Understanding the Five Types of Public/Private Partnerships
The public press is filled with announcements for public/private partnerships (PPP's), ranging from UN tracing of COVID-19 origins to development of electric vehicles and creation of waste treatment facilities. Managers are continually asked to join these partnerships, dedicating time, attention and money. Understanding the types by scope, charter and outcome will help in deciding which to join, and where to dedicate resources.
What are PPP’s
Public/private partnership is a term that term that encompasses four concepts about public versus private sector social-economic activity
Two political concepts
- What role should the government versus private sector undertake?
- What issues should the decision about public versus private sector actions encompasses, for example, infrastructure, common currency?
Two organizing concepts
- How should the activity be organized to meet a social-economic need, such as government regulations, private corporations, corporate citizenship, private ownership, non-government organizations?
- How should the public and private sector organizationally relate to one another in meeting the social-economic need? For example, should the government only provide funds or other types of resources; should the private sector advise the government or jointly deploy resources; should the private sector act primarily through common interest groups to advocate political positions or participate in joint programs, projects that require coordination and resource commitment?
Why are they relevant to the private sector?
Understanding the concept and types of public/private partnerships, and how the term is used in both media but also substantive discussions is relevant to private organizations management that must make decisions about where and in what role their organization will participate in a public/private partnership. The consequence of participation has implications for both an organization’s strategy but also it’s ongoing operations.
How to understand the types of PPP’s by charter and activity?
The term “public/private partnership” is generally used to describe five types of interactive actions between public and private sector organizations. The five types can be understood on a scale from the highest to lowest level of social-economic impact:
• Political- This level takes the form of communications on political philosophy and concepts that impact national and regional needs. The interactions are between elected and senior appointed government representatives and a one or combination of private sector organizations including political parties, think tanks, special purpose councils, multi-industry political alliances and multi-company political alliances.
• Policy- This level takes the form of communications on specific policy positions, normally from private sector organizations to both elected political representatives but also their professional staff that develops detailed policy positions. The types of policy positions discussed include both general social-economic topics such as foreign policy, tax, fiscal (budget) priorities and research & development, but also sector specific policy such as healthcare, transportation, education and energy. The forms of interaction range from legally recognized advisory committees to ongoing conferences or working groups that exchange information on policy issues for discussion and debate.
• Program- This level takes the form of government and private sector resourced, multi-year, activity that generates an intended outcome for impact in a specific area, such as an industry sector (transportation), a social function (education) or an economic input sector (research/development). The form of interaction between the public and private sector takes the form of jointly planned, governed and operationalized set of tasks leading to an outcome. The tasks are coordinated by one or more joint governance, management and working groups.
• Project- This level takes the form of a one-time activity that is intended to achieve a specific outcome, such as a study, test, demonstration project or group organizational outcome. The activity is government and private sector resourced. The interaction is organized as a jointly planned, managed and operationalized set of tasks leading to the outcome.
• Ongoing Operations- This level takes the form an activity where public and private sector organizations continuously co-invest and/or coordinate activities to meet a public need through coordinate public/private operational capability. The activity is organized through investment in functions that take the form of infrastructure, such as water or energy systems, or operating capabilities, such as healthcare distribution.
Why is the concept relevant? How do the different types impact a given social-economic sector?
The concept of a public/private partnership is discussed and takes form because the evolution of large, industrial societies has been made possible through the use of PPP’s to create the critical mass necessary to support economic growth, supply chain development and private sector incentive for investment. The United States has organized and implemented public/private partnerships for create of major transportation systems (rails, automobiles), agricultural growth (state agriculture schools and agriculture extension programs) and energy (petroleum exploration syndicates using USGS data). The case studies of social economic benefits from PPP’s include a) co-development of standards, b) lowered cost of capital, c) workforce development to meet new skills requirements and d) public infrastructure for commerce.
What are the most common PPP’s functions supported by US policy and law?
The United States has central and regional government law and practices that support three common types of PPPs:
· Public infrastructure- Such as roads, water systems, national parks and communication systems
· Buildings- Such as test centers, base conversions, office buildings and prisons.
· Innovation- Such as science programs, technology development and testing partnerships, and technical education programs to support science & technology