Kevin Maney reports:
D“The end of the 1960s turned out to be Detroit’s apex. In the early 1970s, dubious U.S. economic and foreign policy led to disaster when the Middle East OPEC nations initiated an oil embargo. Gas became scarce and expensive, and Detroit was caught focusing on the wrong products—ostentatious gas-guzzlers—at the wrong time, giving Japanese makers of small cars an opening in the U.S. market. Pulitzer Prize–winning auto historian Joseph White wrote about two fateful mistakes that made things worse. First, “Detroit underestimated the competition,” he said. The likes of Toyota and Honda had become much more adept than industry executives realized. Second, the U.S. companies “handled failure better than success.” Detroit’s decades of triumph set up the hubris, waste and bad practices that came to haunt it.
From there, it was a short trip to loss of market leadership, layoffs, plant closings and a city that fell into a desperate decline.Think that could never happen to Silicon Valley? Like 1970s Detroit, Silicon Valley seems to be handling success rather badly. Look at the twisted mess at Uber and the culture wars tearing at Google’s guts. Insanely high valuations of private companies are starting to look like a perilous pyramid scheme Bernie Madoff might admire. High costs and ever-worsening congestion are making the San Francisco Bay Area nearly unlivable for all but the superrich. At the same time, much of U.S. tech is underestimating the competition, particularly from China and the European Union.Making it all worse, the Trump administration seems to be doing everything it can to help shove Silicon Valley off its pedestal. Trump’s policies on trade, immigration and investment are giving competing nations openings to steal important chunks of Silicon Valley’s global leadership, lure away talent and divert capital to other rising tech centers—even France. (You know, the country President George W. Bush once said doesn’t even “have a word for entrepreneur .”)
Related: Is the Silicon Valley Bubble about to Pop?The Silicon Valley tech industry isn’t going to suddenly crumble and vanish. Detroit’s auto industry didn’t disappear either. But there’s a clear demarcation point in the early 1970s, when Detroit’s worldwide hegemony ended. The CEOs, founders and wizards of Silicon Valley would be misguided to think they’re immune from any similar stumble off their pedestal.
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Most damaging of all may be the policies of the Trump administration, which has been implementing or proposing one policy after another that puts the industry at a competitive disadvantage.Earlier this year, the president initiated a review of H-1B visas for foreign workers, which tech companies rely on to bring in talent. More recently, the Trump administration delayed —and may kill—the International Entrepreneur Rule, which would make it easier for foreign company founders to bring their startups to the U.S. “At a time when countries around the world are doing all they can to attract and retain talented individuals to come to their shores to build and grow innovative companies, the Trump administration is signaling its intent to do the exact opposite,” said Bobby Franklin, president and CEO of the National Venture Capital Association.And in early September, Trump said he will end the Deferred Action for Childhood Arrivals program, which has allowed undocumented immigrants who were brought to the U.S. as children to stay. Now, they may be deported. Some are valuable employees of tech companies. Microsoft pledged to pay the legal expenses of any employees who face deportation as DACA ends. Microsoft President Brad Smith called Trump’s decision “a big step back for our entire country,” and the industry worries that it will further discourage talented foreigners from coming to the U.S.Other countries have started pursuing international talent like sharks circling surfers at dusk. “I myself hope that many of these engineers will come to China to work for us,” said Robin Li, CEO of Chinese tech giant Baidu. Canada’s minister of innovation, Navdeep Bains, launched a recruitment program, saying, “We want to be open to people.” French President Emmanuel Macron announced that tech talent can “find in France a second homeland.”Even more detrimental to U.S. tech are two other Trump decisions: pulling out of the Paris climate accord and dumping the Trans-Pacific Partnership (TPP) agreement on trade with Asia.”
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Government by the arrogant, ignorant, incompetent, biased, and unqualified has its downsides! It’s something that we’re all going to learn over the next four years, assuming that Trump doesn’t get us into a world-ending nuclear war before then. Perhaps one of the stupidest consequences of some very stupid policies: one of the main beneficiaries is likely to be China, one of our biggest tech competitors, and unlike Canada, also a potential hostile military threat! Trump and his cronies are dangers to our national security!