Political Winds Of Change Affect Tech Industry In Many Ways

Travel bans, import tarifis, and the impact on Silicon Valley.

When the current US presidential administration first began releasing a series of executive orders in January, the public outcry was immediate and angry. One order in particular barred immigration and visitation from several Muslim countries, and the reaction from Silicon Valley was quite vocal. Executives from many different tech industries issued statements blasting the ban, not just for its injustice, but for the effect it will have on the US technology sector. After all, many of the highly-skilled and talented workforce that US tech companies rely on in order to be at the top of the innovation game, are not from the US.

Image courtesy of Penn State Behrend

Now, another area of concern has come out of the current administration, and once again Silicon Valley is speaking out. This time, it involves the proposed tariffs on imported goods, a tariff that was promised to be as high as 45% during the campaign. The much-touted promises were an effort to win votes with an “America first” ideology, and the tariffs were intentionally meant to be a symbol of punishing “outsiders” who sell their goods in the US. While the reality of the proposed tariffs is starting to sound more like 10%, industry executives say that’s still too high. Economists have weighed in on the fact that import taxes are simply passed on to the consumers rather than taken from the company’s profits, meaning it’s the consumers who will actually be punished for purchasing the highest quality goods.

Some economists are less concerned about how these proposed tariffs are going to impact the industry. In fact, some feel that it will only result in a concerted effort to purchase American-made products, yet they fail to remember that the US doesn’t produce electronics on the scale that Apple needs, for example. Companies like Facebook and Google need tech talent that critics claim US universities are not producing, arguing that American schools produce nowhere near the same volume of software engineers and computer science majors as other countries.

There’s an unfortunate flip-side to the debate on putting America’s so-called needs in the tech industry ahead of the rest of the world, and that’s the long-standing debate about H1B visas, or “work visas.” According to college professors in tech-related fields, there’s no shortage of American graduates. However, these work permits have allowed Silicon Valley to entice tech-experts from around the world to come work for far less than US graduates plan to earn, largely due to the punitive student loan system in the US. While many in software and computer science fields have valid complaints about the current political climate and its effect on innovation, they might need to turn a closer eye on their own hiring practices before speaking out.