Technology & Impact — a perfect match

Photo by Photos Hobby on Unsplash

Science and technology are the engines that have moved humanity forward since the dawn of civilization. From mastering fire to inventing the wheel, through farming and controlling water, the invention of heavy machinery and all the way to AI and quantum computing — humanity is on a constant quest for progress. Each major technological breakthrough has brought us closer to the concept of freedom, efficient use of natural resources, and a better and equitable society.

Or has it?

On one hand, science and technology have helped humanity find cures to fatal diseases, master the natural elements, and furnish our modern way of life where everything is at our fingertips. On the other hand, these forces have also created social disparity, inequalities between people and countries, destruction of natural habitats and a depletion of Earth’s natural resources.

I believe it is our duty, as well as our privilege, to use the amazing resource of human ingenuity and imagination as a force for good.

Science and technology are mere tools in the hands of humans, and we get to choose what we do with this power. We can decide whether to use our talent, time and energy to create technological solutions to combat the world’s greatest challenges, or we can choose to deepen them.

Technological products are scalable by nature, which means their impact is scalable as well. Technology can be created to fight biases and discrimination, enhance social equity, and, ultimately, lead to freedom for all. Technology can repair our world and make it the place we all want to live in — in harmony with nature and with people.

There are, of course, technologies which are used as tools to ignite and worsen climate change and social disparity. From the usage of fossil fuels, to monoculture depleting the soil and all the way to addiction and abuse of people — there is surely no scarcity in examples. Maximizing profits on top of caring for our planet and people has led to some of the worst atrocities we now need to fix.

What if we looked at technology as an intentional force for bettering our lives? This mindset would enable us to build companies, products, and business models that have positive impact woven into their DNA. This new lens would widen the ripple effects of positive impact beyond direct shareholders, to improve the livelihoods of individuals, societies, and our planet.

In 2015, the UN defined humanity’s major challenges in the Sustainable Development Goals (the SDGs) — 17 goals that, if addressed by 2030, will enable us to thrive in a more equitable and sustainable world. These Goals are the framework for building our positive impact.

People tend to think that impact is only created in specific domains — such as healthcare, education or agriculture. This couldn’t be further from the truth. Making a positive impact on our planet and society is a mindset. Once this decision has been taken — it can be implemented through any kind of domain — from cyber to fintech, prop-tech, insurtech, mobility and devOps, just to name a few. All you need to do is to decide that your solution will be used to improve lives and that’ll lead you faithfully to the right business case, market, and product design to make it happen. Being authentic about driving solutions to address social or environmental challenges will lead you to find the right framework to make it happen and will also prevent “social washing”.

This is the idea behind impact investing — and it’s not so complicated. To start, all you need is the intentionality to use your technology to make the world a bit of a better place. But this is also the hardest part — thinking deeply about who the beneficiaries of your solution are and how you will serve them. Once this is defined, you’ll be surprised at how easy it is to build the product definition and business case. In fact, this exercise, called “Theory of Change”, helps entrepreneurs clearly define their target customers and the need for their solutions. Once this is done, you’ll need to measure and manage your impact, recognizing your potential negative impact so that you can mitigate it and achieve your set performance targets.

What about existing companies that already have a working product and would like to embed impact into their business? This entails thorough reviews of the founders’ and managers’ mindsets, the existing product and business case, and accrued positive and negative impact. Many companies are built on the basis of serving the Sustainable Development Goals without even being aware of it or recognizing the opportunity this affords them. Internal work needs to be done in order to implement this strategy and “migrate” existing companies to create measurable impact, but this is completely doable with intentionality and dedication of human resources.

And we haven’t even gotten to the financial success of impact-tech companies! In the impact investing market, there are many categories of risk-return expectations. Research clearly shows that technology companies don’t have to compromise their financial success to make a positive impact. In fact — if the positive impact of a company is weaved into the fabric of their product and DNA of the market case — it stands to reason that the more you sell, the more money AND impact you make. So maximizing profits and impact in parallel is not only possible, it’s a telltale sign that impact is well embedded into your company’s DNA.

More about the benefits of building a company based on these principles and migrating existing companies to make a positive impact in the upcoming articles — stay tuned!

Head of Impact & Sustainability at Pitango Venture Capital, Israel