If there is one thing that global business hates, it’s uncertainty and with all the political changes of the past half year there is plenty to go around. President Donald Trump is making endless policy pronouncements on Twitter, the UK plan for Brexit appears to be a process that will take years to resolve, and with several major European elections this year we may see even more populist leaders emerging.
One thing for sure is that the global IT and IT outsourcing business involves the movement of skilled people to places where contracts are operating and the movement of projects to people. For years there has been a constant flow of both. Sometimes the work itself can flow from a client to supplier in a remote location. Sometimes the IT supplier needs to send teams to the client. There has been a two-way flow of skills and work for many years that has created a global industry with several international clusters of expertise.
The approach President Trump is taking in the USA may give an indication of how many countries want to operate in future – with a drastically reduced inflow of people, no matter how skilled they are or how required those skills are.
In the first instance this appears to be a big concern for the Indian IT companies who account for over 70% of all H-1B visas in the US. The H-1B visa is used to allow highly skilled workers to temporarily work legally in the US. 85,000 visas are available each year and 230,000 applications are made. At present they are randomly allocated, as all valid applications are from highly skilled people anyway. Trump plans to make it much harder for companies to get the H-1B, although the exact criteria change remains undefined.
Similar fears exist for companies operating in the United Kingdom. It is clear that the free movement of EU nationals will end as Brexit is agreed, but it remains unclear how EU nationals already living in the UK will be treated. Will they be allowed to stay in return for the right of UK nationals living inside the EU to stay there? At present nobody knows and it is this uncertainty that is bothering many inside industries such as IT, that are used to a steady flow of skills across borders.
There could well be an upside for companies that specialise in nearshore IT services, if the Indian IT players find that they are going to start being seen as too far away from their customers, but for now the future remains uncertain. What is clear is that some of the largest companies in the world depend on sourcing IT expertise globally, yet some of the biggest governments in the world don’t appear to be listening to the companies that create the jobs.