Executive Summary and Main Points
In a conversation with McKinsey’s Alexandra Nee, Maya Chorengel, a pioneering figure in impact investing, discusses the evolution and current state of the sector. Chorengel shares insights from her tenure as a co-managing partner at The Rise Fund, an $8.8 billion impact investing platform by TPG. The discussion highlights key innovations like the shift in focus from ventures to growth and buyout equity investing and the expansion of climate-related investments compared to more modest growth in the social sector, including education technology. Chorengel stresses the significant potential for investments that create societal good without sacrificing returns, paving the way for strategic investments in areas aligning with the UN Sustainable Development Goals (SDGs).
Potential Impact in the Education Sector
The transformative growth of impact investing, particularly in areas such as education, can drive investments towards edtech solutions addressing global access challenges. The incorporation of substantiated impact and financial returns metrics could set new standards for Further Education and Higher Education investments. Moreover, the advent of Micro-credentials provides a ripe avenue for innovative funding opportunities, potentially attracting impact investors focused on scalable social benefits and returns. As investment trends evolve, we can anticipate strategic partnerships leveraging digitalization to cater to a global student body and advance international learning objectives.
Potential Applicability in the Education Sector
AI and digital tools offer promising applications within global education systems. For instance, leveraging impact investing to sponsor AI-driven personalized learning platforms can bridge educational gaps. Such digital initiatives could gear towards inclusivity and global scalability, speaking to impact investors seeking quantifiable education betterments. As digital transformation accelerates in higher education, investment in edtech infrastructure could also align with goals for enhanced access and equity, meeting both investor expectations for impact and the growing demands for digital competencies in contemporary job markets.
Criticism and Potential Shortfalls
A critical analysis of the impact investing sector suggests potential issues such as the risk of oversimplifying complex social challenges, like education disparities, for the sake of investment appeal. Comparative international case studies might reveal varying success rates in different geographies, prompting questions about replicability and adaptability across cultures. Ethical considerations, such as the balance between financial returns and true social impact, also come into play. Potential politicization, as observed in certain geographies like the US, could impact funding and regulatory support for educational initiatives.
Actionable Recommendations
For international education leadership, tactical approaches can involve identifying and supporting edtech models with proven track records of contributing to impactful educational outcomes. Leaders should seek partnerships with investors sharing a commitment to long-term societal good and devise clear frameworks for measuring educational impact. Furthermore, engaging in knowledge-sharing consortiums can spread best digital practices swiftly, capitalizing on the collective strength of impact-focused investments. Additionally, international educators may benefit from advocating for policies that foster a conducive environment for impactful edtech investments.
Source article: https://www.mckinsey.com/industries/private-capital/our-insights/maya-chorengel-on-building-the-impact-investing-industry