ImpactTech (or Impact Tech) is an emerging subset of technologies that is geared towards impact – in short, that aims to produce wide-ranging social, economic and environmental results.
An early definition, found in the June 2019 “Frontiers of Impact Tech” report from Good Tech Lab, refers to ImpactTech as “the intentional use of science and technology to benefit people and the planet”, and is defined as a subset of “Responsible Tech”, being “the use of science and technology in a way that minimizes harm to people and the planet”.
So, ImpactTech can then be seen as an assortment of technologies that work to drive those social, economic and environmental results.
What Are Some of the Different Types of ImpactTech?
ImpactTech can manifest in a number of different forms, including but not limited to:
- Technology that enhances the impact of operations, such as Arrival
- Technology that supports individuals in achieving impact, such as Ecosia.org
- Technology that improves existing processes and makes them more sustainable, such as Octopus Energy
- Technology that helps drive impact, through capturing, analysing and demonstrating, such as ImpactTracker
ImpactTech is frequently linked to the Fourth Industrial Revolution, drawing on emerging technologies such as AI, blockchain, quantum computing and the Internet of Things (IoT). Often, these technologies are seen as part of an ecosystem, and can be mutually beneficial in how they interoperate as they work towards complex impact.
Driving Forces Behind ImpactTech
A big factor in the rise of ImpactTech has been a significant increase in sustainability-conscious investing, particularly around ESG (Environmental, Social and Governance) – according to Bloomberg Intelligence, “global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.”
Similarly, Forbes reports that 77% of millennial investors consider ESG (environmental, social and governance) as their top priority when looking for opportunities (2020), and that 75% of millennials actively seek sustainable employers.
Impact and ESG go hand-in-hand – impact reflects the real-world outcomes of business activities in terms of social, economic and environmental output, which helps to objectively display progress towards ESG commitments.
Another driving factor has been increasing consumer demand for transparency in business models; “transparency is no longer an option; it’s a must.” The financial potential is also a significant driver, as addressed in Frontiers of Impact Tech:
“Removing 1000 gigatons of CO2 from the atmosphere could create a $45 Trillion net financial gain according to Project Drawdown, while SDG solutions represent a $12 Trillion annual market and 380 million new jobs by 2030, according to the landmark report Better Business, Better World.”
So whether it’s finding new ways to effect impact or even proving and improving the actual impact of existing activities, there is an increasingly wide range of options to meet different organisational and individual aims.
Where Does ImpactTech Call Home?
At a macro level, Europe is the primary hub for ImpactTech globally, with €6bn injected into European impact startups in 2019 – representing over 15% of all VC investment in the region. But the most prominent single location is London.
According to UK Tech News, the “VC investment into London’s purpose-driven tech companies has increased by almost 800% (7.8 times) since 2015, compared to 3.1 times in Europe as a whole… in 2020 alone, the London-based impact tech companies received $1.2B (approx £910M) in VC investment from January to October. So far, London’s impact firms have secured 429 deals between 2015 and 2020, more than any other city globally.”The sheer number of ImpactTech options means that there is a wide range of applications and numerous requirements that can be addressed. For example, this report from Danske Bank examines data from 1,240 Nordic impact start-ups – which is still less than the number in just the UK.
The Relationship between ImpactTech and DeepTech
ImpactTech can often be related to DeepTech – typically, problem-orientated technology driven by a particular scientific or other significant breakthrough rather than developing an existing concept or responding to a pressing market need. As a purpose-driven initiative, DeepTech is often expected to have more profound positive social, economic and environmental impacts.
DeepTech also thrives off ecosystems – e.g. multiple cross-disciplinary stakeholders and converging technologies, working together to achieve a common objective. Both approaches look to solve highly-complex challenges through collaborative co-ordination; but while “83% of deep tech ventures are engaged in building a physical product”, ImpactTech can still be software-based.
ImpactTech software ventures typically benefit from modern technology platforms, such as those provided by large-scale cloud service providers that by nature reduce the impact of running premises-based systems, and are naturally geared for remote development and collaboration.
How ImpactTech Can Support the SDGs
The world-critical COP26 conference is currently ongoing, where the lack of progress towards the UN’s Sustainable Development Goals is a critical theme.
One of the advantages of ImpactTech that is geared towards the measurement of impact is that it can help align activities with particular SDGs, and then help track progress, as well as how changes in strategy or behaviours can alter the actual impact.
One example of this is the Vertigo Ventures Impact Ecosystem – which includes ImpactTracker’s innate feature for mapping activities and projects to particular SDGs, and then the ability to publish this onto the public collaboration platform, TrackImpact.org. Helping to create transparency for not only impact but also SDG progress can have significant benefits for organisations, and for social, environmental and economic impacts.
If you want to discuss how ImpactTech can help further your own impact agenda, then please get in touch!
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