The Need for Adopting a Startup Act in Cameroon

Named after “Africa in miniature”, Cameroon has shown tremendous potential for economic growth and development in recent years. As the country aims to diversify its economy and foster innovation, the adoption of the Startup Act presents numerous opportunities. In recent years, the global startup ecosystem has witnessed exponential growth, revolutionizing industries and leading to economic development. As the heart of Africa, Cameroon possesses immense potential to leverage the benefits of this startup revolution. To fully harness its entrepreneurial spirit, it is crucial for Cameroon to adopt a Startup Act specifically tailored to foster the growth and success of startups. This section aims to explore the opportunities that arise from implementing a Startup Act in Cameroon. Cameroon has a vibrant entrepreneurship ecosystem characterized by a young and tech-savvy population. In fact, the Ministry of Post and Telecommunications runs a program for rewarding the best startups as well as a committee in charge of digital space. Establishing a startup act may constitute an opportunity to boost entrepreneurship in the country.

Creating a Favorable Regulatory Environment

Implementing the Startup Act would enable the government to create a business-friendly regulatory framework tailored explicitly for startups by putting in place a participatory process. Research shows that countries with favorable regulations for startups attract more investment and experience higher rates of entrepreneurial activity. This framework would include simplified registration processes, tax incentives, and streamlined bureaucracy. By streamlining unnecessary red tape and bureaucratic processes and introducing incentives, Cameroon can foster innovation and entrepreneurship and contribute to economic growth.

Seeking for finance and Investment

One of the significant challenges faced by startups is access to adequate funding. Access to capital is crucial for startups to scale their operations and implement innovative ideas. Empirical studies highlight the positive impact of a startup act on increasing investment opportunities for startups. In that view, the evaluation of the Italian Start-Up Act in 2018 shows that the adoption of the act in the country brought an increase of 10 to 20% of firms’ revenues and value added, and that access to credit improved the magnitude of these effects. Also, by offering tax incentives for angel investors and creating public-private partnerships, the government can attract both local and foreign investors, catalyzing the growth of the startup ecosystem. A startup act in Cameroon represents a good opportunity for investment incentives or the establishment of a national startup fund. Such initiatives would encourage both local and international investors to invest in Cameroonian startups. Increased access to funding would, thus, provide a vital lifeline for early-stage ventures, allowing them to scale and thrive.

Job Creation and Economic Development

Startups have been proven to be significant contributors to job creation and economic development. By supporting startups through a dedicated Startup Act, Cameroon can unlock its entrepreneurial potential and drive job creation in various sectors. The growth of startups also leads to a multiplier effect, stimulating other industries such as logistics, technology, and services. Research show that young firms contribute more to job creation than to total employment share. Indeed, young firms in the OECD area, which account for around 20% of total employment, represent 47% of job creation. This economic growth has the potential to lift communities out of poverty and reduce unemployment rates.

Fostering Entrepreneurial Education and Innovation

Another crucial aspect of the Startup Act is the promotion of entrepreneurial education and innovation. By creating incubators, accelerators, and entrepreneurial hubs, aspiring entrepreneurs would have access to mentoring, networking opportunities, and the necessary resources to develop their ideas into viable businesses. According to some scholars, one of the transmission mechanisms through which young firms impact job creation is through firm entry but also by the growth of young incumbents, particularly those less than three years old, through incubators. The example of the USA is proof that innovative entrepreneurship can promote inclusiveness. Additionally, a start-up act in Cameroon is an opportunity to enhance collaboration between universities, research institutions, and startups that can spur innovation, leading to the development of groundbreaking technologies and solutions unique to Cameroon.

Global Competitiveness and Recognition

The competitiveness of firms is another interesting determinant of business growth. By establishing a favorable regulatory environment for startups, Cameroon would gain favorable attention on the global stage. Attracting international investment and fostering innovation can position Cameroon as a hub for entrepreneurship in Africa. This could lead to increased collaboration with foreign companies, partnerships with international organizations, and participation in global startup events, ultimately boosting the country’s competitiveness in the global market.

Fostering Networks of Entrepreneurs and their Funders

If money is an important key for businesses to grow, another key to their success is their access to networks with other entrepreneurs and with funders, which will be key determinants for their future. The adoption of a Startup Act has the potential to create a thriving ecosystem for startups in Cameroon. By implementing a supportive regulatory framework, providing access to funding and investment, fostering entrepreneurial education and innovation, catalyzing job creation, and enhancing global competitiveness, Cameroon can unlock its entrepreneurial potential and drive sustainable economic growth, thus laying the foundation for a thriving startup ecosystem that will shape its future.

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Photo by Adetola Afolabi on Unsplash.