Markets think a ‘Trillion-dollar’ technology and infrastructure stimulus may be imminent
WASHINGTON (bdpatoday)—President-elect Trump’s victory signaled widespread uncertainty and discontent surrounding economic opportunities, something which CNBC states several technology executives recently suggested their technology eventually will help to address. For example, leaders at these companies reminded employees that eBay‘s marketplace empowers buyers and sellers, LinkedIn‘s tools help people connect or find jobs, and Apple‘s devices connect people.
Microsoft CEO Satya Nadella reminded people in one of his LinkedIn posts that our world is witnessing democracy in action and linked to his company’s blog with recommendations for the next administration and the next Congress. According to CNET’s Marguerite Reardon, here is what little we may know about President-Elect Trump’s stand on a few important technology issues.
Net neutrality became a relatively big deal in our 2008 election, but little was said during this election cycle about last year’s policy.Net neutrality is the idea that all traffic on the internet should be treated equally. This means our broadband providers, which control our access to the internet, can not block nor slow down services or applications we use via the web.
We know Trump is not a fan of the FCC’s current regulations. It is very possible that an FCC led by Republicans could eliminate all or part of the rules and strip the FCC of some of its authority. Should that happen, broadband providers could create so-called ‘fast lanes’ and pass charges to Internet companies, like Netflix, different rates to deliver content and their services. Loosening regulations around telecom likely will benefit broadband and wireless carriers. The NCTA, an Internet and Television Association which lobbies for the cable industry, said it is eager to work with President-elect Trump.
Industry consolidation and broadband
President-elect Trump also seems to have taken a populist view against mergers and acquisitions (M&As). That could spell trouble for big pending mergers, including AT&T’s $85 billion takeover of entertainment giant Time Warner. When that deal was announced last month, President-elect Trump vowed to block this merger if he was elected. AT&T’s executives still like their chances of inking this deal if approved by the U.S., pointing to “investing in infrastructure” statements President-elect Trump recently made in his victory speech.
Encryption and cybersecurity
CNET reports the president-elect has only made vague statements about privacy and security, and downplayed Russia’s alleged hacking into the Democratic National Committee (DNC) and Secretary Clinton’s campaign email servers. Nonetheless, when our Justice Department haggled with Apple over unlocking the iPhone of a terrorist suspect in
the San Bernardino shooting, he then called for a boycott of Apple’s products. What he has said about cybersecurity is that there should be a review of US cyber defenses by a “Cyber Review Team.”
Experts who have reviewed President-elect Trump’s economic agenda suggest that deficits will explode, which could eventually lead a Republican Congress to slash budgets. This could mean heavy cuts to funding for science programs and education, which runs counter to the tech industry’s call for more tech-savvy workers in today’s digital age and software-defined ecosystems.
Moreover, President-elect Trump publicly supported views that are not backed by the scientific community. He has repeated unfounded connections between vaccinations and autism and dismissed reports of climate change as a myth perpetuated by the Chinese to undermine our economy.
He appealed to voters in coal country by supporting energy policies that encourage the use of more fossil fuels and downplayed investments in renewable energy, like solar. Donald Trump also has said he would “cancel” the Paris climate agreement, the United Nations deal to curb greenhouse gases and fund adaptations to climate change, which worries many scientists.
H-1B visas and immigration
Immigration has been one of the hallmark issues of President-Elect Trump’s campaign, but most of his suggested policies center on what his administration would do to reduce illegal immigration. When it comes to legal immigration of skilled workers, he wants to increase pay for people holding H-1Bs as part of a plan to steer more opportunities to unemployed native and immigrant workers. This due largely in part some still consider H-1B visa holders a much cheaper source for highly skilled and technical labor for domestic U.S. corporations.
The biggest boost to the tech industry may ultimately come from President-elect Trump’s plans to lower corporate tax rates encouraging corporations to repatriate two trillion dollars of foreign profits parked overseas and reinvest their money in the United States.
CNET reports there’s a good chance that money could be invested in the U.S., said Rob Atkinson, president of the Information Technology & Innovation Foundation (ITIF). But this is not a given. In the past, when the US allowed American companies to bring in profit earned overseas, we had hoped these firms would hire more workers. Instead, most of the money went to executives and shareholders.
President-elect Trump also has called for high import taxes on products, which could drive up prices for consumers on tech goods. Last January, Trump stated in one of his stump speeches, “We are going to get Apple to build computers and things in this country instead of in other countries.” Declining to comment on Trump’s statements at that time, Apple designs its products at its Silicon Valley headquarters, but uses a Chinese contractor to build them. If Apple products were manufactured in the US, the price of an iPhone could rise to as much as $900 per unit to offset worker wages versus the $650 cost of an iPhone today.
Could slashing corporate taxes to provide workforce development and mentor-protégé incentives help train more college, vocational tech, and high school students to build computers and mobile devices with original equipment manufactures (OEMs) in the U.S.? Greg Autry, an entrepreneur researcher, predicts a shift away from the traditional start-up model, where young engineers develop a new product, get it financed and move the manufacturing overseas. He argued a Trump administration would create a regulatory and tax-friendly environment conducive to the tech sector.
“Companies like Foxconn, the Taiwanese company that manufactures Apple products will be able to expand production in the U.S. through automation,” Autry said. He added that more automation—the so-called ‘boogie man’ often described as robots stealing human jobs—would actually be a boon for OEMs and U.S. manufacturing.
“We’ve dealt with automation since the 19th century,” Autry said. “What automation does is create a lot more products for us to enjoy at a lower cost, and we get more people working more efficiently creating more products.”
Apparently, almost half of the national electorate voted along those lines—the promise of more jobs.