It used to be that public-private partnerships (PPPs) were a way for governments to outsource operational and/or financial risks (e.g. large infrastructure projects)…or just do things more cheaply, usually through rigid government contracts. Now we’re seeing PPPs evolve into a motley crew of players ranging from NFL stars to large multinational corporations to astronauts to tree-hugging campaigners coming together to solve a growing diversity of complex social problems traditionally in the exclusive domain of government agencies.
How these PPPs are taking shape in practice – and what it will take to sustain and scale them – was the topic of last week’s lightning round of talks on innovative partnerships and social innovation, organized by Deloitte and co-sponsored by Wharton’s Social Impact Initiative, New Profit Inc., and 1776.
Here are my main take-aways from these sessions:
(1) Finding the “right” partner is easier said than done.
Given the diversity of players involved in social issues today, identifying the “right” partner is difficult and not as straightforward as it used to be. It requires looking beyond the usual suspects, to understanding the entire “ecosystem” of players that might care about any given issue. The problem is that the innovators who have the solution to your problem are often 8 degrees removed from where you think they are, said NASA’s Jenn Gustetic. So how do agencies overcome with this?
- NASA, for one, does it through prizes and challenges. They pay for access to existing communities and source their problems to thousands of contractors from various fields and reward the best idea. The 2009 second-place winner of an astronaut glove challenge was a stage designer that stitched the wings used by Victoria’s Secret models and now designs for NASA full-time.
- Seventy percent of applications submitted to USAID’s Development Innovation Ventures, an open competition supporting innovative solutions to development problems, have come from organizations that have never done business with USAID, according to USAID’s Chris Jurgens. He also talked about Global Development Alliances, USAID’s flagship model for engaging the private sector.
- More interesting is a new DC-based startup hub called 1776, which aims to connect social entrepreneurs to the resources they need to scale their ideas, whether it’s seed capital or the policy gatekeepers sitting down the street from them. They’re all about creating “density” and playing a convener role among seemingly unlikely partners in the social space. Very cool.
(2) Creating a “win-win” is key to sustaining (and scaling) these partnerships.
From the perspective of many in the government and nonprofit sectors, the challenge in engaging the private sector is getting them to “care” about social issues. The White House’s Jonathan Greenblatt responded to this best: regardless of how “socially minded” a company is, it’s always going to care about the bottom line, period. It’s not companies that have changed – but rather the economy in which they operate.
Companies are finally realizing that poor people are customers too – not just aid beneficiaries – and are thus responding to previously untapped business opportunities. The challenge is to find the sweet spot for collaboration. And because not every social problem will have a market-based solution, some problems will remain best handled by governments.
(3) Measuring impact is hard without a common language.
The lack of common metrics to measure impact is emerging as a common problem to scaling impact investing more broadly. More on this later.
I hope these talks are the start of an ongoing conversation that includes: identifying the right problem for PPPs (not just the right players); overcoming their practical challenges (i.e. government procurement); figuring out the appropriate role of government; and moving PPPs from fringe to mainstream within agencies.