The UK prime minister Theresa May used her speech at this year’s World Economic Forum in Davos, Switzerland, to criticise US tech giants.
Technology companies still need to do more in stepping up to their responsibilities for dealing with harmful and illegal online activity.
However, this week’s speech also put the blame on tech investors. May said:
Investors can play a vital role by considering the social impact of the companies they are investing in.
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Shareholders should care about these social impacts because the business model of a company is not sustainable if it does not command public support and consent. And they can use their influence to ensure these issues are taken seriously.
What kind of impact could a statement like this hope to have? According to Rob Kniaz, founding partner at early-stage investor firm Hoxton Ventures, not much will come from a statement like this.
Kniaz made the point that in the UK, some of the biggest investors are international firms such as SoftBank, based in Japan, and US index funds. It’s unlikely that a national politician could impact such global investors.
Investors generally take neutral political positions in cross-border deals and endeavor not to put their own political views on display.
So even if investors in Facebook and Twitter were concerned about social impacts, it’s unlikely these issues will be raised.
In addition, it gets tricky when a politician like May starts suggesting how investors should act towards the companies they invest in globally.
She fails to account that requests like hers will also come from the Erdogans and Putins of the world – does she want Putin dictating the terms of Russian investors in UK companies? Should they influence companies to behave in more Russian ways?.
Instead, Kniaz suggests May should develop “sensible regulation” instead to tackle extremism in the UK. He added:
“The tools will always evolve – this isn’t a simple thing she can get instant results by leaning on investors.