Equities markets sprang back to life last week, delivering mostly good news to investors and brightening hopes for a solid year of good earnings.
Tech stocks did especially well, out-performing the rest of the market and sending clear signals of a strong rebound from the end-of-year doldrums.
“While many large-cap tech names have started the year off strong, there’s a wave of smaller, more new-age tech stocks that have seen a huge rally. Companies like Twilio, Etsy, Square, Roku and Dropbox have soared, with many up double digits in the first few trading days of 2019,” writes Annie Pei of CNBC.
Against that backdrop of positive news, now is a good time to look a little deeper at some of the fundamental challenges we’ll face in 2019. I recommend reading “Five Trends Startups Should be Watching in the 116th Congress” by Rachel Wolbers, Policy Director at Engine, a nonprofit organization that advocates to policymakers on behalf of start-ups for policies that help grow the start-up ecosystem.
In her article, Wolbers cautions against assuming that a divided Congress won’t act to place more restrictions on technology companies in the coming year. Those restrictions might fall heavily on start-ups, which the tech industry depends upon for innovation.
“The 116th Congress includes several younger, more tech-savvy lawmakers, but the majority are itching to regulate (or break up) big tech. So if you thought the congressional hearings featuring CEOs from Facebook, Twitter, and Google were cringe-worthy, expect more memeable displays of tech-illiteracy as Congress tries to understand technologies like artificial intelligence, content moderation, and crypto-currencies,” she writes. “Unfortunately for startups, congressional desire to grab headlines by flogging tech giants could have negative consequences for the disruptors as stringent regulatory regimes tend to lock in incumbents.”
In addition to an overall push for greater regulation, Wolbers also foresees more focus on privacy, increased attempts by lawmakers to slow the rise of China as a tech leader, a new vote on NAFTA, and a continued effort by Democrats to repeal the FCC’s anti-net neutrality rules.
From a purely business perspective, I predict that 2019 will be a great year for tech. But I agree with Wolbers that tech will remain in the headlines, and that our industry will face growing challenges on the regulatory front.