During the presidential campaign, Silicon Valley leaders all but uniformly rejected Donald Trump. Now they're struggling to come to terms with what his presidency will mean for their industry.
Under President Obama, Silicon Valley became very friendly with Washington—and the relationship went both ways. Tech companies spent millions to lobby Congress, while former political strategists often left the White House for Bay Area tech jobs. After his term is over, President Obama himself is reportedly likely to stay linked to tech, with much of the work of his charitable presidential foundation tied to the progress of innovations in Silicon Valley.
The reality of a Trump presidency is likely to be vastly different for tech.
"He barely made any appeal to Silicon Valley for their support," says Justin Gest, an assistant professor of public policy at George Mason University. "So his allegiance to growing their businesses is unclear."
Trump also failed during the campaign to define his positions on so many issues that affect the tech industry. Here’s how the Trump platform may, er, "disrupt" a number of policies that matter most to the Valley.
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.
But Trump’s trade policies go beyond this one case with Apple. Trump has criticized both China and Mexico, proposing a blanket 45 percent tax on Chinese imports and 35 percent tax on Mexican imports if the countries do not reform their policies affecting US trade. “I think the tech industry is going to have to [react to this] collectively,” says Rob Atkinson, president of the Information Technology and Innovation Foundation. “The question is, are they capable of acting collectively, or are they individual firms that just do what’s best for them?”
So much work in Silicon Valley relies upon immigrants. According to the National Foundation for American Policy, more than half of US “unicorns”—startups that are valued at $1 billion or more—have at least one immigrant founder. The top job at some of tech’s most established companies have immigrants helming the ship, including Microsoft CEO Satya Nadella and Google CEO Sundar Pichai. And foreigners have filled the middle ranks of many tech companies as well, especially in technical jobs.
But Trump campaigned aggressively on restricting immigration, restrictions that could extend to the H-1B visa program for skilled foreign workers on which the tech industry so heavily relies. Silicon Valley may not see an immediate immigration-related impact, since demand for these workers far exceeds supply at the moment, says Arun Sundararajan, a professor at New York University's Stern School of Business. But Trump has changed his mind several times about the program, making it difficult to know exactly where he stands.
Silicon Valley has long bought into the gospel of disruption. So many startups have made a business out of upending stodgy old institutions—think Uber and the taxi industry or Airbnb and hotels. A whole new way of doing work has risen up around the on-demand economy: the collection of companies, from Instacart to Lyft, built around workforces that can be summoned with a tap in an app.
Under a Trump administration, it’s not clear whether this type of flexible work will continue to exist as it does today. 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.
Want to know more about Trump's policies on innovation and R&D? So does everyone else. On issues from federal funding for tech and technology commercialization to supporting startups and reforming the patent system, he appears to have no position.
It’s possible that funding for science and R&D “goes by the wayside,” says Atkinson, pointing to the fact that Trump has not mentioned any of his plans for appointing anyone to lead the National Science Foundation or the National Institutes of Health. It just doesn’t seem to be his priority.
It's possible Trump may wind up openly at odds with research on artificial intelligence and automation. "My sense is that his primary base overlaps significantly with the population whose jobs are more at risk," Sundararajan says. Still, that potential opposition may not have an immediate effect. "The research that will lead to the near-term wave has already been done, or is going on in companies like Google," he says.
Over the past three years especially so, the tech industry has vocally committed itself to the work of diversity. They’ve hired “heads of diversity” for their companies. They’ve instituted bias-mitigating programs. They routinely release their employee demographics in a commitment to transparency about the issue, even when those reports show the numbers are barely budging. Diversity, these companies say, takes time.
This commitment to diversity may be even more challenging in the era of Trump. His campaign showed an unprecedented willingness to insult pretty much every minority group in the US. And across the industry, tech CEOs have recognized the need to redouble their commitment to diversity. Apple CEO Tim Cook told employees in a memo this week that "the only way to move forward is to move forward together."
"We'll be a major advocate for all issues that affect our employees and our values as a company (LGBTQ rights, fair immigration policies, racial and gender equality, etc.)," Box CEO Aaron Levie wrote. LinkedIn's Jeff Weiner and eBay's Devin Wenig also weighed in. The one tech VIP who has explicitly aligned himself with the new Trump administration is billionaire venture capitalist Peter Thiel, who controversially backed Trump's candidacy and will reportedly be part of the presidential transition team.
