Opinion | H-1B visa ban will hurt American technology leadership3 min read . Updated: 24 Jun 2020, 06:27 AM IST
Most of the Indian IT services firms have prepared well for this eventuality
We are living in a digital world powered by technology. This world has been shaped by innovations, primarily originating in the US ever since the end of the Second World War. Especially, the role of Silicon Valley in the evolution of the new tech world is foremost and unique. But Silicon Valley is a creation of immigrants. Two-third of the top US tech companies were founded by immigrants. Almost half the chief executive officers of leading tech companies were not born in the US. With the move to suspend H-IB visas, the US administration is hitting at the heart of American technology leadership.
Of course, there will be some impact on big Indian IT services companies such as TCS, Infosys, Wipro, HCL Tech, etc. But most have prepared well for this eventuality and will be relatively unaffected. These companies had already stepped up their hiring in the US, and beefed up their offshore capabilities aided by cloud technology and remote work technologies. There will be some compression in business on account of covid-19, especially in sectors such as travel, hospitality, etc., but I think they will adapt their talent supply chains to emerge stronger and more robust when the dust settles in 2021-22.
Big US tech companies such as Google, Amazon, Apple, Facebook, Adobe, Intel and Cisco have already hedged this risk with the creation of multiple development centres across different geographies. The work-from-home boost during the covid crisis has brought home a new reality that talent could be located anywhere. Companies will now beef up these software and hardware development centres outside the US even more. Canada will be a big winner of this trend with its open-door policy to immigration. Canada is culturally similar to the US and also within a few hours of flight time for HQ meetings and reviews. Bengaluru and India could also do better. More jobs from big tech will move overseas in search for talent and competitiveness. However, startups in the US will be further challenged and stretched for talent. These startups are the engines of innovation and rely on talent. They are fostered in the unique culture of Silicon Valley where failure is cherished and risk-taking encouraged. However, they can’t afford to match the salaries paid by big tech for top talent. This move by Donald Trump will hurt these startups the most, thus blunting the innovation edge of the US economy.
American universities have played a unique role in the rise and dominance of American technology. These universities have attracted students from across the world, and many of these talented students stay back in the US, thus providing a hugely qualified talent pipeline to US companies. In fact, most of the technology masters and PhD students in leading tech universities are international students, according to latest statistics. These students provide an unmatched talent stream to US companies and startups. This has also been a big attraction of American education for international students. This beautiful bridge is now broken. Trump’s move may also hurt these universities.
China has emerged as a strong challenger to US dominance in the past 10 years. The rise of a powerful China that is economically and politically assertive is creating huge challenges to US policymakers. Chinese big tech companies ranging from Alibaba to Tencent and Xiaomi to Huawei are now challenging US technology companies across geographies and technology domains. For years, Chinese companies (aided by the state) poached American IP and reverse-engineered American technology products to create cheaper alternatives. But it now has the hardware and software prowess to create cutting-edge and innovative products. Especially in AI, the Chinese are ahead of US tech companies. Take the case of TikTok (part of Bytedance), which gathered the fastest traction ever by an app across the world, including in the US.
How would the US compete with China in the technology sphere in the next decade is the $100 trillion question, especially at a time American economic, military and political influence is being openly challenged by China.
If the US stifles the talent stream originating from across the world from working for its technology companies, it will surely lose its innovation edge in the coming decade to China.
Rajesh Sawhney is the founder of GSF Accelerator.