2017 will likely see many big technology-related battles - in Washington, in courts, and in markets. Each of these battles will produce winners and losers - those who understand the issues and the opportunities that they create could stand to make a fortune. Here are 8 likely battles to be fought:

Cybersecurity Regulation

After a presidential election in which hacking and email security dominated many conversations (and continue to do so months afterward) - expect to see both efforts by Congress to pass various legislation related to cybersecurity, and pushback from various elements within the technology industry. Consumer use of encryption is likely to be one of the areas seeing significant disagreements - President-elect Donald Trump, for example, sided with the FBI when it demanded that Apple create a backdoor in iPhone security earlier this year; the technology industry generally supported Apple.

Internet of Things (IoT) Security

As consumers and businesses continue to adopt smart devices at a growing rate, and in light of IoT malware that caused major Internet disruptions this past fall, there will likely be a battle between regulators and industry groups on the one hand, and consumers and some manufacturers on the other. Consumers want cheap devices, and there are firms that specialize in offering cheap technology; the government, industry groups, and cybersecurity professionals, on the other hand, want IoT devices to be made with some minimal security capabilities in order to prevent their being easily compromised and commandeered for DDoS attacks. But, adding features such as security improvements costs money, something that consumers do not like to spend on features about which they do not care.

Foreign Worker Visa Reform

With Republicans running the show in Congress, and with a new President who has promised to bring jobs back to the USA and enforce immigration laws with greater diligence than his predecessor, we are likely to see increased scrutiny vis-à-vis the issuance of H1-B visas, which allow technical workers from overseas to work in the USA. There is evidence that the visas have sometimes been used as part of corporate efforts to replace American workers with cheaper labor from oversees; one plan that has been discussed by various Republicans would require companies to pay any employee working on an H1-B visa at least $100,000. Such a change would impact technology companies, other employers, and possibly even school districts that have hired some teachers from overseas - and is opposed by many in the tech industry. Democrats, whose primary concern vis-à-vis immigration has typically been to address the issue of millions of people living in the United States who are unable to work due to their having entered the country illegally, may also push back against changes that only address H1-Bs.

Contractors Being Reclassified as Employees

Many sharing-economy type businesses (e.g., Uber) utilize external workers who the firms classify as contractors - making large portions of their de-facto staffs ineligible for various benefits, and saving the firms on payroll taxes. Some governments have already expressed discomfort with this - in March, California regulators found that a couple Uber drivers were eligible for unemployment benefits as if they were employees, and, in October, New York State regulators found the same; we can expect more States to take action in 2017. The battle will also likely expand in many areas from unemployment benefits to full employee classification - meaning eligibility for benefits as well as the need for employer's to pay half of the Social Security and Medicare taxes due on a worker's earnings. This type of situation is not entirely different than one that occurred during the dot-com era. There could also be substantial battles if contractors whom a government reclassifies as employees petition courts with claims that they should have received employee stock options no differently than employees hired at the same time - a situation that has happened in the past.

Regulations Regarding Self-Driving Cars and Trucks

We are only at the extreme tip of the iceberg of the self-driving car revolution, but there still may be some big battles in 2017. In 2016 we saw San Francisco reject Uber's self-driving cars, while Pittsburgh embraced them. Expect to see more conflicts as business and individuals try to deploy more self-driving cars; eventually, detailed, formal regulations will be put into place. The issues with self-driving cars are complex - besides all of the technological necessities, there are moral dilemma that may be regulated differently in different locations (e.g., if a car realizes that it is going to get into a crash, should it do its best to protect its occupants at the expense of others, or its best to protect all humans in the area at the expense of its occupants).

The self-driving vehicle battle will explode when unions get involved, something that is certain to happen as self-driving trucks become a practical reality, and eventually render nearly all long-distance truck driving jobs obsolete and unnecessary. The benefits of self-driving trucks are tremendous -- besides the inherent cost savings, the trucks can also drive 24 hours a day with no need to stop for sleep -- which will likely make their arrival and mass deployment happen much faster than people realize, ensuring that there will be lobbying and legal battles in the not so distant future.

The Legality of Regulation-Skirting Tech Firms

On that note, businesses and unions hurt by disruptive technology will continue to battle against it, and government regulators intent on enforcing existing laws will continue to watch tech firms for violations. Many disruptive firms facilitate activities that circumvent regulations - and sometimes regulators and courts don't approve. Not that long ago, we saw the Supreme Court effectively shut down Aereo's television antenna sharing service, and AirBnB is currently battling New York, San Francisco, and Santa Monica over the legality of regulations that impose fines for various popular uses of its service.

Obamacare-Dependent Technology

Many, if not most, technology companies that rely directly or indirectly on the Affordable Care Act (AKA Obamacare), will likely feel the impact of whatever changes the Republicans make to the existing system - there will be plenty of lobbying, and, some issues that develop, will, no doubt, lead to battles in court. The repeal of Obamacare will also likely create opportunities in remote medical care - leading to battles (perhaps after 2017) between technology companies in that emerging market, and, eventually, a battle over much less expensive, out-of-country doctors treating patients in the USA.

All Marijuana-Related Technology

Despite all of the media reports about the legalization of marijuana in many states, pot is technically illegal by federal law (even for medicinal purposes) anywhere and everywhere in the United States. While President Obama has opted not to enforce federal law in situations where marijuana would be legal per state law, President-elect Trump could decide to do otherwise, or to enforce the law in some situations in which Obama did not (for example, allowing the use of marijuana for medicinal purposes where it is allowed by state law, but not allowing the recreational use of marijuana anywhere). Changes in this regard will lead to state governments fighting the federal government, will lead to issues for technology firms processing marijuana-related payments or servicing other needs of the cannabis industry, and will create legal battles for the many startups directly involved in the marijuana business. Investors will likely remain on the sideline until the dust settles.

Published on: Jan 12, 2017
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