The future of Silicon Valley as we currently know it will be tested during the Trump Presidency. One of the starkest challenges will be immigration reform and the threat that scrapping the H1-B and other visa programs for skilled foreign workers would have on growth startups.
There is a fundamental truth that millions of voters ignored in this election: immigrants are rarely taking jobs from American citizens who want them. This is true on the lower-income scale, where immigrants often do jobs Americans don’t want, and it is true on the high scale, where immigrants fill needed roles that there is a dearth of Americans to fill.
The most obvious skill set that locally-available hires often lack is software engineering and coding. Coders are the lifeblood of tech startups and they are always in short supply; as a early-stage investor, I often spend more time referring great engineers I know to my portfolio companies than almost anything else. And it’s never enough.
The outside visa programs are particularly important to the health of the startup world because they allow the big technology companies that can maximize them – Google, Facebook, Microsoft – to fill many of their positions with immigrants, which then means they don’t have to aggressively raise talent prices and crowd out all the smaller startups looking for strong local talent in the market.
The scary part is that even with the talented worker visa programs currently in place, the big companies are still crowding the market and raising prices for talent to almost unsustainable levels. Remove the workers from those programs without replacing them with homegrown talent – and you can’t just grow great software engineers overnight on trees – and the big companies will have no choice but to crowd out the little ones even more for talent, depriving them of their growth oxygen.
Worse for the overall growth and benefit of technology to society, it will lead to significantly more early M&A activity and cannibalization of talented little startups before they can reach any market-changing potential. Instead of seeing an exciting new piece of technology that could refashion a market, Google (or any of its similar behemoth competitors) will see a dozen very talented engineers that they can add with $ 25mm and a set of golden handcuffs. Good for the founders and the coders, decent for the early investors, and very bad for long-term innovation and the technological growth of the country.
These are uncertain times. But America has always thrived by being a beacon of talent to others. That will change at our collective peril.