One of the key factors of driving any country’s economy is investment. Without it, an economy can become stagnant, which is why the investment climate in a country needs to be both sound and inviting.
In a recent report issued by Google and startup investor and incubator Fifth Era, titled ‘The Impact of Internet Regulation on Investment in South Africa’, one of the biggest stumbling blocks when it comes to investment around the world is each country’s legal ambiguity when it comes to regulation.
“Globally, investors view the legal environment as having the most negative impact on their investing activities, with 89% of the investors surveyed saying it had a modest or strongly negative impact,” the report states.
In the case where the Parliamentary committee in South Africa discussed the regulation of OTT services (as an example), Le Merle had some words of advice when it comes to regulation and policy.
“If you are a regulator, don’t put in place a policy until it’s been tested by a tech entrepreneur. When new regulations come into effect, large companies can cope better and have more resources. But it’s often the tech entrepreneurs who suffer.”
And that is also something echoed by the Fifth Era report, as almost all respondents said they wouldn’t invest in a country due to regulation and policy changes.