What Trump Means for the Tech Sector

What Trump Means for the Tech Sector

Wired’s Davy Alba explores how Donald Trump’s incoming presidential administration could change the way Silicon Valley operates:

Never mind the fact that Trump’s own companies manufacture thousands of items overseas. “We’re going to get Apple to built their damn computers and things in this country instead of in other countries,” he promised at Liberty University as early as January, a commitment he repeated at other events. His position: punish companies that offshore production by placing tariffs on their imports back to the US.

The problem is that, at least in Apple’s case, forcing adherence to this policy would be both logistically impossible and economically disastrous. Forcing Apple to produce the iPhone in the US would make the device so wildly expensive that it would become less competitive with foreign competitors like Samsung. And with shrunken margins, Apple would have to look for other places to cut down on expenses—including scaling back corporate operations or closing retail locations, which already employ thousands of Americans—jobs at home Trump purportedly hopes to save.

Trump’s immigration policy also has implications for the tech sector. The president-elect campaigned on a promise to severely tighten immigration, including a sharp reduction in the number of H-1B visas issued for skilled foreign workers, but as Alba notes, Trump has gone back and forth on that program and what policy his administration ultimately settles on remains uncertain.

Another potential point of impact is on the gig economy. According to New York University business professor Arun Sundararajan, Trump’s preferred policies could limit the growth of the type of flexible, on-demand jobs that companies like Uber and Lyft provide:

Sundararajan, whose work focuses on the on-demand economy, expects to see tax policies friendly to small businesses, including people who set themselves up as “businesses of one.” On the other hand, Trump’s pledge to repeal the Affordable Care Act would be hugely damaging to gig economy workers. As independent contractors, they don’t get paid time off, workers’ compensation, or health insurance through the companies they gig for, such as Uber. If the ACA is dismantled, they may need to seek full-time jobs that offer health benefits, which could hurt the companies that rely on their labor.

Trump’s campaign rhetoric opposing globalization and free trade has also raised eyebrows in the Valley. Marcus Baram at Fast Company adds that tech leaders now “worry that Trump’s protectionist stance … would damage the economy”:

“Some of the things he said during the campaign about trade are concerning, because we live in such an interconnected world now,” Victoria Espinel, president and CEO of BSA/The Software Alliance, tells Fast Company. “I think it comes back to uncertainly, because he really didn’t say a lot about specific policies during the campaign.”

Others are concerned that Trump would carry through his vow to repeal Obamacare. “Changes to health care policies that reduce accessibility or raise the cost of coverage for our employees” would have a material impact on software company Redis Labs, says CMO Manish Gupta. He adds that proposed changes to immigration and trade policy could also have a big impact, but that they won’t know for several months, until after Trump takes office in late January. “For the moment, we are in the ‘wait and see mode’ and will institute appropriate business changes should the new policies require such alterations.”

The tech sector, which relies heavily on global talent and needs to become more inclusive of women and minorities to fill critical shortages of skilled labor, has also taken a lead role in mainstreaming diversity and inclusion in corporate America. As Aimee Groth and Alison Griswold observe at Quartz, many tech startup founders focused on issues of diversity and inclusion in their communications to employees after the election:

At DoorDash, a food delivery startup headquartered in San Francisco, general counsel Keith Yandell sent a note acknowledging the “surprise, uncertainty, and confusion” expressed by employees in the wake of the election. “I promise to you that DoorDash remains committed to fostering an inclusive and diverse culture that is accepting of everyone,” he wrote. “We can move forward by executing and living out the values upon which the company was founded: that we stand for anyone that is trying to make it.”

Marco Zappacosta, CEO of jobs and home services listing site Thumbtack, wrote in a note to employees that Thumbtack would “continue to be committed to creating an inclusive company where all people are empowered to reach their potential.” But, he continued, “we can all make an impact outside our walls”[.]

For an overview of what HR executives should be thinking about in light of the election of Donald Trump, head here.