Trump President: a liberal wind can blow in Silicon Valley
Donald J. Trump is today the new President of the United States. The news was received like a sledgehammer by Silicon Valley, which had clearly supported Hillary Clinton throughout the campaign. This morning people are stunned and have a hard time believing it, but this is the reality that we now have to deal with.
It must be said that the economic policy announced by Trump is not to reassure the Tech Economy and investors. If traditional industry could benefit from this election, it is not so sure for the new economy. The trade policy envisaged by Trump with China is also likely to impact Silicon Valley companies, most of which manufacture their products in Asia.
At the same time, Silicon Valley needs talent to function. These talents are often of foreign origin, since 52% of co-founders in Silicon Valley were not born in the USA. There are an estimated 50,000 vacancies in the Valley and the US needs over a million engineers within 5 years, but only 600,000 are being trained in US universities. Silicon Valley counted in particular on a relaxation of the H1B visa to fill this gap. Not sure that this idea is still in place …
Finally, it is possible that the number of IPOs will decrease in the coming months given the economic uncertainty generated by this election. If this were the case, investors would be the first to be impacted and would see their liquidity affected.
At the same time, it is certain that a liberal wind will blow on the US which can benefit American companies and in particular companies. FinTech which will see the legislation soften. It is also reasonable to think that corporate taxes will decrease and that new aid will be granted to companies repatriating jobs to the US.
On a more general level, the impact on Silicon Valley will be minimal even if the ideological divide with the rest of the United States is likely to become even more accentuated as the values carried by the two camps are distant. Silicon Valley will remain the capital of Tech. Facebook, Google and the others are not going to move and will continue to disrupt the traditional economy. Silicon Valley has the economic and technological means and the capacity to continue on its way in a certain form of autarky. It was already a technological, economic and cultural exception within the United States and this distance is now in danger of increasing with the election of Donald J. Trump.
Silicon Valley will play above the fray and continue to attract entrepreneurs from around the world who are committed to building innovative and global societies. Trump’s immigration policy will have very little impact on entrepreneurs who do not qualify for the H1B visa anyway. Finally, the model Cross border advocated by The Refiners, which invites foreign start-ups to keep their engineering by adopting a global culture from the start, today makes even more sense as it will be difficult for technology companies to find qualified resources in Silicon Valley.
Paradoxically, the election of Trump could ultimately have a positive impact for foreign start-ups capable of developing a global business while building technology teams in their country of origin. If they are able to compete with American start-ups on their playground of Silicon Valley without suffering from a talent shortage, then they have an advantage over American start-ups.
Carlos diaz is general partners at The Refiners. Based in San Francisco since 2010, Carlos has founded several start-ups in France and in Silicon Valley. Kwarter in San Francisco, France blueKiwi (acquired by ATOS) and the Reflect group which has now become Emakina. Flagship entrepreneur of French tech, founder of the Mouvement des Pigeons and columnist on France Info (Live from Silicon Valley), Carlos is on the board of several start-ups in Silicon Valley.
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