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Silicon Valley vs Trump: Understanding The Effect Of Immigration Ban On The World's Tech Hub

By Cameron , Feb 09, 2017 11:27 AM EST
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"Making America great again," is one of the well-known catchphrases of Pres. Donald Trump. In his road to achieving this goal, one particular order issued by the president that many U.S. citizens have mixed feelings for is the barring of immigrants from seven Muslim-majority countries. With this being said, how much of an impact will this be in the tech industry, specifically in the Silicon Valley?

Silicon Valley Is The Place For Ideas From All Over The Globe

If you look at all the leading tech companies globally, you will notice that the U.S. is over-represented. The reason for this is because Silicon Valley is a place that is immigrant-friendly, it welcomes people from far outside its borders. And with Pres. Trump's executive order of barring immigrants from seven Muslim-majority countries, it was seen as something that could potentially disrupt this haven or system where the best and the brightest from all around the world gather in Silicon Valley or in America to share ideas.

Immigrants Dominate America's Tech Industry

Last year, a study was conducted by a team of researchers at the National Foundation for American Policy regarding 87 privately held American start-ups that were then valued at $1 billion or more. In their findings, they concluded that more than half of these companies were founded by one or more people from outside the United States. Also, 71 percent of these companies employed immigrants to take on crucial executive roles.

Among the companies studied in the research, are well-known tech companies such as Uber, Tesla, and Palantir. These companies created thousands of jobs for people and added billions of dollars to the American economy. And of course, their founders came from all over the globe.

Back in 2011, a somewhat similar study was also conducted by the Partnership for a New American Economy. In their research, they found that more than 40 percent of the companies in the Fortune 500 were founded by immigrants or by children of immigrants. And for the newest members of the Fortune 500 that fall on technology, the rate of immigrant founders was even higher.

So Why Are There More Immigrant Workers in the Workforce?

According to one theory, it all comes down to money. There is totally enough supply of American-born employees to fill in the roles at many tech companies, but tech companies are taking advantage of visa programs, such as the H-1B system. In this way, they can get foreign workers at lower prices compared to the American-born employees that they will likely have to pay more.

This is only a theory, though, because some may also argue that most tech companies nowadays are like athletic teams. They are looking for people around the globe that can deliver a brand-new, never-before-seen widget or to completely reimagine what widgets should do in the first place. So in a sense, hiring immigrants will bring "new perspectives" that will lead to "newer ideas."

A good example for this is Mike Krieger, an immigrant from Brazil and a co-founder of Instagram. According to him, he purposely eliminated most text from the app, because he knew from growing up in Brazil that English would hinder adoption in most parts of the world. And look at how that turned out, Instagram was an instant international success.

So basically, one could say that right now, immigrants are the backbone of America's tech industry. And if Pres. Trump was to issue more immigrant ban laws, it will take a huge toll. But of course, it is also important to point out that Pres. Trump is quite the successful businessman. Perhaps he has something planned out that will eventually lead to more success and make America a much more powerful country than ever.

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