Most people never think about investment banks when they go about their day. But their work quietly shapes the world we live in. From the highways we drive on, to the energy that powers our homes, to the retirement funds we depend on, investment banks play a hidden but essential role in making these things possible.
While their work may seem far removed from everyday life, investment banks help businesses grow, fund public projects, and keep financial systems running smoothly. This article explains how their work impacts jobs, infrastructure, innovation, and economic stability in ways that benefit entire communities, often without people realizing it.
How Do Investment Banks Help Create Jobs and Grow Economies?
One of the most direct ways investment banks support society is by helping businesses raise money to grow and create jobs. Companies often need large amounts of funding to expand operations, enter new markets, or develop new products. This is where investment banks step in.
In 2021, Rivian, an electric vehicle manufacturer backed by Amazon and Ford, raised over $11 billion in its initial public offering on the Nasdaq. This deal, led by banks like Morgan Stanley, J.P. Morgan, and Goldman Sachs, was one of the largest U.S. IPOs in recent years. The capital raised gave Rivian the resources to expand its manufacturing operations, hire thousands of employees, and compete in the fast-growing electric vehicle market.
Public markets play a huge role in job creation. According to the World Federation of Exchanges, companies listed on stock markets employ millions of people worldwide. Many of these companies went public with the help of investment banks, making it clear how their role in capital raising fuels economic growth far beyond the financial sector.
How Do Investment Banks Fund Public Infrastructure?
Governments often rely on investment banks to fund large infrastructure projects that improve public services. These projects require billions in upfront investment—far more than what most cities or countries have available in their budgets. Investment banks help by structuring and selling bonds to investors, giving governments the funds they need to build and upgrade critical infrastructure.
A great example is the $4 billion expansion of the Los Angeles International Airport (LAX), one of the busiest airports in the world. To finance this massive project, the City of Los Angeles worked with banks like Citi and Bank of America to issue municipal bonds. These funds helped build new terminals, improve transportation links, and support thousands of construction and airport jobs, all while preparing the airport to handle growing passenger traffic in the coming decades.
Municipal bonds like these are essential for maintaining roads, schools, hospitals, and energy systems. Without the help of investment banks, many cities would struggle to fund these projects in a cost-effective and timely manner.
How Do Investment Banks Support Innovation and New Technologies?
New technologies often require large upfront investments that are too risky for traditional lenders. Investment banks help innovative companies secure the funding they need to bring new ideas to market.
Take the example of Spotify. When the music streaming company went public in 2018 through an unconventional direct listing, investment banks like Morgan Stanley and Goldman Sachs played a key role in managing the process. By skipping the traditional IPO route, Spotify avoided raising new capital but gained public visibility and gave early investors the ability to trade shares openly. This move allowed Spotify to expand its global reach and continue transforming how people access music worldwide.
Another example is BioNTech, the German biotech firm that partnered with Pfizer to develop one of the first COVID-19 vaccines. Before its breakthrough, BioNTech raised hundreds of millions of dollars through investment banks, including a successful IPO in 2019. That funding helped the company advance its mRNA research, which later became critical in the fight against the pandemic.
These stories show how investment banks help turn risky ideas into world-changing businesses by providing access to the capital markets.
How Do Investment Banks Help Stabilize Markets in Times of Crisis?
When financial markets face disruption, investment banks often work behind the scenes to keep things running smoothly. One example is the role banks played in stabilizing markets during the COVID-19 pandemic in 2020.
As global markets faced record volatility and companies rushed to raise emergency funding, investment banks like Barclays, Citi, and Goldman Sachs worked quickly to help corporations issue new debt. U.S. companies raised over $1.7 trillion in corporate bonds in 2020, a record-breaking year for debt issuance. This helped businesses survive lockdowns, maintain operations, and avoid massive layoffs during one of the most uncertain periods in modern history.
These efforts show how investment banks help prevent larger economic damage by providing liquidity and market access when it is needed most.
How Do Investment Banks Support Growth in Developing Countries?
Investment banks are not limited to supporting big corporations in wealthy countries. They also help finance projects in developing markets that improve quality of life for millions of people.
In 2020, the Asian Development Bank worked with banks like HSBC and Standard Chartered to raise funds for clean energy projects in Southeast Asia. These projects focused on expanding solar power, wind energy, and energy storage solutions in countries like Vietnam and Indonesia. The investments not only helped reduce carbon emissions but also created jobs and improved energy access for local communities.
Another example is the expansion of mobile banking in Africa. Banks like Citi and Standard Chartered have provided financing and advisory services to telecom companies building digital financial services in regions where traditional banking is limited. This has helped millions of people access mobile money platforms for payments, savings, and small business transactions, supporting economic inclusion in areas with little access to formal banking.
Why Does This Matter to Everyday People?
While investment banks might seem distant from daily life, their work touches nearly every part of the economy. They help companies grow and hire more people, fund the roads and airports we use, support the technologies we rely on, and keep financial markets stable during crises. They also help developing countries build the infrastructure needed to improve living conditions for millions.
Whether you are using a streaming service, flying through a modern airport, working for a growing company, or benefiting from clean energy projects, investment banks have likely played a part in making that possible. Their work may not always be visible, but their impact is felt in ways that shape lives, communities, and economies around the world.