One of the key themes from the Clinton Global Initiative (see my discussions on the Q&A with President Bill Clinton at the most recent CGI 2011 - Part 1, Part 2, Part 2A, Part 2B, Part 3) was the notion of leveraging public-private partnerships to drive solutions to large scale problems. For instance, in my discussion of shared value v. shareholder value in Part 3, I made some related observations [note that all of the bold text in this post is used for my own emphasis]:
A few other related observations from the above CGI panel discussions:
- Unilever CEO Paul Polman, in the discussion on redefining business as usual to drive sustainability, remarked that in today's social media environment, the people in Egypt were able to bring down their government in "17 days" and as consumers could bring Unilever down in "nanoseconds" if, as a company, they are not sensitive to their impacts on society
- Dow Chemical CEO Andrew Liveris, who has been vocal about the need for a manufacturing renaissance in the U.S., made several noteworthy comments:
- The need for "inclusive democracy" through a "golden triangle" of public (government), private (business), and non-profit (NGO) partnership
- A world view has finally arrived where we need to value the planet
- It is challenging to run long cycle investments with a focus on public good when - you are measured on a quarter-by-quarter basis, some investors don't fully understand the notion of long-term value, and there is ten times more money going around the world (from an investment standpoint) than you can deal with
- "Poor people are poor, not stupid", i.e., it takes a certain level of creativity to survive when one is poor
Liveris has previously stated that while he is a supporter of free markets, we should recognize that free markets don't naturally allow for strategic decisions at a country level and that public policy and government need to step in to address that - "I would not let free markets rule without also addressing what I want manufacturing to be 20 or 30 years from now". That is very much aligned with what I wrote about a year ago:
What I believe is sorely missing in the US today is any kind of broad strategic thinking or position on the type of manufacturing leadership that we believe the U.S. should continue to have in order to preserve our leadership and security over the next 50 years - and - a vision on how we should concomitantly engage with governments and private enterprises to make that strategy a reality. In the absence of a strategic long-term view and any substantive broad-based dialog with the U.S. business community (not in the vein of political talking points, but in the spirit of driving American leadership through enlightened policy and deep engagement), dreams of re-building US manufacturing leadership will remain out of reach.
The key motivation for public-private partnerships (PPPs or P3s) is that, often times, neither the public sector nor the private sector is able to completely shoulder the costs and responsibilities for solving serious large-scale problems - so, a PPP might therefore be a more effective solution path in those circumstances. Note that I use the term PPP to refer not just to the public and private sectors, but also non-governmental organizations (usually non-profits or NGOs) that are funded through public or private means.
PPPs are generally much more complicated to plan and execute than purely public sector or purely private sector projects. In the aftermath of the Great Recession, there has been increased skepticism in some circles about the effectiveness of PPPs in achieving their goals given that reckless private sector risk-taking on a large scale got socialized into public sector budgets. For example, Toby Sanger and Corina Crawley of the Canadian Centre for Policy Alternatives wrote: