Tech players sweat on US certainty

The narrow election result has provided little reassurance for Australia’s technology companies.

Shootsta co-founders Mike Pritchett and Tim Moylan. Source: Supplied.

The narrow US election result has provided little reassurance for Australia’s technology companies, who say they are increasingly looking for certainty from the world’s premier innovation and technology hub.

The local tech industry is reliant on a stable US for growth, and Biden’s projected tight victory has not provided the clean slate Australia’s tech businesses were looking for in the near term, according to the chief executive of Australia networking provider Render.

Render expanded in to the US two years ago, and CEO Sam Pratt told The Weekend Australian this was the most volatile the market had ever been.

“The certainty that underpins business decisions has been missing in the US for some time now, and that impacts everyone from start-ups through to tech giants,” he said. “Deals, funding and partnerships are all being impacted as a result, and it is having a toll on our local start-up sector, too.

“For us, the momentum of this second wave has seen both customers and prospects directly impacted across the eight US states we operate in.”

Stimulus is needed to steady the ship, according to Mr Pratt, and there remains widespread concern among Australian companies that the latest round of federal support will continue to be gridlocked in the immediate term regardless of the election results, which will have increasingly dire consequences for confidence and the global economy.

“The election and COVID are inextricably linked for a number of sectors, not just tech,” he said.

Render chief executive Sam Pratt. Source: Supplied.

“The sentiment from our customers across the US demonstrates cause for concern around the impact this second wave is having on the economy, risk of even more volatility and a potential crisis of confidence impacting the economy and markets for some time yet.

“That said, when support does come it will be in the form of infrastructure and telecommunications investment given their status as the last remaining bipartisan issues on the agenda.”

A conciliatory Biden presidency may allow for a rebuild of better international relations between the US and Australia, according to Jonathon Miller, Australian managing director for digital currency exchange Kraken. Mr Miller said a Biden win would have a significant flow-on to bilateral relations and key industries like Australian technology, which benefits greatly from free trade and commerce, and cryptocurrency, which benefits from harmonious global regulation.

“Markets are anticipating further fiscal stimulus following the election, which could weaken the dollar and lead to assets that are traded in USD, including digital currencies like bitcoin, to increase in price,” Mr Miller said.

“While [Joe] Biden is expected to raise the corporate tax rate back up to 28 per cent, an unpopular policy among Silicon Valley and Big Tech, his pledge to reform the H-1B system and work toward ­removing limitations on the number of green cards the government issues yearly could open the floodgates for a greater talent transfer between the US and Australia as more skilled Australian entrepreneurs find opportunities in the US, fostering a bridge between the two tech ecosystems.

“Finally, a Biden presidency is expected to make moves to regulate social media companies like Facebook and Twitter. With the ACCC here in Australia already closely scrutinising their role as news publishers, the new presidency could usher in a transfer in the balance of power that Big Tech holds in favour of more competition and healthy regulatory reform to favour all ecosystem participants.”

Mike Pritchett, founder and CEO of video start-up Shoosta, said the vast majority of US tech companies were hoping for a change of government in the election.

Employees of tech giants like Google and Oracle have become increasingly activist, walking off the job to protest company or government policies they disagree with.

“[Donald] Trump has a more pro-business agenda than Biden. However, Biden will have a more planet-focused approach that will be more popular with the employees of the tech giants,” Mr Pritchett said.

“The US under Biden could see the tech giants vilified more readily by the federal government, but by now this is something they are likely used to.”

Todd McKinnon, CEO and co-founder of US tech company Okta, said CEOs had a role to play in preserving democracy, no matter how the election results shake out. Mr McKinnon sent an email to all employees encouraging them to be respectful and act with integrity.

“I’m very aware and conscious of the consequences of sharing my own political leanings with employees. I don’t want to create an unspoken expectation for employees to agree with my beliefs, but at the same time, I know they’re curious and aim to be transparent,” he told The Australian.

“Some CEOs don‘t want to “bring politics to work,” but I encourage employees to bring their whole selves to work and try to lead by example.

“What it really comes down to is that we welcome diverse perspectives and opinions at Okta. Everyone has political beliefs: I have mine, and I respect those of Okta’s employees, customers, and partners. The key is to show each other respect, even if we disagree.”

Josh Gilbert, market analyst at investment platform eToro, said tech companies in the US and abroad were waiting keenly for more government stimulus.

“It’s likely that we will see a stimulus package before the end of 2020. Not only does the current market rely on it, but so does the US economy as COVID-19 cases continue to rise,” Mr Gilbert said.

“It’s expected that the stimulus package will appear more significant if Biden wins this election, as many believe it will be much larger with a Democrat win.”