U.S. Government Shutdown May Have Big Impact on Tech

As the partial U.S. government shutdown hits Day 25, it’s worth examining how the shuttering of certain agencies could impact tech pros across the country. This isn’t just a matter of federal tech workers not receiving a paycheck; folks in private industry may find themselves impacted in ways they didn’t expect.

With that in mind, here are a few things that the shutdown has ground to a halt:

IPOs and Other Business

This was the year that a handful of prominent tech firms—including Uber and Pinterest—planned on going public. Other companies had mergers, IPOs, and business-unit spinoffs in the works. But all those proposals require review and a sign-off by the Securities and Exchange Commission (SEC), meaning they’re on hold until the resolution of the shutdown.

Workers at the SEC managed to complete their part of some upcoming deals before the axe fell. “Prior to the shutdown taking effect, we encouraged filers to reach out to us to ask for acceleration of the effectiveness of pending registration statements, and we declared approximately a dozen registration statements effective,” the agency wrote in a statement to Bloomberg.

If the shutdown drags on for months, it could delay any number of company IPOs and other deals into 2020 and beyond. In turn, that could slow down the big payouts expected by employees at those firms. And it’s a far bigger issue than a few hot unicorns finally hitting the stock exchanges—lots of business filters through the SEC, and until it opens again, all those operations are at a standstill.

Hardware Approvals

Any tech company that builds hardware for sale in the U.S. is no doubt hoping that the shutdown ends soon, because the Federal Communications Commission needs to certify certain kinds of devices slated to hit store shelves. If the impasse drags on for too long, it could seriously impact certain firms’ product roadmaps.

Naming a Federal CIO

The passage of the Federal CIO Authorization Act (H.R. 247 (116)), which would establish a Federal Chief Information Security Officer, is stalled in the House of Representatives until this shutdown is sorted out. Such a role is vital: “The Federal CIO shall submit to Congress a proposal for consolidating IT across the federal government and increasing the use of shared services,” reads the text of the bill.

Federal Tech Recruiting

Shutdowns end, and some semblance of normal life resumes: Companies launch their IPOs, federal regulators are appointed, hardware is approved, and paychecks (finally!) reach deserving employees. But there’s one long-term consequence of federal shutdowns that could prove difficult to mitigate: It may become harder for agencies to hire the best and brightest tech pros.

Let’s say you’re an IT security specialist, or a gifted young app builder. Do you take a job for the federal government, knowing there may come a time when you’re either furloughed or forced to work unpaid, or do you accept a position in private industry? The choice becomes even starker when you realize that private companies often pay more, their projects move faster, and there are sometimes free snacks and other perks?

“The government is already struggling to replace retiring IT workers,” James Lewis, communications director for U.S. Representative Robin Kelly (D-Ill.), told Politico last week. “Now, we will have to compete against Amazon in the DC metro PLUS try and attract people to a ‘company’ that is publicly showing it will let politics prevent it from paying its workers.”

The tech challenges facing the federal government are bigger than ever—not only do many agencies need to modernize, but cyber-threats are growing in danger and sophistication. That just ratchets up the pressure to hire the best possible brains. Even if the current shutdown is the last one for a couple of years, the specter of not receiving a paycheck for an indefinite period of time—all because of a broader political issue—might persuade those brains to stay away.

Current Federal Tech Workers

Not all federal tech workers are furloughed during this shutdown; some are deemed “essential” and thus forced to work unpaid. Others, such as those who are part of the military or the U.S. Digital Service, either have their pay already secured or aren’t paid via funds that require Congress passing a bill.

For those tech workers who can’t come into the office, though, the situation is a terrible one. We hope the shutdown is resolved soon, but at this juncture, it seems there’s no end in sight.

6 Responses to “U.S. Government Shutdown May Have Big Impact on Tech”

  1. FreedomLover

    Hopefully the shutdown lasts many months, or even years, and the market can start taking over functions that should never have been the domain of the government to begin with.

    • Anonymous

      Yeah, the EPA, FCC, SEC, FBI, Coast Guard, etc, etc… those should all have been private companies.

      I am being sarcastic, those are all critical to national health and functionality and privatization of them would out right destroy the United States as an entity as the states started doing their own thing.

      But, getting rid of DHS, TSA, ICE (well the border patrol branch), CIA, and even much of our active duty military (and I’m a vet) wouldn’t be a bad thing.

  2. Yeah, the EPA, FCC, SEC, FBI, Coast Guard, etc, etc… those should all have been private companies.

    I am being sarcastic, those are all critical to national health and functionality and privatization of them would out right destroy the United States as an entity as the states started doing their own thing.

    But, getting rid of DHS, TSA, ICE (well the border patrol branch), CIA, and even much of our active duty military (and I’m a vet) wouldn’t be a bad thing.

    • @Realist Sooo, Your saying we need to keep the pieces of the government that do the most to hamstring free markets and get rid of all semblance of National Defense. Brilliant! Reality is the Federal Government is suppose to exist ONLY for the combined defense of the States and to mediate disputes between them. The monster we have now impacting everything from education to healthcare, travel, public communications was never meant to be.

  3. Stock Market Up 15 Percent

    All we’re learning is how bloated the federal government is AND how unneeded these “non essential” government employees are, as the shutdown continues into Day #WhoCares.

    But the government shutdown has been really good for the stock market — up nearly 15% since the first closing day of the markets after the government was shutdown!