Impact investing is gaining traction in the investment community in everyone from socially conscious individuals to large money managers. Thanks to the efforts of philanthropists, foundations, and other advocates, more people are seeing the benefit of using money to fuel innovation and collaboration around the globe for socially conscious projects, and as a result more opportunities are arising. This is especially good news for those in the global health industry that are working to reduce the global disease burden.
The development of health technology is a notoriously long, difficult, and expensive process. Doing it well can often require funding sources from government grants to donations to impact equity and debt. Entrepreneurs in this field need to have good financial planning skills and a grasp of their timeline in order to make their projects work. Socially responsible investors can provide another source of funding to those in the industry so that their projects are more likely to succeed. Social impact investing (SRI) is a clear solution for meeting the needs of global healthcare startup teams from emerging countries, and it can work for everyone involved. Here’s how.
Medical and Communications Technology for Entrepreneurs The global health industry is the ideal platform for collaboration between entrepreneurs, academia, and other corporations working to develop necessary technologies. Thanks to our smaller, more modern world, these collaborations can happen around the world and reach the people that need the resources to work and innovate.
Our modern world has more and better opportunities to take on diseases around the world. Our ever-increasing understanding of biology means that we become more familiar with diseases every day. This gives entrepreneurs around the world opportunities to develop diagnostic, treatment, and prevention methods. In addition, mobile technology and internet use are incredibly widespread. What was once an unprecedented technology is now used to monitor patients and keep an eye on disease outbreaks. Research and development of healthcare technology can allow global health agencies to completely eradicate certain diseases and save many lives.
Financial Returns for Socially Responsible Investors SRI can lead to financial returns for the investors who include it in their portfolios, which is another reason for the sector’s growth. In a lot of studies, SRI funds performed as well as conventional investment vehicles. Health technology is an industry with a lot of growth thanks to a growing middle class and a rising demand for healthcare.
This is good news for developing economies as well. While some investors might stay away from investing in developing economies, there’s a lot of potential for growth in terms of innovation and capital. As the middle class grows and there is a greater need for healthcare, there will be a greater need to repurpose and adapt healthcare developments for global applications. This means that more entrepreneurs could receive more funding, explore more arenas, and ultimately drive necessary growth for investors and companies alike. Market and near-market returns aren’t just a matter of serving “highest impact” populations that don’t need the help: a longer, more sustainable solution can be found in serving emerging economies and the people that live in them.
Supporting Advisor Technology Entrepreneurs and organizations working on improving global health need to think creatively about how to fund healthcare innovations in emerging economies. There’s a lot more to the health marketplace that investors aren’t seeing, but a more complete picture will help educate them and improve healthcare in the world. Understanding why investors choose to invest in health, their approaches, and the trends that they see is vital for advisors who want to help their clients invest in the right SRI vehicles. Impact investors are drawn to health due to a combination of the amount of promise and growth that the sector shows. Socially conscious investors are also aware of the trends that make global health growth possible: they see the growing middle class, access to technology, information sharing, increased participation of multi-national corporations, and increased mobility as trends that lead to growth.
What socially responsible investors also realize is that most governments can’t take on the burden of funding these projects alone. The private health sector has to expand in order to meet the needs and compete with the public sector, and there are going to be some growing pains as a result. In order to provide the necessary options, donors, aid agencies, impact investors, and other funders need to really think about how their money is going to get to the organizations they’re supporting in order to meet their needs.
In order to assess the opportunities for investment in global health, there are some steps that any socially responsible investor should take:
• Identify where market failures occur and overlap. In the case of healthcare, a problem could be found with delivery, supplies, payment, technology, or logistics, depending on the population that it serves.
• Understanding where a particular enterprise is in its development and how it can handle those challenges.
• Determine what it needs to mature and grow properly, whether it’s a matter of timing, flexibility, structure, or the type of capital that it requires.
Social Impact Investing with Falcons Rock Impact Investments Finding investment opportunities is about understanding context and needs rather than doing what the investment business has been doing for years and expecting the market to shape itself around the flow of capital. Impact investors can strengthen many organizations simply by paying attention, learning, and taking advantage of opportunities.
Investing in the future of the world and everyone in it is part of why so many people are turning to impact investing. Properly invested money can ensure that innovations in global health and other sectors can happen, which is good for everyone. Socially conscious investors have more options than ever to put their money toward the social and environmental causes they believe in while earning healthy returns on their investment. Falcons Rock Impact Investments can help you find the right investment vehicles for your unique needs and challenges. Learn more about social impact investing with us to get started.