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Can Donald trump the technology industry?

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Following one of the more controversial and flamboyant election campaigns in recent memory, Telecoms.com takes a look at what a Donald Trump presidency could mean for the tech industry.

After initial claims, few thought he would actually put himself forward as a potential outsider in the Republican party, then few thought he would overcome competition to become the nominee in the presidential race, and finally few thought he would be more than cannon fodder during the Clinton campaign. But here we are contemplating what the Donald Trump presidency means for the world.

Telecoms.com has taken a look at a few campaign claims and potential policies which could impact the technology world.

Immigration

One of the more controversial topics during the presidential campaign, and one which could have a fundamental impact on the technology and telecoms industry.

Silicon Valley has long-relied on a liberal atmosphere in the region, bringing in talent from around the world to advance some of the industry’s most promising technologies. However, promises from Trump to reform H-1B visas, which would give preference to American workers and make it more difficult to recruit talent from international backgrounds.

On a positive side, limiting the number of individuals who can be recruited from abroad would place more emphasis on sourcing and training American engineers. The US is hardly short of technology talent, and the removal of the temptation of international capacity could have long-term positive impacts on the education system and employment options for younger demographics.

From a negative perspective, the majority of the world’s most successful businesses have relied on recruitment strategies which bring the most qualified individuals into an organization, irrelevant of borders or passports. A reform of US immigration policy could restrict an organizations ability to source individuals from growing technology talent spots such as India, China or Eastern Europe, limiting the potential of US businesses.

Import taxes

The idea of supporting American businesses has seemingly generated a significant amount of support for Trump during the election campaign, and it would appear the President-elect is heading towards a policy of protectionism under the ‘Make America Great Again’ slogan.

One of the promises made on the election trail was to impose 45% tariffs on goods from China and a similar 35% levy on products imported from Mexico and Canada. While other nations have not been specifically mentioned, though it could be a fair assumption that Europe is somewhere on the agenda too.

From a positive perspective, a policy of protectionism does encourage US buyers to purchase US products. Simple.

From a negative perspective, a policy of protectionism could see the beginning of a trade war between the US and everyone else. If the US is to impose tariffs on foreign products and services, it would be a fair assumption a reciprocal tariff would also be placed on US products and services entering foreign markets.

In the technology industry, this could be disastrous for US firms, the majority of whom are building expansion plans around the emerging markets in China, India, South America, Eastern Europe, etc. Countries which are not the US. The US is a mature market with relatively low growth potential, a protectionist stance could be a catastrophic move for the US technology industry.

Corporation Tax

One of the big soundbites throughout the campaign was the reduction of corporation tax (funny that from one of the US’ most prominent businessmen). One potential policy would see corporation tax reduced from 35% to a position where US businesses would not pay more than 15% tax on profits.

In the short-term this should drastically reduce the amount of cash the US Government has in its bank accounts.

In the telco space, the government is currently championing a number of initiatives to bring broadband to all the people of the US. Initiatives include the National Broadband Plan, an FCC plan to bring download speeds of at least 100 mbps to at least 100 million US homes, some of which may not have been commercially attractive to the telcos (i.e. those in rural America or areas which would require substantial infrastructure upgrades).

The negative perspective is simple here. Less cash for the government, means less investment in such initiatives and the continuation of sub-standard internet speeds for large chunks of the country. The mission to democratise the internet could hit a slump.

On the other side of things, the theory of lower corporation taxes means the same organizations have more cash to invest in their own projects. Reducing the tax burden could see major telcos making proactive efforts to reach new markets where the payoff wouldn’t be as immediate.It might also encourage some big US tech firms to repatriate their cash piles.

It’s a nice thought, though whether big corporations in the US are as patriotic as this or would rather use the extra cash elsewhere remains to be seen.

Cyber security

Cyber security has been another major topic of the election campaign, and is the first time the data protection and privacy has been spoken about in such an emotive manner in this context. Considering the world’s movement towards the digital era, it is unsurprising as more and more of the populations lives are driven and controlled by the internet.

Both Trump and Clinton made several PR soundbites concerning online security, though there does not seem to be a consolidated position. The industry can expect increased investments in these segments, as Trump has promised a review of America’s cyber security policy, though this is generally consistent with the prior government’s position.

Control of the internet

In September, Barack Obama confirmed the US government would relinquish its final control over the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit organization that is responsible for the domain name system.

While this would seem sensible, after-all the internet is a global tool not just an American one, but the US freaked out. I mean giving control of an important aspect of the internet to an international consortium of stakeholders, what on earth was that nutter Obama thinking.

The Trump campaign weighed in on the saga, as Republicans attempted to block the move, citing countries like Russia and China would attempt to impose censorship and violate the worlds right to free speech. One of the major flaws of the argument is those countries haven’t need the help of ICANN to censor the internet to date, so why shouldn’t the American’s relinquish control.

Although there have been no direct statements to date, the reaction of the new President will be an interesting story to write up if/when it is made public. If his campaign rhetoric is anything to go by Trump is going to try to push through a number of radical policies, the consequences of which are impossible to anticipate at this early stage. Watch this space!


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