Digital Delta
- Financial services regulations in many countries can inhibit the development of online payment systems. For example, in Nepal, the talent exists to write and sell apps. But many of these developers cannot register and upload their apps to platforms like Google’s Play Store, which requires an internationally recognized credit card to register—even if your app is free. There are only around 200 such credit cards in Nepal.
- Monopolies in the telecommunications industry can push up the cost of internet access by stifling competition, and this is something the World Bank Group is well aware of. In its funding of undersea internet backbone cable around Africa, the Bank Group has insisted on multiple interconnections to facilitate competition.
- In international trade, restrictive de minimis rules (requiring the payment of duties even on very small shipments) can impose burdensome requirements on small traders, and the lack of market access for international express delivery providers can cripple on-time delivery.
- The types of funding platforms which could provide digital entrepreneurs with crowd-sourced or other funding from developed countries can be shut down by securities regulations in developed countries, which require registration with securities regulators every time equity is being publicly offered.
- More subtly, the digital business environment requires an open attitude toward risk. Successful digital entrepreneurs often acquire valuable experience by repeated failure in various attempted startups. The attitudes enabling failure as a pathway to success are partly cultural. However, the design of bankruptcy laws may make a difference. If old enterprises cannot be wound up quickly, or entrepreneurs passing through bankruptcy are legally handicapped in starting new businesses, digital commerce is impacted more than other forms.
We will continue to engage the public, private, and third sector on this issue, and we encourage those of you with experience to reach out to us. Comment on this blog and let us know what’s holding back your digital enterprise.
This post first appeared on The World Bank Trade Post Blog.
