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Trump’s effect on tech

There’s no question President Trump has made quite the splash in his first week+ in office. From reopening the Keystone XL and Dakota Access Pipelines to Executive Orders (EO) directing the U.S. government to begin dismantling Obamacare and building the Mexico border wall, President Trump is clearly intent on following through on many of his campaign promises. But, one of the EOs drawing the most ire (from the tech world at least)? His de-facto Muslim ban.

Whether or not it’s a Muslim “ban” or something slightly more nuanced is a semantics/legal argument (which are worth having, it’s just not the purview of this post). What isn’t up for argument, however, is the potentially far-ranging impacts this policy will have on the technology industry.

From his inaugural address, it’s very clear President Trump has set an “America first” agenda. From renegotiating (or canceling) trade deals, to imposing tariffs on foreign goods, to constricting immigration, the Trump administration is very clearly seeking to prioritize American citizens/workers above all other global constituents. In principle, this isn’t a crazy concept — the President of the United States ought to prioritize American interests… he’s our president. But, blanket decrees like the Muslim ban have many unintended consequences that can actually lead to more workers being harmed in this country than jobs he opens up for citizens.

The seven countries identified in the initial Muslim ban don’t contribute a massive number of employees to the tech talent pool. But, a new, possibly forthcoming EO could strike right at the heart of the tech industry and how the entire industry recruits talent. Bloomberg reported on Jan. 30th about the draft copy EO they received:

After the new president banned refugees and travelers from seven predominantly Muslim countries, Google, Facebook, Salesforce, Microsoft and others railed against the move, saying it violated the country’s principles and risked disrupting its engine of innovation. Trump’s next steps could strike even closer to home: His administration has drafted an executive order aimed at overhauling the work-visa programs technology companies depend on to hire tens of thousands of employees each year. 

Bloomberg’s article continues, citing specific language from the draft they reviewed:

“Our country’s immigration policies should be designed and implemented to serve, first and foremost, the U.S. national interest,” the draft proposal reads, according to a copy reviewed by Bloomberg. “Visa programs for foreign workers … should be administered in a manner that protects the civil rights of American workers and current lawful residents, and that prioritizes the protection of American workers — our forgotten working people — and the jobs they hold.”

One of the more popular posts making the rounds on LinkedIn addresses how much of this will affect global entrepreneurship, specifically as it relates to America’s waning dominance in that area. Vivek Wadhwa is a Distinguished Fellow at Carnegie Mellon and a syndicated columnist for The Washington Post (he’s also written a couple books on the issue of immigrant entrepreneurship):

A 2012 research paper I co-authored, “America’s New Immigrant Entrepreneurs: Then and Now,” documented that 24.3 percent of U.S. engineering and technology start-up companies and 43.9 percent of those based in Silicon Valley were founded by immigrants. My research also determined that immigrants contributed to more than 60 percent of the patent filings at innovative companies such as Qualcomm, Merck, General Electric, and Cisco Systems. And surprisingly, more than 40 percent of the international patent applications filed by the U.S. government had foreign-national authors.

Study after study has found that immigrants are more likely to start job-creating businesses, not only in tech but across the economy. In 2014, 20 percent of the Inc. 500 companies had immigrant founders. That’s despite immigrants accounting for less than 15 percent of the U.S. population.  According to research by economist Robert Fairlie for the Small Business Administration, immigrants are more than twice as likely to found businesses as non-immigrants and 7.1 percent of immigrant founded businesses export their products outside the U.S. as compared to only 4.4 percent of non-immigrant founded businesses.

Now, all of this isn’t to say that there are no ills of immigration and the United States ought to open its borders indiscriminately. However, the H1B program does enable innovative, job-creating companies that power the 21st century economy to recruit highly technical and specialized employees from all over the world. The fact of the matter is that unlike manufacturing, where jobs generally exist at the factory site, technology is truly a global business where the work can be done from most anywhere. If you constrict the flow of the best and brightest global minds away from these companies, other nations and other companies will simply hire them. Or, companies reliant on foreign labor, instead of bringing employees into the U.S. to pay taxes and consume goods here, will simply keep those employees in their country of origin. In that case, American workers aren’t getting hired at all, and those entrepreneurial employees never bring their talent (or their taxes) to the U.S.

There’s no question that some companies abuse the H1B program — hiring cheaper foreign workers, bringing them into the U.S. to undercut domestic employee wages instead of paying an American market wages for the same work. I think many tech companies would be open to a nuanced review of the H1B program to weed out bad apples that operate in bad faith. But, to completely suspend or dramatically reduce the number of visas issued purely on principle ignores many of the unintended consequences these actions could have across the entire tech industry.



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Jeff Francis

Jeff Francis is a veteran entrepreneur and founder of Dallas-based digital product studio ENO8. Jeff founded ENO8 to empower companies of all sizes to design, develop and deliver innovative, impactful digital products. With more than 18 years working with early-stage startups, Jeff has a passion for creating and growing new businesses from the ground up, and has honed a unique ability to assist companies with aligning their technology product initiatives with real business outcomes.

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