By Trisha Thadani
Donald Trump's election victory is seen as a blow to Silicon
Valley, putting the presidency in the hands of a vocal critic of
several big technology companies and an advocate of policies tech
executives have said could hurt the industry's development.
During his campaign, Mr. Trump didn't offer a specific plan for
how he would tackle technology policy -- unlike his Democratic
opponent Hillary Clinton, who in June issued a detailed tech
platform that executives broadly applauded. Meanwhile, Mr. Trump's
advocacy of tighter limits on immigration and trade alarmed an
industry that prizes high-skilled immigrants and gets much of it
business from overseas.
The electorate's endorsement of Mr. Trump's populist message,
which broadly blamed elites for the problems of many disaffected
Americans, could also spell trouble for Silicon Valley, which has
spawned companies that delivered far more in profits and
stock-market valuations than they have jobs for middle-class
workers.
Mr. Trump took aim at several big names in technology during the
campaign. He called for a consumer boycott of Apple Inc. over its
refusal to help the Federal Bureau of Investigation access a
terrorist's iPhone over privacy concerns. He accused Jeff Bezos of
using the Washington Post, which he owns, to advance the interests
of Amazon.com Inc ., the e-commerce giant he founded and runs -- a
claim the Post and Mr. Bezos strongly disputed.
And, as he did with other companies outside technology, he
claimed International Business Machines Corp. was moving jobs
overseas.
The GOP candidate received scant public support from prominent
technology executives other than entrepreneur and venture
capitalist Peter Thiel . Stalwart Republicans from the industry
including Hewlett Packard Enterprise Co. Chief Executive Meg
Whitman and Cisco Systems Inc. Chairman John Chambers both said
they backed Mrs. Clinton.
A number of tech executives and investors voiced alarm at the
election Tuesday night, with one prominent venture capitalist,
Shervin Pishevar, even suggesting California should secede. "If
Trump wins, I am announcing and funding a legitimate campaign for
California to come its own nation," said a post on Mr. Pishevar's
Twitter account Tuesday night as the Republican candidate headed
toward victory.
The tech sector thrived under President Barack Obama. The four
most valuable companies in the world -- Apple, Google parent
Alphabet Inc., Microsoft Corp. and Amazon -- are all tech
companies. Mrs. Clinton's technology policy blueprint in its broad
strokes echoed that of the Obama administration, emphasizing a
close relationship with the private sector.
Alphabet enjoyed a particularly close relationship with the
Obama administration and its chairman, Eric Schmidt, helped early
development of Mrs. Clinton's campaign. The Internet company's
policy positions aligned more closely with Mrs. Clinton than with
Mr. Trump, including its support for policies to slow the effects
of climate change, which Mr. Trump has called a hoax.
Alphabet also supports trade deals such as the Trans-Pacific
Partnership, which was one of the central targets of Mr. Trump's
campaign -- though Mrs. Clinton also came out against the trade
deal.
Even within the relative harmony with Washington in recent
years, tech companies clashed with Washington over the limits of
government authority and surveillance, particularly after the 2013
revelations by former National Security Agency contractor Edward
Snowden.
Apple earlier this year beat back a government attempt to force
it to break the security on an iPhone used by a shooter in the San
Bernardino terror attack -- the episode that prompted Mr. Trump's
criticism of the company. Microsoft in April sued the Justice
Department over secret orders to reveal customer data.
Debates over encryption and privacy are only likely to intensify
during Mr. Trump's presidency, especially given his emphasis on
homeland security. And he will take office as the tech industry
appears on the cusp of disruptive innovations -- in areas such as
self-driving cars, robots and artificial intelligence -- that would
require new policy responses.
"You don't want innovation to happen in isolation and have
people just deal with that disruption without having a plan," Aaron
Levie, chief executive of online-storage company Box Inc. and a
Clinton supporter, said in an interview ahead of the election. "In
a world where the government and technology are sort of acting in
isolation, what we are going to get is negative consequences from
disruption."
Tusk Holdings, which advises tech startups on regulatory
strategies, said in a note to clients that Mr. Trump's election
could spur new discussion on technology's role in displacing
workers -- such as concerns that autonomous vehicles could take
jobs from truck drivers.
There could be a silver lining for tech companies if Mr. Trump
and a Republican Congress enact changes to the tax code that reduce
corporate rates or allow U.S. companies to bring home some of the
estimated $2 trillion they have stashed overseas. Apple, for
example, reported holding $237 billion in cash and investments as
of Sept. 24, $216 billion of which was held outside the U.S.
But the lack of a specific policies from Mr. Trump during the
campaign leaves much uncertainty for the tech sector on hot-button
issues such as the Obama administration's "net neutrality" rules
that generally bar telecom companies from favoring some traffic
over others. Most technology companies support those rules, though
many telecom providers oppose them.
While Mr. Trump didn't offer an official position on net
neutrality, he expressed displeasure with the Federal
Communications Commission's Open Internet Order through a tweet,
"Obama's attack on the internet is another top down power grab. Net
neutrality is the Fairness Doctrine. Will target conservative
media."
Billionaire investor Mark Cuban said Mr. Trump's lack of
positions on tech policy could be a "disaster" for the tech
industry. "If his advisors end up being anti-technology, one of the
greatest growth engines of the country could be diminished. In that
case we could seem emigration of talent, rather than immigration,"
Mr. Cuban said in an email before the election.
Write to Trisha Thadani at trisha.thadani@wsj.com
(END) Dow Jones Newswires
November 09, 2016 13:44 ET (18:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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