Building the case for an Impact Tech ecosystem in the UK

At Nesta Impact Investments we launched our fund almost three months ago now. In that time we have seen some really interesting organisations come through our door. Over the next four years we expect to make investments in just 20 organisations, aiming to target our money at the most impactful, the most scalable, and the most viable social ventures in the UK.

One thing that really interests us is the use of digital technology to deliver impact at scale; Impact Tech, or what Google and others are coining ‘Tech for Good’.  This week we invited Robert Hodgkinson, MBA Student at INSEAD and someone who has done some serious thinking on this opportunity, to lay out the case for Impact Tech, the huge potential it has to address some of our most serious social problems and the importance of developing this sector.

This is the first in a series of guest blogs on this topic. 

Building the case for an Impact Tech ecosystem in the UK, Robert Hodgkinson, MBA Student at INSEAD.

Social and tech innovation have for too long been distinct disciplines in the UK. While social funders tend to favour analogue projects, the UK tech ecosystem largely focuses on the lower-hanging fruit of me-too products in consumer-facing industries. By failing to blend its cultural strength in social innovation with the technical talent in the burgeoning tech community, the UK has neglected the opportunity to deliver superior social outcomes, particularly in education and healthcare, by creating fundamentally innovative (and hugely valuable) tech start-ups. These sectors are ripe for disruption by committed entrepreneurs; the UK should start to build an Impact Tech ecosystem today.

Impact Tech is a collective term for citizen-focused technology that explicitly seeks to deliver specific social outcomes (such as EdTech and Digital Health). Technology is essential for transformational social innovation:

  • Scalable – high accessibility of technology within the UK population (particularly the near 100% saturation of mobile telephones) elevates technology as an effective means of distributing impactful solutions to large sections of the population. The potential scale of Impact Tech could enable credible financial returns
  • Cost effective – technology can help policymakers achieve ‘more for less’, delivering innovative solutions at significantly lower costs. Technology can radically transform public services with comparatively low levels of investment, a particularly attractive proposition in the current economic environment
  • Personalised – Impact Tech is predominantly consumer-facing technology that enables more personalised public services. Technology allows solutions that are both truly scalable and highly tailored to the individual’s requirements. The growth of the consumer internet also encourages more active participation in public services
  • Decentralised – Impact Tech is delivered by non-state actors to encourage more decentralised delivery of public services. The increasingly low cost of technology allow the general public to engage in the creation of tech-based solutions

As ever, the United States has already taken the lead, with 4% of tech VC being invested in Digital Health and $400m being invested in EdTech in 2011 alone. The corresponding European market for these sectors is tiny and not sufficiently defined to warrant any credible data. And yet the imperative for closer cooperation between technologists and social innovators is ever more pressing:

  • Fiscal challenges – the current economic climate is forcing a reworking of the provision of government public services. Innovative solutions are required that can produce ‘more for less’. In the US context, Bain argues that extensive use of digital health can help flatten the healthcare cost curve, saving up to 3.5% of GDP in the next ten years; the Boston Consulting Group believes that digital health could help save up to $700bn of waste in healthcare annually.
  • Cultural shift in public service – the paternalistic state is being replaced by a more citizen-centred approach that seeks to tailor the public service to the individual. The accessibility of technology enables more bespoke public service solutions.
  • Accessibility of technology – consumer technology, particular mobile phones, is mature with significant accessibility and reach. The Digital Citizen Pulse Survey, conducted by Accenture, suggested that 65% of UK citizens already use a website or portal to interact with public services.
  • Business models – for over a decade education and healthcare have been tipped as sectors ripe for tech innovation. Tech innovation and the development of a consumer-facing internet has led to more credible potential business models.

Impact Tech is the essential means for scalable social innovation and will enable government to deliver ‘more for less.’ It is early days for the sector, there are some organisations doing some impressive work to support Impact Tech such as Nominet Trust, Google, Tech City and specialist funds such as Nesta Impact Investments.  However, there still remain a lot of barriers to overcome in order to ensure we accelerate this sector and build an ecosystem around it which enables it to thrive.


You can comment on this piece on twitter @nestaimpact

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