Donald Trump’s signature slogan “Make America Great Again” would suggest that the world’s foremost sovereign power has suffered a dilution of its global influence. Not for the first time, a pillar of Trumpian policy may not reflect actual reality.
As recently as 2006 US companies’ market share of the operating systems(OS) which power mobile technology struggled to reach 10% globally. Today that figure, thanks to Apple’s IOS and Google’s Android, is sitting comfortably over 99%.
Yes, private enterprise in America totally controls the functionality of perhaps the most revolutionary consumer device in the history of the planet. The mobile phone’s ability to empower individuals to engage in media, finance, retail, education, travel and even health care activities is a concentration of consumer influence beyond the dreams of business 25 years ago.
And, to this writer, the development of such market power, rather than the 1991 collapse of the USSR, marks “Peak U.S.A” . Then again, that might have changed this week.
In response to proposed US government sanctions against Huawei, the giant Chinese mobile company, Google has warned that Huawei mobile phone users may lose its operational support for its Google Maps and YouTube applications.
Early financial market reaction focused on potential commercial damage to technology suppliers to Huawei and potential retaliatory action from China against the likes of Apple. Clearly, this US government initiative cannot be unrelated to the ongoing trade war/negotiations bewteen the world’s two largest economies.
Irrespective of an ultimate trade agreement between both nations, this development should serve as an uncomfortable reminder to businesses and other countries that there are concentration risks associated with U.S. domination of the global OS ecosystem and the potential loss of valuable customers who fall foul of a somewhat erratic U.S foreign policy.
Ironically, the populist backlash against globalisation led by Donald Trump could reverse peak global power for business interests in America. This has implications for Ireland too.
The consistently excellent commentary by John Kennedy on the Irish tech scene in Silicon Republic recently highlighted Ireland’s critical positioning as the place where companies with global ambitions tend to concentrate their scale-up efforts. He puts it well here –
“Ireland has cultivated a crucial role at the heart of the global tech and internet world as the place to do business and hack growth.
As Brian Halligan, co-founder of HubSpot, put it once, Dublin is seen in leadership circles as the scale-up capital of the world. When Google came to Ireland in 2003, it was as a sales outpost for a handful of Googlers. Today, Google employs about 8,000 people here and is growing across a plethora of roles and functions, including sales and engineering. Similarly, Facebook came to Dublin in 2008 with a small outpost in mind and today it is hurtling towards 5,000 people. If you study companies such as HubSpot, which last year surpassed the 100-engineer mark in Dublin, it is clear that engineering is moving closer to the sales function because it is vital that products and actual customer success stories occur thanks to greater empathy by the people who make the products as well as those that sell them”.
There is a danger that there are countries and companies watching developments from a strategic perspective and begin to put in place plans to reduce exposure to U.S. technologies.
Ireland as a scale up base for companies could also be perceived as having an unhealthy dependence on investment from America and….. goodwill. Dublin’s political ability to take a principled stand on foreign policy initiatives is rather limited and in this upside-down Trumpian world it is difficult to know who actually is currently a U.S. political ally.
Indeed, it has always seemed a little strange that the U.S. spends more on its military than the next 12 ranked countries combined – ten of whom are American allies!
Now, former friends watch nervously as a succession of authoritarian leaders parade through the White House accompanied by fawning praise from the Donald.
The global reality is that American power and influence through its technology and military has never been higher. It’s weaknesses are captured by any quick analysis of long-term domestic/social trends in health, education and income inequality which have triggered a flawed political backlash against globalism and the technological hegemony it currently enjoys.
The Huawei story has possibly let the genie out of the bottle and given businesses pause for strategic thought.
A reversal of U.S. dominance in technology and a de-risking by companies of concentration risk could have negative impacts on previous scale-up plans and development costs as companies factor in the potential requirement to cater for competing technology platforms and more complicated regulatory and market access conditions.
Globalisation and scaling up is about to become tougher. However, the Chinese word for “crisis” features two characters signifying “danger” and opportunity”.
If Huawei is forced to go alone on its OS platform then a reasonable question might be whether its Irish R&D centre, with circa 100 staff , is about to grow quite significantly?
The thornier question might be… will America be pleased? Welcome to Trumpistan.