As week two of the government shutdown winds down, it appears to be business as usual in the tech sector -- surprisingly so, considering the high stakes for the industry.
Directly or indirectly, the shutdown can have a major impact on the tech industry, starting with third-party government contractors -- from big players, like Google or Microsoft, to the millions of workers who provide IT services to the government through smaller firms. Many of those companies will struggle in dealing with their employees' pay or resort to layoffs should the stoppage drag on.
IT employment has largely been a bright spot in the U.S. jobs market, but as eWeek notes, employment experts are concerned because of the federal government's long reach in IT. OMB data shows the government buys more than $80 billion in technology each year. "The effects could be deep and wide long term," Mike Durney, CEO of Dice Holdings, parent company of the Dice.com career site, told eWeek. "Near term, the shutdown is likely to be haphazard in its effects, but the longer it goes, the impact could be felt in a lot of different places."
Among the other consequences of the shutdown, tech companies can expect delays in the review of patent applications; no more processing of H-1B visas; delayed IPOs, as the SEC rejects new applications and slows the processing of existing ones; delayed processing of Employer Identification Numbers by the IRS, holding up business for innovators in Silicon Valley; and suspension of work on NIST's cyber security framework.
Yet, with all that's at stake, the major players in the tech sector have chosen not to weigh in about events playing out in Washington. As NYmag.com writes:
While you might think that an issue like the shutdown of the entire federal government and a looming debt-ceiling disaster that could throw the U.S. economy back into Lehman Brothers territory would make the denizens of Silicon Valley look up from their mini iPads, you'd be wrong...
It is remarkable how narrow the tech world's vision can be. As long as the venture-capital money is still flowing from Sand Hill Road, the logic goes, why does it matter if federal workers are being furloughed, cancer patients are having their treatment delayed, and the global economy's stability is one default away from disaster?
The prospect of a government default on the debt does unnerve at least some in the industry. "It is unthinkable that the United States could default on its financial commitments, and it would be the height of irresponsibility for any public official to consider such a course," said AT&T Chairman and CEO Randall Stephenson in a statement. "In fact, even the discussion of default poses great risk to our economy and to our country."
But the silence by most tech giants is puzzling, as Wonkblog points out:
Over the past couple years, Silicon Valley has sought to reverse its longstanding aversion to politics. Lobby shops for companies like Google and Facebook have ballooned, campaign contributions have started to flow, new organizations have formed, and high-profile advocacy campaigns have made headlines across the country. On the fight over the government shutdown and debt ceiling, though, they've been almost entirely absent.
While it might be unreasonable to expect Silicon Valley lobbying to have an impact on negotiations over the budget and debt ceiling, when Wall Street lobbying has thus far failed, it would still be nice to see tech players weigh in. Perhaps, as NYmag.com suggests, "if Washington really wants to get Silicon Valley's attention, it should declare the Creamery a national park and then shut it down."
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