First, if you want to really feel what’s Silicon Valley is going through after Donald Trump’s election, watch this video. A huge meltdown of 500 Startup’s founder Dave McClure at Web Summit.
The world is shell-shocked after the unexpected victory of Donald Trump, which analysts think will embark a new era in the world, and affect all the realms of human life. The tech world of today is the base staircase of human civilization. Silicon Valley is often called the cradle of the modern day startup boom that seems to be thriving in the US and beyond. However, effects of Donald Trump on the tech world, startup scene, especially in Silicon Valley are going to be fateful.
Immediately after the announcement of the final results, famous corporate bosses, including CEOs of companies such as Boeing Co., Procter & Gamble Co. and United Technologies wrote a letter to Donald Trump, seeking an “urgent” reassurance that he would retain the current economic dynamics. It is important to note that Mr. Trump had openly slammed these companies during his campaign, and promised to cut a whopping 35% of duties on car imports from Mexico. Should this become true, cars prices in the US after Trump’s presidency are going to tumble, which could result in heavy losses to major transport companies.
The tech world of today is based on offshore manufacturing. iPhones, tablets, Samsung Galaxy smartphones, computers, robots, all are manufactured in China, Taiwan and other countries in Asia. Why? Because labor costs in these countries are far much lower than the costs in the US. A single iPhone produced in the US would result in losses to Apple. During his campaign, Donald Trump rattled the very base of this economic model when he pledged to create more jobs in the country by moving offshore manufacturing back to the country.
Trump’s hostile stance towards China and its currency-lowering policies to make its exports more lucrative is a death-knell to the current business structure. If Donald Trump’s government applies tariffs on Chinese exports, a massive economic recession could engulf the world.
Donald Trump, like all other Republicans, does not believe in Climate Change, one of the biggest problems faced by humanity today. Solar and green energy startups currently enjoy a renewable energy incentives. Trump is expected to trash these incentives to spend in areas which he deems are more useful.
The good news is for infrastructure and the defense industry. These are the areas which are set to thrive. Donald Trump has, time and again, said that this country needs an infrastructure reform. With experience in the industry, he is set to build roads, bridges, plazas (more Trump plazas?), hotels and centers. Small businesses dealing in parts and shipment of small and heavy arms are also bullish as the President-elect plans to increase the military buildup at home and abroad.
There are always tons of opportunities no matter how tough the times are. Let’s say Donald Trump actually does what he promised in his campaign: high tariffs, trashing free trade deals like NAFTA and TPP, expelling immigrants. The world will still have over 7 billion people, facing immense problems. When there are problems to be solved, there are growth and investment opportunities for startups.
The expected rise of nationalism after Donald Trump assumes office will result in an overall market contraction. But startups would thrive in Asia, Europe and beyond. Companies will soon start getting satisfied with limited markets, with a local workforce, native problems and home-built solutions.
Start investing in your own countries instead of always dreaming about flocking into the Silicon Valley for jobs. Introduce new ideas at your own soil, attract local angel investors and build exciting products to solve the problems of the people near you.
When populism and polarization grips the world, the only hope will be humans. The startup world still has endless possibilities and growth opportunities. Creativity and innovation trump political upheavals.
Tell us what you think the future would bring for the tech and startup world in general.
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