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Nepal needs huge improvement in digital entrepreneurship, innovation

17 January 2023

Nepal needs huge improvement in digital entrepreneurship, innovation

Nepal needs considerable improvement in the fields of digital entrepreneurship and innovation, having received low rankings from the Asian Development Bank (ADB) and the World Intellectual Property Organization (WIPO).

In ADB’s ranking of countries in terms of quality of environment for digital entrepreneurs, Nepal ranked 104th out of 113 economies.

In WIPO’s Global Innovation Index 2022, Nepal is in 111th spot out of 132 economies.

According to R.C. Subedi, founding and managing partner at Apex Law Chamber in Kathmandu, the government should update its laws to create an environment more favorable to innovators and digital entrepreneurs.

“The laws and regulations for the protection of intellectual property dates back to 1965,” Subedi shared, “after which no new laws have been made so far.”

These outdated rules and regulations are inefficient, ambiguous and infrequently implemented.

“When registering an IT company, there is no particular industry category that suits it,” Subedi cited an example. “Even more ambiguity is created by the fact that the definition of a startup is nowhere to be found in the legislation. It is challenging for ride-sharing startups like Pathao and InDrive to operate effectively because Nepal's transportation regulation essentially forbids private autos from making a profit from such activities.”

Law enforcement personnel are ill-trained on IP matters. Meanwhile, offenders frequently provide minor bribes to avoid being prosecuted. As such, Nepal becomes ill-equipped to combat the sale of counterfeit goods.

“With world-changing innovations coming every year, Nepal cannot always rely on outdated laws which address a small proportion of the technical issues of today,” said Subedi.

The good news is Nepal developed its IP policy in 2017 which is presently under review.

The government should also invest more funds in the Ministry of Education, Science and Technology. For fiscal year 2022–2023, the government allocated a meager 0.45 percent of GDP to science and technology.

Investing in skilled human resources will also go a long way in fostering an environment conducive to innovation and digital entrepreneurship.

“The government and the commercial sector must collaborate to improve the IT curriculum so that it more accurately reflects market demands. Similar to this, increasing the number of business incubators and boot camps could aid in the improvement of IT companies and resources,” he said.

“It is impossible to prohibit skilled workers from moving to other countries for higher-paying positions. However, local businesses can construct a welcoming workplace culture that offers opportunities for employees to enhance their careers in order to keep such workers. Similar to this, there will be more options for local IT startups to acquire finance, as there are more private equity and venture capital firms and more funding coming from development agencies,” Subedi added.

Of course, providing training opportunities is part of the upskilling initiative. According to Subedi, focus should be on young entrepreneurs outside Kathmandu Valley. In Nepal, which has a dearth of top-tier IT parks, low broadband penetration rate and poor mobile internet quality, Kathmandu Valley is the only place with adequate digital infrastructure.





 -Espie Angelica A. de Leon