The Geopolitics of Silicon Valley
Image: www.wired.com
In 2018, approximately 71% of Silicon Valley workers were born outside of the United States. Every year, the San Francisco Bay attracts talent from all over the world. To ensure lawful employment, firms based in America can obtain H-1B visas for their staff, allowing skilled foreigners to work in the US.
The executive order signed by President Trump on the 22nd of June 2020, halted the process of issuing the majority of visas, including the H-1B, until the end of 2020. The move aims to aid the post-pandemic economy, with elevated unemployment levels in mind (the country hit an all-time high in April 2020, with 14.7% of the workforce unemployed). The President wants to prioritise and encourage hiring redundant employees. However, the technology sector has followed a different pattern, prospering during the pandemic. Unemployment levels in the industry are unrepresentative of the country as a whole, reaching an average of only 3%.
Moreover, the Republican President has seen faults being pointed out in his approach. H-1B visas come with huge financial costs for the firm, and in most cases, the process of obtaining this permit takes between 2-5 years. One could argue this shows that the talent pool has been exhausted within the States. The ban on issuing new visas could therefore not only fail to see American workers securing jobs but also halt the innovation of the prosperous sector.
Contextual statistics illustrate an overwhelming trend which encourages further criticism and questions the motive behind the executive order. Of the 85,000 people who secure the visa annually, over 50% obtain it through work connected to technology corporations. Mr. Trump’s presidency has seen him target giants, such as Twitter, and accuse them of biased conduct. In May 2020, he signed another executive order which sought to change Section 230, a law granting firms protection from accountability, originally introduced in 1996. The President believes that his approach will increase “neutrality” on online platforms.
Professionals of Silicon Valley are suggesting that ceasing immigration is irrational and discriminatory. The CEO of Google, Sundar Pichai has voiced his disapproval by tweeting he was “disappointed by today’s proclamation”. Tim Cook followed a parallel narrative by saying that companies like Apple find “strength in…diversity”. This argument finds one of its most prominent examples in Elon Musk. The co-founder of Tesla was originally born in South Africa and moved to the USA at the age of 20. The motor titan, that recently became the most valuable car company in the world, contributed more than $5 billion, to the state of California alone, in 2018. Thus, restricting the stream of foreign skills could have serious consequences; stammering innovation as well as heavy tax revenue.
What may be the long-term consequences?
Although the order is only temporary, it reflects the anti-immigration stance of the Republican president. Some argue that with the presidential elections fast approaching, Mr. Trump is attempting to make his vision clearer for Americans. However, the recent Supreme Court ruling regarding “Dreamers” proves that the controversial elements of the executive order may never be turned into law, as it continues to face backlash.
Nonetheless, Coronavirus has forced the industry to rapidly adapt to remote working conditions. Many companies are looking to progress with this model as they see the potential for financial savings. Facebook has already declared it envisions 50% of its employees to work from home, permanently, by 2030. The upcoming years are expected to show what proportion of employees are capable of working abroad for businesses based in America.
In 2019, Google alone hired 2,678 workers that worked for the company thanks to a H-1B visa. Although the Silicon Valley may be galloping towards a remote working environment, some positions in the industry will never be able to transfer online. Meanwhile, the competence of foreign workers continues to be in demand. With their expertise, H-1B visa holders contribute around $85 billion to the American economy every year.
by Zuzanna Potocka