Next week, the U.S. will have its presidential election, and Donald Trump versus Kamala Harris is as close a race as we have ever had in this country. As the election has drawn closer, I’ve talked with many information technology and business leaders who are watching closely as there are implications for the technology industry.
This is clearly on the minds of IT leaders today. A recent EY study found that 74% of the business leaders in the tech industry believe the results of the upcoming election will have a major impact on the U.S. tech sector’s ability to stay ahead of global competition.
As a point of clarity, I’m not calling a winner, nor am I stating one is better than the other – instead, I am pointing out the pros and cons of a Republican versus Democratic win. I think it’s important to evaluate how their respective policies might shape the future of technology. Each candidate brings distinct approaches that could transform the industry’s regulatory landscape, innovation strategies, and global competitiveness:
Implications of a Donald Trump victory:
Pros:
- Deregulation and reduced compliance consideration: Donald Trump has historically championed deregulation across all industries. For the tech sector, continued deregulation implies reduced compliance burdens and enables faster innovation with less government oversight. Specifically with artificial intelligence, no regulation would likely be a disaster, but I do think the U.S. needs to step on the innovation gaps as China and the Middle East have very aggressive AI plans.
- Pro-business tax policies: Trump’s previous administration pushed for lower corporate taxes, which benefited the tech industry, particularly the large vendors, by providing them with more capital to invest in research and development, acquisitions and infrastructure enhancement. That said, when taxes are lowered, it should be with the caveat that a portion of the money is used for innovation and jobs. The last round of tax cuts led to $87 billion in buybacks, which increases shareholder value, but that’s the wrong use of the money.
- Critical infrastructure investment: Trump has advocated for massive infrastructure investments, including digital infrastructure, particularly 5G buildouts. Given we live in a network-centric world, the growth of high-speed connectivity creates more opportunities for more people and democratizes advanced technology, such as AI.
Cons:
- Increased tariffs and trade tension: If there is one thing Donald Trump has been consistent on in the 30-plus years he has been a pseudo-celebrity, it is his stance on international trade, particularly with China. This leads to tariffs affecting the tech supply chain and slowing innovation. Companies reliant on global networks for manufacturing could face increased costs and supply disruptions.
- Immigration policies: Stricter immigration controls reduce the talent pool, particularly affecting tech companies that rely on skilled immigrants to drive innovation. Previous policies reduced the number of tech workers who came to the U.S. on visas such as H-1B and TN.
- Stance on antitrust: Trump has generally favored deregulation, which could lead to fewer restrictions on tech companies in areas like data privacy. However, during his previous term, there was increased scrutiny of tech giants concerning monopolistic practices, although he leans toward self-reporting, which isn’t always perfect.
Implications of a Kamala Harris victory:
Pros:
- Pro-sustainability and green technology: From Harris’ comments, I expect her to support initiatives that promote sustainable technology and innovation that are pro-planet. This could increase funding for renewable energy tech, electric vehicles and pro-climate solutions.
- Data privacy and consumer protection: A Harris administration will strengthen data privacy laws, enhancing consumer trust in technology. Harris has been an advocate for responsible data management practices within companies.
- Diversity and inclusion: The Harris campaign is built on diversity. Increasing workforce diversity will lead to initiatives that help tech companies tap into a broader range of talents and perspectives, driving more inclusive innovation. This is particularly important in removing bias in AI.
Cons:
- Increased regulation and compliance costs: Stronger regulatory oversight leads tech companies to face higher compliance costs and requirements, potentially slowing innovation and product rollout. That said, when Harris was attorney general of California, she was pro-technology.
- Antitrust scrutiny: The Biden administration has intensely focused on antitrust and competitiveness. Harris is likely to maintain a tight focus on antitrust issues, potentially challenging the market dominance of major tech companies and pushing for breakups or stricter regulations.
- Corporate tax increases: The prospect of higher corporate taxes to fund social programs could reduce after-tax profits for tech firms, affecting their investment capabilities.
Final thoughts
The trajectory of the tech industry under either Kamala Harris or Donald Trump will largely depend on their policy priorities and legislative cooperation. Each potential leader presents an interesting mix of opportunities and challenges. A Trump win will likely mean business-friendly tax policies and deregulation but with trade challenges. On the other hand, Harris could drive innovation focused on sustainability and inclusivity, albeit with increased regulation and tax implications.
Business and technology leaders and other stakeholders must prepare for these divergent paths and adapt their strategies accordingly to be successful in the shifting political landscape. As the election unfolds, the tech industry must stay agile, leveraging potential advantages while mitigating risks associated with each candidate’s vision for the country and the world’s future.
