US President Donald Trump’s work permit suspension could potentially reshape the global tech and startup industry, and likely see the decline of America’s influence on the digital economy. The growing acceptance for remote working due to the Covid-19 pandemic could accelerate this trend.
In the digital economy, you hire where the talent is. When you restrict immigration, the jobs still get created, ju… https://t.co/o9O6t7ZYfp
— Aaron Levie (@levie) 1592864963000
Becoming the preeminent locus of agglomeration for the world’s plucky up-and-comers has been one of the US’s greate… https://t.co/ukheb56kPz
— Patrick Collison (@patrickc) 1592887480000
1. Trump’s H-1B visa suspension
US President Donald Trump on late Monday suspended H-1B, L-1, and other temporary work permits in a bid to protect American workers facing higher unemployment, a decision which has received sharp reactions from the tech and startup industry. The visa curbs are set to take effect from Wednesday and remain through the end of the year.
What’s the impact on India?
Indian nationals receive nearly 70% of the 85,000 H1-B visas issued each year, although this decision is expected to impact US tech firms more than Indian IT service providers that have reduced their dependence on H-1B visas and hired more people locally over the last few years.
The share of Indian companies among the top 10 visa recipients has dropped to 24% in 2019 from 51% in 2016, according to data from the US Citizenship and Immigration Services.
Offshoring to accelerate
Analysts see more offshoring of work in the sector in the next few months, given the impact of the Covid-19 pandemic and continuing travel restrictions. This could also result in Indian tech talent in the United States moving back to the country
Murthi, Ramdorai, Premji and Nilekani were the catalyst of first wave in Indian SoftwareTrump might be the catalys… https://t.co/nmOicsb7nx
— Amrish Rau (@amrishrau) 1592878828000
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2. Weak demand for ride-hailing
Shared mobility companies are facing weak recovery in ride numbers, even after restrictions were relaxed nearly two months of a nationwide shutdown. The sector’s outlook for the whole year also seems dim, as people in cities fear stepping out due to the Covid-19 outbreak.
What’s the demand like?
Ola and Uber have recovered only about 20% of ride volume levels seen before the pandemic hit, and the full-year estimate is at best 50%, driver associations, analysts and company insiders told ET. Bike rental startups Bounce, Yulu and Vogo have also recovered 25-30% from pre-pandemic levels.
What’s the future plan?
Several players are restructuring their category mix and expanding their portfolio to gear up for a post-Covid-19 market, ET reported in May.
Ola plans to prioritise and expand its self-drive business to consumer subscriptions and corporates while rival Uber has rolled out new categories like dedicated rentals and package delivery service Uber Connect.
Scooter sharing platforms Vogo, Bounce, and Yulu are scaling up long-term two-wheeler subscriptions. Read more.
3. Origin of e-commerce products
Indian government’s e-procurement site GeM has made it mandatory for sellers to disclose the ‘Country of Origin’ on the products they list on the platform. It also introduced a provision for sellers to indicate the percentage of local content in each product.
What next?
Indian government may expand this to private marketplaces like Flipkart and Amazon, in a bid to curb Chinese imports and providing consumers the ability to choose locally made goods.
Platform Neutrality
While there have been several calls from consumers to display Made in India tag beside product listings, e-commerce platforms say they’re meant to be neutral and unless mandated by a government ruling, will not dissuade consumers from buying non-India made products.
That said, Flipkart and Amazon have run campaigns on promoting local brands and also have sections on their websites and apps for users to discover products sourced and produced locally from artisans and even startups. Read more.
4. IIM Ahmedabad endowment fund
Indian Institute of Management, Ahmedabad has set up an endowment fund with an initial corpus of Rs 100 crore, the first business school in India to institute such a fund.
Who is anchoring this fund?
More than ten of the premier B-school’s alumni members, including WestBridge Capital co-founders Sandeep Singhal and SK Jain, co-founders, Info Edge founder Sanjeev Bikhchandani, MakeMyTrip founder Deep Kalra, A91 Partners co-founder VT Bharadwaj, ICRA chairman Arun Duggal, McKinsey senior partner Ramesh Mangaleswaran, Cleanmax Enviro Energy Solutions founder Kuldeep Jain, founder, Sequoia Capital India managing director GV Ravishankar, Citizen Matters co-founder Meenakshi Ramesh, have anchored the fund.
What’s the goal?
The endowment fund aims to help IIM-A make a larger impact in the field of education, entrepreneurial leadership, management practice, and public policy. IIM-A expects to grow the corpus to Rs 1,000 crore in the next five years. Read more.
5. Indian IT’s new skilling strategy
Indian IT services providers have ramped up on internal upskilling and learning platforms since March, as they cut down on external new-age tech courses for employees in a bid to reduce costs.
What are they doing?
Tata Consultancy Services (TCS) and Infosys are focusing on training tools such as iEvolve and Lex to upskill employees with new technology, while Cognizant is streamlining its learning platform to meet its digital business targets. Read more.
(Illustrations and graphics by Rahul Awasthi)
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