It was an exciting time. I remember walking around the shared office spaces of an innovative upstart that promised a tech revolution in Washington, DC. Tech guys, socialites, hipsters, journalists, angel investors and local politicos buzzed about co-working suites with saucers of hors d'overs and a micro brew. It was more than just a cocktail party, it was the beginning of a tech and startup ecosystem.
There was promised funding and an excitement that the future of tech woud start right here. That was around 2013-2015. It seemed the world had opened up and the demand for tech specialists, startups and angel investors meant Americans would build the next Apple or IBM. Sadly, that never happened.
They told us there was a demand for tech professionals and even my demografic, Black Americans just needed the skill to fill those new jobs. Unfortunately, they were wrong about that. Black Americans already had the skill, they just didn't get the job. Even today, although Black Americans make up 12 percent of the population, they only comprise 8 percent of the tech Work force according to a report by CompTIA's State of the tech Workforce for March 2022 cited by McKinsey & Company. In fact a report by IEEE Spectrum in 2020 found black tech professionals make significantly less than their white counterparts occupying the same job. It was then I knew growth in this industry would be complex. Sime people would be invited to the oarty and some would not. Ironically, that same scenario is now playing out on a larger scale against much larger international competition instead of a few thousand HBCU graduates.
And American tech, has begun a precipitous decline. Particularly in 2023 and Q1 2024, tech closures, layoffs and downsizing has excellerated. Tesla's Austin Gigafactory laid off employees on Monday amid reports that it is laying off 10 percent of its workforce. The company was awarded $64 million in tax incentives and was slated to create 15,000 jobs in Texas. Meanwhile just this past December 2023 its Hyperloop One laid off everyone and shutdown after nine years in operation. What's more, Starlink has closed out of markets in South Africa, Zimbabwe and the Democratic Republic of the Congo and Botswana.
US tech bad news has been piling up. Just recently semiconductor stocks were down after a Bloomberg report indicated China would phase out foreign chipmakers in response to heavy US tech bans squeezing its industries. Just recently the US treasury secretary was in Beijing cesuring the sino-nation over more US defined tech squabbles.
In the meanwhile Washington has sought to re-energize its flagging tech industries through subsidies and grants. It has sought to start semiconductor production in the US through a friend-shoring model with TSMC, that purports to bring Taiwan's advance micrichip fabrication to America. But news hasn't been too good on the tech front for imdustries restricting access to its products, as ASML orders missed estimates. Demand for its chipmaking machines fell from $4.9 million to $3.8 million in Q1 2024, Bloomberg reports.
So why is America's tech economy imploding? It's based on a number of factors. Watching this industry boom in the Silicon Valley days to puttering along in 2024 is striking. We must factor in the pandemic, supply chain gaps, trade policies, the war in Ukraine, the Gaza Massacre, tech wars, bans, monetary policy, international sanctions and artificial intelligence among others.
While AI definitely took tech jobs, it has also affected other industries. This influences who can and cannot buy. Add to this the massive pandemic-era small business closures, even co-working spaces like WeWork couldn't solve tech work. That company fileed Chaper 11 bankruptcy in 2023. Small business is the life-blood of strong economies. Without small business, employment and consumption will take a massive hit.
And even with the advent of Bitcoin and CBDCs (a product of the tech boom), the picture on the ground isn't looking very good for average Americans. Despite the bouyancy of fictitious fiats and stocks, the lived quality of life and purchasing power is headed down.
But there have been missteps. Huge missteps that have swallowed American tech's ability to be truly profitable. Perhaps what is most puzzling about the situation, is that leaders are not seeking ways to solve American tech's ability to compete, but rather it has been bent in snuffing out its major tech partners. But the US is not alone, some EU states, Australia and Canada have been making provocative overtures in the marketplace that has shifted tech away from growth.
So what happens next? We wait and see. Americans are left to wonder how profitable new schemes aimed at defanging the world can enhance America's tech dominance. Perhaps America should attempt to fix its racial pay gap issue in tech and consider negotiating win-win deals with its international tech peers. Or maybe even devising an whole new internal strategy at strengthening the tech economy through real-time practical means. Currently, there is slowing profitability and the tech landscape is difficult to navigate for many startups and many major corporations.
Government spending has pivoted the US economy toward the military industrial complex and left small businesses, startups, American professionals, experts and others to fend for themselves. Tech was going to be the next big thing--I still think it is. But, maybe it is time for small businesses and startups to start thinking of better regions to grow. The tech revolution will continue. Except, It just may not be here.
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