Spending tens of billions of dollars in the United States should be a cinch for SoftBank. The Japanese group's founder, Masayoshi Son, on Tuesday promised Donald Trump he would invest $50 billion in the country, creating one job for every million dollars spent. The pledge may even help curry favour for the businessman's long-sought merger of his U.S. telecoms business with a rival. Creating 50,000 jobs in the thinly staffed tech industry, though, will be difficult.
SoftBank was already setting up an unprecedented, $100 billion tech fund backed by Saudi Arabia. So Son was on course to spend lots in the world's undisputed industry hub anyway. The listed sector worldwide is worth $6.8 trillion, the Thomson Reuters Global technology index shows. The equivalent U.S. benchmark accounts for two-thirds of the total. And that doesn’t include the thousands of start-ups seeking capital in Silicon Valley and other parts of the country.
But tech makes such a good investment partly because firms rake in money without employing armies of workers. Take LinkedIn, Workday and Twitter: they are worth a combined $54 billion, but employ fewer than 18,500 staff, Thomson Reuters data shows. Private companies are even slimmer. Facebook paid $1 billion for Instagram when it had just 13 employees.
Son may have ways to square this circle. By making investments in Uber-style "gig economy" companies, he could count everyone employed via the platform, not just the coders in hoodies at head office. He may also count the extra jobs at suppliers, customers, and so on. A push into manufacturing seems less likely - but a slide deck he brandished at Trump Tower also mentioned the giant iPhone assembler Foxconn, saying it would invest $7 billion and create 50,000 more jobs.
Either way, this is undeniably smart politics from Son, who also rushed to Downing Street weeks after Brexit, as he sealed the $32 billion takeover of Britain's ARM. A merger with rival T-Mobile US remains the best way forward for Sprint, the $33 billion U.S. mobile operator SoftBank controls. President Barack Obama's antitrust and communications regulators killed a merger of the two in 2014. Son is now in the next president's good books.