Since Donald Trump has introduced the immigration ban, a lot of people have been very vocal about their thoughts and opinions on this matter. However, how does this affect the technology industry?
Trump, Technology and Travel Ban
The executive order to ban certain citizens from entering the U.S. has sent the market cap of the five biggest tech companies on the S&P 500 down by $32 billion. This is due to investors worrying Trump’s anti-immigration policies may cut into the workforces of tech companies.
Shares of Apple, Alphabet, Microsoft, Amazon, and Facebook (FB, -0.95%) fell roughly 1% for a total market cap of $2.4 trillion on 30th January 2017. Alphabet alone shed $13.8 billion in market cap. Tech first was quick to voice their opinions on Trump’s executive order over the weekend. Shares of Apple have fallen 0.67%; Alphabet 2.6%; Amazon 1%; Facebook 1.4%; and Microsoft 1.3%, according to Fortune Finance.
Trump’s executive order was to stop people arriving into the country from seven largely-Muslim countries. This had an effect on many tech groups. Mark Zuckerberg admitted he was “concerned” about the ban and Tim Cook said it was “not a policy we support”. Netflix chief executive Reed Hastings said it “so un-American it pains us all”. Aaron Levie, the founder of online storage company Box, said: “On basically any level – moral, economic, or logical – this is the wrong thing to do.”
— M. Todd Gallowglas (@MGallowglas) January 30, 2017
This reaction is expected, as more than 250,000 Muslims live in the San Francisco Bay Area. This is also where Silicon Valley, the massive technology hub, is located. Around 3.5pc of the local population, against 1pc for the US as a whole, and many of them work in the technology industry.
Almost 200 Google employees are affected by the ban, its chief executive Sundar Pichai said over the weekend:
“Several were forced to rush home from trips abroad last week to avoid it. Should the crackdown continue, the UK could well be poised to benefit.”
This is Google's largest crisis campaign ever. https://t.co/AU2EOZCdb7
— USA TODAY (@USATODAY) January 30, 2017
London has become a key hub for American technology companies, whose interest not been deterred by the Brexit vote. In recent months, Google announced plans to employ 7,000 people in London by 2020. Facebook said it would hire 500 this year alone, both at new offices. Apple, Amazon and Snapchat have all announced hiring sprees in the capital.
Mark Zuckerberg "concerned" about Trump immigration order: "These issues are personal for me" https://t.co/PMfeVuTH2n
— Washington Post (@washingtonpost) January 28, 2017
“According to figures from industry body TechUK, more than 1m people work in the high-tech “digital producing” industries in the UK, and this is growing by 3.6pc a year. Of this, around 156,000 were born outside of the EU, and between 2009 and 2015, non-EU workers made up 28pc of new hiring – significantly more than foreign nationals from within the EU.” James Titcomb – Telegraph
Twitter is built by immigrants of all religions. We stand for and with them, always.
— Twitter (@Twitter) January 29, 2017
Trump’s administration has drafted an order for repairing the work-visa programs technology companies depend on to hire tens of thousands of employees each year.
If applied, the changes could shift the way American companies like Microsoft Corp., Amazon.com Inc. and Apple Inc. recruit people and force wholesale changes at Indian companies such as Infosys Ltd. and Wipro Ltd. Businesses would have to try to hire American first and if they recruit foreign workers, priority would be given to the most highly paid.
The foreign work visas came about to help U.S. companies recruit from abroad when they couldn’t find qualified local workers. The companies were hiring for highly technical positions in the fields of science, technology, engineering and math, or STEM. However, there have been claims the programs have been abused to bring in cheaper workers from overseas to fill jobs that otherwise may go to Americans.
“Ron Hira, an associate professor at Howard University, who has done extensive research on the subject, points out workers at outsourcers are typically not treated as well as others. The median wage at outsourcing firms for H-1B workers was less than $70,000, while Apple, Google and Microsoft paid their employees in the program more than $100,000, according to data he collected. That suggests the American companies are going after true, highly skilled employees, while the outsourcers are recruiting less expensive talent, he said.” – Peter Elstrom and Saritha Rai – Bloomberg Technology.
— CNN Breaking News (@cnnbrk) January 29, 2017
So what does this mean for the future of technology innovators and companies? In just his first 10 days on the job, President Trump has already signed two proclamations, seven executive orders and seven presidential memoranda. He’s invented a new form of the presidential directive — the national security presidential memorandum — and signed three of those. President Trump has said the executive order is only intended to be a temporary measure. However whether this will be true or not, we will have to wait and see.