Partnerships between companies and government, commonly known as public-private partnerships, are nothing new for business. Over the last two years, however, BSR has seen a significant uptick in interest from companies in partnering with governments. This is likely due to two main factors: the growth in the role of national governments in addressing sustainability challenges, and the increasing opportunities for companies in emerging markets.
Even as the economic recession has strained companies’ resources—in some cases diminishing resources available for corporate responsibility initiatives—the role of government as a driving force in society and the global economy has grown substantially. In the United States, for example, the Obama administration has funneled approximately US$787 billion into an economic recovery that includes support for clean-technology businesses. Governments around the world, from China and India to Turkey and Argentina, have also significantly increased social and economic investments in response to the financial crisis.
At the same time, an increasing number of companies have sought opportunities in developing markets, particularly in the global South. In some cases, they have turned to public-sector partnerships to join existing or create new economic and social development programs that can help their business gain the social license to operate in these regions.
The parallel emergence of these trends has led many businesses to consider opportunities to partner with governments as a way to share resources and gain access to new expertise in development issues. Nonetheless, many myths about government partnerships persist and inhibit transparent and trusting collaboration. Through BSR’s recent work on the guide “Partnering with USAID,” we have learned that many of the myths are just that—and they’re worthy of debunking.
Myth #1: All companies have to do is write checks.
There is a longstanding assumption among companies that the primary role for the private sector in public-private partnerships is that of chief financier. In a time of economic stress, this can be a deterrent for companies considering partnerships.
However, our research has shown that governments are often interested in much more than a company’s financial assets. While companies aren’t completely relieved of these financial contributions, government agencies often match funds.
Aside from financial support, company contributions can come in many different forms. For example, companies can provide business insights and a market-driven approach to issues, a method that governments lack. They can also bring specific knowledge and skill sets to partnerships through training and in-country support. Perhaps most importantly, companies can provide rural farmers and entrepreneurs with access to markets, thus contributing to sustainable economic growth.
S.C. Johnson & Son, which partnered with the U.S. Agency for International Development (USAID) for a project in Rwanda, illustrates how: With USAID, the company helped farmers set up a co-op and better leverage technology to improve production practices and stability in S.C. Johnson’s supply chain for pyrethrum, a key ingredient in some of its consumer insecticide products. Without the partnership with S.C. Johnson, there wouldn’t have been a clear access point to the global pyrethrum market. For its part, USAID provided support for farmer training programs, which helped to ensure that S.C. Johnson not only received more responsibly produced pyrethrum, but also a more reliable product.
Myth #2: Government bureaucracy is unconquerable.
Governments are known (sometimes deservedly so) for their bureaucratic approach. For companies, trying to navigate that bureaucracy can seem like a waste of valuable time. Yet BSR’s work with companies and government agencies has shown that bureaucracy isn’t as unmanageable as it seems—and it isn’t unique to government.
Just as in large, multinational companies, the key to overcoming institutional bureaucracy is in finding and developing a strong relationship with the right person. Advocates within the government—even if they are in a different department or agency than the desired or ultimate partner—can help companies identify the right offices and contacts, provide insights on government priorities and partnership opportunities, and offer guidance on navigating bureaucratic processes and contracts. IBM, for example, built on existing relationships with the U.S. Department of State to develop a partnership with USAID focused on telemedicine in Pakistan.
Another tactic is determining the key decision-makers and approaching those people directly. Often, bureaucratic negotiation can be circumvented if you are in the right hands from the start. For example, in USAID, the majority of program budgets are held at the country level, in USAID missions. However, many companies try to start at the headquarter level and waste time before they are ultimately redirected to the country-level mission.
Myth #3: Government partnerships don’t provide a strong return on investment.
Many companies struggle with whether the benefit of sharing financial burdens is worth the effort; however, our experience has revealed multiple and unique values from government partnerships.
First, governments are more capable of bringing significant financial resources to collaborations than many other types of potential partners. Moreover, governments bring other benefits that companies wouldn’t be able to access on their own. For instance, collaboration with government can bring credibility to companies’ efforts and can open up doors to other governments and stakeholders that might be reluctant to engage with companies otherwise. According to Procter & Gamble’s Carolyn Brehm, the company’s partnership with USAID “is like getting a Good Housekeeping seal of approval. They bring a lot of legitimacy to our initiatives, particularly when we are entering new markets.” And like companies, governments also bring unique knowledge and skills in economic and social development to these partnerships.
Although public-private partnerships may be a long-standing approach to addressing some of society’s and businesses’ most pressing challenges, we believe there is room for companies to improve these partnerships for greater impact. And with the recent increase in the role of government and interest in mechanisms for resource-sharing, we look forward to hearing more about how companies are overcoming the myths of partnering in order to advance corporate responsibility initiatives around the world.