Aug 09, 2018
Traditionally, investing has been all about financial gain. An investor puts their money into a company or project which, they hope, will bulk out their investment and pay back hefty dividends.
On the other side of the coin, we have traditional philanthropy. This involves investment in ‘good works’ – projects which work towards wider social or environmental benefit. A lot of hospitals, schools, charities etc have been launched by philanthropists.
In the past, philanthropy has been pretty much exclusively the preserve of the ultra-rich. However, we’re now seeing a rise in what’s known as ‘social impact investing’ – or just ‘impact investing’. This is a kind of blend between traditional investing and traditional philanthropy.
Rather than investing their money in those projects most likely to turn them a buck, ordinary investors instead seek out projects which will cause a positive social impact (and hopefully turn a buck as well!).
This all comes as part of a sea change in attitudes towards business. The 2017 Deloitte Millennial Survey revealed that nearly half of millennials believe that the purpose of business is (or should be) to improve or protect society and/or the environment. This is an abrupt about-face from the ‘Rugged Individualism’ of Reaganomics and Thatcherism (and it’s an attitude which is causing Millennials and their predecessors to bash heads, hard!). But it’s gaining traction.
The UK currently lags behind the rest of the world where Impact Investments are concerned. But the UK tech industry is pushing hard for us to catch up. Nearly a quarter of all European ‘Tech For Good’ organisations are based in the UK.
The Tech For Good idea holds that tech entrepreneurs have more power to benefit the world in practical, impactful ways than even governments do. A lot of UK tech companies buy into this idea, and are putting their money and talents towards solving the world’s most pressing social and environmental problems.
There’s a lot to do before Tech For Good becomes a household phrase. Investor networks need to join up, word needs to get out, and capital needs unlocking. But impact investment is undoubtedly on the rise – with UK tech at the fore.