, Apple and Microsoft filed a friend-of-the-court brief to argue against the ban, stating that it is unconstitutional, unfair and, above all else, bad for business.
The statement put out by the collection of tech giants argued:
Immigrants are leading entrepreneurs. Some of these businesses are large. Immigrants or their children founded more than 200 of the companies on the Fortune 500 list...Collectively, these companies generate annual revenue of $4.2 trillion, and employ millions of Americans.
The Order makes it more difficult and expensive for US companies to recruit, hire, and retain some of the world’s best employees. It disrupts ongoing business operations. And it threatens companies’ ability to attract talent, business, and investment to the United States.
In some instances, tech companies went one step further in assisting those affected:
The H-1B visa is a non-immigrant visa that allows US employers to employ workers from overseas, temporarily and in specific sectors. It is heavily used by the tech sector in the US, which relies on it to quickly fill available roles with workers from other countries. 81,000 people are awarded the H-1B visa each year and in 2015, 66% of H-1B visas granted were for tech jobs.
On President Trump’s orders, the US Citizenship and Immigration Services announced that it will temporarily suspend fast track processing for H-1B visa petitions that are filed on or after April 3, 2017.
From our perspective, we have seen an increase in the number of candidates on H-1B visas who are attempting to convert them into green cards. From within the US, we expect Trump’s controversial policies on immigration to have a positive impact on the prospects and confidence of American workers. These policies will empower and strengthen US employee confidence, as they can expect to be more in demand.
In a Valley Beat Fox Business article, the writer suggested the overhaul of rules around H-1B visas could be positive and lead to a focus on American workers, asking “what if there are plenty of new graduates and experienced workers to fill those specialized STEM jobs, right here in America?”.
Chairman of boutique executive search firm Headhunters India Kris Lakshmikanth was similarly strong, saying the move showed “the US government is clearly telling companies to not depend on the H-1B visa going forward”.
Dmitry Gerasimenko, CEO and founder of Ahrefs, is originally from Ukraine and moved to Singapore to incorporate Ahrefs after his US visa was rejected several times. Now with a US office and hiring in the US, Singapore and worldwide, he gave us his perspective.
US non-immigration visas (H-1B, even B1/B2) were broken a long time before Trump, and from what I read about H-1B, reform ideas could actually make H-1B better. Singapore is a good example - the rules are set in a way that we would prefer to hire local, but if we cannot find someone we can bring in a specialist from another country in two weeks (compared to almost a year for H-1B in US with no guarantee because of lottery).
So I would say the Trump presidency is giving some hope that a fixed H-1B will serve its goal and bring highly skilled people to the US.
The overall impact of the Donald Trump presidency on the US tech sector remains to be seen, but it looks set to be a rocky first term for the new President, and he may need to reassess his kneejerk reactions to criticism if he is to bring the tech sector around. Time will tell whether the two sides can establish a firmer friendship over the coming months.
But whilst the US tech sector has many challenges ahead, there are still opportunities aplenty for the best and brightest talent that has helped Silicon Valley thrive. With an office placed in New York, GCS is perfectly placed to deliver these exciting vacancies. Take a look at the jobs we have available and you could find yourself part of an innovative global industry.