Lessons from the SDG-driven tech innovation ecosystem

The world is off track to meet the SDGs by 2030. Tech innovation and digital social innovation are untapped resources in the progress toward the SDGs. Leveraging their contribution is critical if the SDGs are to be achieved by 2030.

The SDG-Driven Tech Innovation Ecosystem project is a practice-based consortium focused on clearing the way for meeting the United Nations (UN) Sustainable Development Goals (SDGs) through innovative tech-based initiatives. The consortium is comprised of the Global Steering Group for Impact Investing (GSG), The Israeli Forum for Impact Economy (Israel), FAIR (France), Social Impact Agenda per l’Italia (Italy), and maze (Portugal). Partners from Lithuania, Estonia, and Poland also collaborate on the project.

Why are tech innovation and digital social innovation relevant to the SDGs?

According to the latest Global Sustainable Development Report, published last June, progress on the 2030 Agenda[i] is far off track[ii]. At the halfway point, tech innovation[iii] and digital social innovation[iv] can be applied to accelerate progress toward the SDGs. According to a 2020 study from the World Economic Forum, deploying tech innovation solutions toward the SDGs could have a high impact across ten goals and enable 70% of the 169 targets underpinning them[v].

How is tech innovation contributing to the SDGs and how can it be leveraged?

From October 2022 to January 2023, the seven partners involved in the project mapped their own countries’ SDG-driven technology innovation and digital social innovation ecosystems. Based on the findings of each country, a thorough and aggregated analysis was conducted in the following months, informing several recommendations to better put tech innovation at the service of the SDGs.

The main findings and recommendations, organised by key market component[vi], are the following:

1. Market Participant

Key actors and entities providing impact capital (supply) or organisations championing impact-tech or digital social innovation (demand).

Findings:

• Public financing: there are several public financing schemes for the green and digital transition, but only a few expressly link their initiatives to the SDGs. These financing schemes support match funding grants for early-stage startups and equity investment into funds and startups. The funding opportunities for digital social innovation initiatives are limited compared to those for tech innovation.
• Private financing: only a few impact VCs have explicit SDG-linked portfolio management, and local VCs lack access and familiarity with emerging and underserved markets.
• Impact startups: the number of impact-aligned tech startups is growing, but only a small fraction of them explicitly reference their alignment to the SDGs and measure its impact as investors seem biased towards competitive technological innovation initiatives at the expense of impact.
• Digital social economy organisations: digital social innovation organisations are outliers in the traditional social economy sector as a few of the latter integrate digitalisation into their service delivery model.

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