Financial mechanisms such as social impact bonds can accelerate social policy innovation and include private sector finance for health initiatives targeting early childhood development.

Early childhood and adolescence offer an unparalleled opportunity for investment in human capital, including the prevention of NCDs. Over half of the 36 million annual NCD deaths result from behaviors that started or were reinforced during adolescence, highlighting the long-term health potential of focusing efforts on nurturing a healthy generation.

Innovative financial mechanisms can accelerate social policy innovation and multiply societal benefits by funding proven initiatives, such as educating and supporting parents or delivering services directly to children. For example, Social Impact Bonds (SIBs) that establish “pay-for-performance” contracts between governments and investors can direct private capital towards these goals by allowing investors to share in the gains. SIBs have attracted a great deal of interest and are a viable means of funding pre-natal, early childhood, and pre-school services as well as home visits – all of which are relevant to the prevention of NCDs.

There is a strong economic rationale behind preventing new generations from repeating the mistakes of their parents. Return on investment factors of 9 to 20 are common when evaluating key preventive health services. However, as the benefits often materialize several years or decades after intervention, short term public budgets tend to overlook this low-hanging fruit.

Later in life, financial inclusion, through health insurance schemes for example, is vital to support persons who do eventually develop NCDs. This support could shield households from the excessive health care costs that push millions into poverty every year. Increasing access to the large selection of cheap generic drugs suitable for NCD treatment could be yet another approach to alleviating financial burdens and keeping people healthy and productive throughout life.

Survey Findings

As this market opportunity places a great focus on developing new finance mechanisms, the response from the finance sector is of special interest. Respondents in this sector are optimistic on the market opportunity’s potential positive impact on business in general and to the likelihood that this opportunity will inspire new business ventures. However, when compared to other market opportunities surveyed in 2014, then it is placed at the lower end of the range. The same goes for the finance sectors assessment of the potential positive impact on society from pursuing this market opportunity. Respondents from other sectors assess the market in similarly. Most notably is it that the respondents from the service sector are very optimistic about the market opportunity’s potential positive impact on business.

This market was surveyed globally in 2014 by more than 5500 leaders from both the public and private sectors. The survey was conducted in collaboration with the research company YouGov. The survey results were originally published in the Global Opportunity Report 2015.

Global Goals addressed