Impact Investing in Disruptive Technologies

by Marta Maretich

Disruptive innovation is the talk of the tech world after Deloitte published its annual Tech Trends Report 2014 Entitled Inspiring Disruption, the report examines the changing landscape of technology with a focus on the how trends will develop over the next 18-24 months.

Drawing on the findings of an earlier report published by McKinzie last May, the study identifies 10 trends driven by multiple “disruptive” technologies. These are new technologies capable of creating new markets and value networks and, ultimately, replacing existing technologies. Cell phones, and the way they’ve supplanted fixed landlines, are a familiar example of a disruptive technology that has changed the world.

There’s more change coming, the report suggests, and it’s coming fast. Disruptive technologies are driving many of today’s important business trends; trends impact investors should be keeping an eye on. The report examines a number of these including:

Wearable computing bringing technology into new scenarios and transforming accessibility:

  • orchestrated cloud computing linking discrete systems for greater power and integration
  • artificial intelligence, machine learning, and natural language processing leading new, faster and more accurate real-time analytics
  • extended and highly integrated digital engagement facilitating closer relationships between organizations and customers
  • more influential roles for Chief Information Officers with a venture capital approach to leveraging IT assets

These technologies and the others mentioned are already starting to transform the way we work, shop, trade, communicate, travel and play, with accelerated change predicted for the near future. With such wide-ranging effects, it stands to reason that disruptive technologies will find applications in sectors close to the heart of social investors such as clean energy, healthcare, agriculture, conservation, education and even finance.

Disruptive technologies “present unprecedented opportunities to re-imagine how work gets done, how businesses grow, and how markets and industries evolve,” according to Kevin Walsh, head of technology consulting at Deloitte. Impact investors now have the opportunity to take an active role in that re-imagining by identifying and financing businesses that use the disruptive technologies to solve global problems.

Taking it further, now is the time for the sector to ask itself some important questions about disruptive technologies: How will we use them to transform the practice of investing for a triple bottom line, to make it more efficient, more profitable and more effective? How can they help us reach more beneficiaries, diversify our finance products and extend our markets? How will they improve our ability to capture and analyze data, build models and cement the business case for impact?

Finding the answers means the impact sector stands to create the most significant disruption of all: Replacing the old models of finance with new ones that can meet global needs and create a better future for the planet and its inhabitants.

Read the McKinsey report.
Read the Deloitte report.
Read about Clayton Christensen the Harvard professor who identified the concept of disruptive innovation.

Find disruptive impact deals.

Image credit: buchachon / 123RF Stock Photo

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