Listen to the episode:

Check out the shownotes through this link.

---

Are you interested in impact investing?

---

Our summary today works with the article titled Invigorating impact investment networks: Actor-actant engagement in a smart city environment from 2023 by Joanna Vogeley and Paul Ryder, published in the Journal of Social Entrepreneurship.

This is a great preparation to our next interview with Katarina Throssell in episode 236 talking about impact investing.

Since we are investigating the future of cities, I thought it would be interesting to see how impact investing can be connected to the future of cities. This article presents aspects for successful impact investing and the role of technologies, also revealing how network participants enhance distributed agency.

[intro music]

---

Welcome to today’s What is The Future For Cities podcast and its Research episode; my name is Fanni, and today I will introduce a research paper by summarising it. The episode really is just a short summary of the original paper, and, in case it is interesting enough, I would encourage everyone to check out the whole paper. Stay tuned until because I will give you the 3 most important things and some questions which would be interesting to discuss.

---

[music]

In recent years, there has been growing discussion about the societal contributions of traditional businesses and a rise in impact investments aimed at generating positive social and environmental outcomes alongside financial returns. These investments involve networks of social entrepreneurs, think tanks, financial institutions, and intergovernmental organizations working together through people and technology. Such networks improve strategic connections, communication, and impact measurement but can also have negative outcomes. Understanding the role of technology in these networks is crucial for enhancing their effectiveness. The paper introduces an Impact Investing Engagement Model, highlighting strategic networking, communication, and impact measurement as key areas.

The researchers integrated three theories to develop a unique perspective on dynamic impact investment networks. General Systems Theory helps understand how purposeful interactions intensify and accelerate network activities. Open Systems Theory explains network dynamics based on participants and discourses. Actor-Network Theory (ANT) traces engagements between technologies (actants) and people (actors). While existing research highlights multi-actor engagement and social influence, it often overlooks the significant role of technologies, especially in smart cities. Addressing this gap is crucial for understanding the efficiency and effectiveness of impact investing networks.

Impact investing networks involve interconnected relationships between actors and actants working towards shared goals. Systems Theory suggests that coordinated networks are more effective than the sum of their parts. Purposeful engagement with technologies enhances activities and outcomes. Open Systems Theory explains how these networks exchange inputs and outputs with their environment, showing local and global interactions. ANT analyses complex interactions, driving network effectiveness. Tracing these interactions helps improve the impact investing process in smart cities.

The study examines impact investment networks in Masdar City, UAE, a smart city addressing climate and sustainability challenges with advanced technologies. Using ANT, the research explores interactions between actors and actants. Sixteen in-depth interviews and document analysis revealed insights into these engagements, identifying key hubs like the Masdar City Institute and local social entrepreneurs. Snowball sampling helped map the network’s complex relationships, highlighting the importance of communication methods and cultural contexts for effective engagement.

The findings highlight three pillars of impact investing:

1. Strategic Networking: Key actors like investors and businesses use technologies to enhance engagements. Masdar City’s Accelerator Program shows the importance of networking for sustainability projects. Benefits include stakeholder engagement and access to R&D, but challenges like power imbalances and restrictive requirements persist.
2. Communication: Effective communication, supported by technologies, aligns environmental and economic goals. Entities like Masdar Catalyst and BP Ventures strengthen impact-oriented discourse. This leads to tailored financing narratives and strong network ties, but also pressure to conform to government agendas and selective capital distribution.
3. Impact Measurement: Critical for sustainability, impact measurement assesses the effects of technologies. Collaborations with entities like ADQ and IRENA enhance transparency and engagement. Positive outcomes include comprehensive impact comparison and digitization, focusing on sustainability.

The authors examined how understanding the relationship between people and technologies can strengthen impact investing networks. Their model highlights three key pillars: strategic networking, communication, and impact measurement. Technologies like mobile apps and platforms play a crucial role, enabling dynamic and effective networks. Strategic networking creates valuable linkages among actors, accelerating investment outcomes. Communication mechanisms foster trust but can also reflect restrictive power dynamics. Impact measurement, supported by entities, ensures transparency and effective evaluation.

Impact investing leads to interconnectedness and best practices but also power imbalances and pressure to conform. For traditional businesses, dynamic networks offer competitive advantages by focusing on environmental and social impacts. Understanding strategic networking, communication, and impact measurement is crucial as the field matures. Developing industry-specific indicators and transparent mechanisms by neutral specialists like IRENA is essential. Both positive and negative outcomes must be considered for trust, transparency, knowledge exchange, and accountability.

Impact investing marks a revolutionary shift in social and environmental development, driven by new concepts, technologies, and dynamic networks. It redefines traditional business engagements and fosters novel connections among individuals, organizations, institutions, and communities. Jurisdictions like the UAE, embracing impact investing out of necessity, are at the forefront of this change, challenging the narrow traditional views of dividends. To unlock the full potential of impact investing in driving positive social and environmental change, all stakeholders must actively collaborate to develop and strengthen dynamic actor-actant networks by focusing on strategic networking, effective communication, and robust impact measurement.

[music]

---

What was the most interesting part for you? What questions did arise for you? Do you have any follow up question? Let me know on Twitter at WTF4Cities or on the wtf4cities.com website where the transcripts and show notes are available! Additionally, I will highly appreciate if you consider subscribing to the podcast or on the website. I hope this was an interesting paper for you as well, and thanks for tuning in!

---

[music]

Finally, as the most important things, I would like to highlight 3 aspects:

1. Impact investing networks are complex ecosystems involving the interplay of human actors and technological actants, which can be effectively understood through the lens of General Systems Theory, Open Systems Theory, and Actor-Network Theory.
2. Three key pillars – strategic networking, communication, and impact measurement – are crucial for creating dynamic and effective impact investing networks that accelerate positive outcomes while also being aware of potential negative consequences.
3. Technology plays a vital role in facilitating actor-actant engagements within impact investing networks, enabling the flow of capital, knowledge, and resources towards social and environmental goals, but its influence must be critically examined.

Additionally, it would be great to talk about the following questions:

1. What are the most promising emerging technologies that could revolutionize impact investing networks?
2. How can we design and implement impact measurement frameworks that are both rigorous and adaptable to the diverse needs of different stakeholders and contexts?
3. How might we foster a culture of collaboration and knowledge-sharing among impact investing actors while also maintaining healthy competition and innovation?

[outro music]

---