US election outcome has numerous implications for tech industry

The outcome of the Presidential and Congressional elections in the US has serious repercussions for the technology industry that will reverberate not just in the US but globally, according to GlobalData, a leading data and analytics company. These repercussions run across multiple areas, including immigration policies governing highly skilled tech employees; potential regulations against Webscales like Facebook and Google; R&D funding priorities; and data privacy regulations. In addition, the election results could also have major implications for ongoing trade negotiations between the US and China that impact global technology supply chains.

John Byrne, Service Director, Telecom Technology & Software at GlobalData, comments: “It is a cliché to say elections have consequences, however, in this election the consequences are perhaps greater than they have been in any US election cycle in recent memory. This is particularly so in regards to the impact on the technology industry globally. Policy and regulatory decisions alongside new legislative imperatives for the next four years at least will be significantly determined by the outcome of next week’s elections. Those impacts will be felt by the entire industry, including hardware and software vendors, GAFA*, and network operators.”

According to GlobalData’s series of ‘Election Impact Snapshot’ reports, if the Republicans were to win the Presidency, and control of both houses of Congress, denial rates on skilled employee immigration would likely remain high – as they have for the past few years. By contrast, under a full Democratic scenario, greater immigration would be likely; however, new safeguards would mean they are unlikely to return to levels seen during the Obama administration.

Byrne continues: “The issue of immigration has enormous consequences for continued tech innovation in the US. The H1-B visa in particular has been a bone of contention: depending on your viewpoint, it represents an abuse of American workers or an opportunity to garner new tech talent that might otherwise go to Europe or Asia.”

Furthermore, the report highlights that, under a Republican President and executive branch, regulation of webscale companies is likely to focus on issues of perceived suppression of conversative viewpoints on social media. By contrast, Democratic control of both the Presidency and Congress would likely bring pressure from the progressive win to support stricter antitrust actions against the likes of Amazon, Facebook, and Google.

Byrne adds: “There is no question that the pressure is going to continue to grow against webscales and social media. The difference is whether that pressure focuses primarily on Republican concerns over censorship or on Democratic concern over unduly large market power that stifles competition.”

Another key point from the report is that, under a Republican President and regardless of which party controls the House and Senate, extreme pressure against Chinese vendors is likely to continue, which could lead to a bifurcation of supply chains between Western and Asian suppliers.  However, US regulations against certain Chinese vendors are likely to remain in place.

Byrne notes: “Regardless of the election outcome, pressure against Chinese vendors will continue. The larger issue is whether the current trade disputes with China result in permanent changes to the supply chains, as appears likely under a Republican administration, or whether tensions ratchet down under a more normalized trade environment, which could largely maintain the status quo.

* GAFA = Google, Amazon, Facebook and Apple

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