On April 15th, we had a lively discussion on public-private partnerships with Robert Schneider, Senior Alliance Advisor, in the Office of Development Partnerships, Private Sector Alliances Division at USAID. Rob is the ICT partnerships lead for ODP/PSA, or as many may recognize better, the Global Development Alliances (GDA) office.
Do note that while Rob Schneider presented at the meeting, these notes are not his statements or the position of USAID – this is my impression of the cumulative input of all twenty-five Technology Salon participants.
Evolution of Partnerships
Public-private partnerships, of which GDA’s and PSA’s are a subset, have moved from what was once more of a corporate social responsibility activity to assuage international critics, to become a key competitive business advantage for companies that may also improve relations with host country governments and the local communities in which they operate.
“Avoiding Nigeria” has also become a common refrain, as companies want to make sure the communities in which they operate see them as net benefactors, not as pure extractors.
Good partnerships do not distort local markets; they drive increases in market size and new market penetration where there isn’t currently a market to begin with. To take agricultural inputs as an example, when a donor subsidizes business loans for an innovative, first-mover company expansion or guarantees borrower payback of inputs, the donor is helping private enterprise realize the market potential in a risky market. The company, now understanding the risks and returns, can price accordingly, which over time helps other companies do the same – leading to competition, not monopolies.
Incorporating Small Companies
Often, we only hear of partnerships with Fortune 500-type companies and there can be the impression that alliances overlook small American companies and local country firms. To an extent this is true, but mainly because big firms have the capacity to invest the staff time and resources in building partnerships, and the resulting activities have outsize impact – changing Wal*Marts purchasing habits impacts the global retail market.
However, USAID Missions are encouraged to have close relationships with local companies and many form partnerships with firms at the district and national levels.
Measurement & Evaluation
Funding for measurement and evaluation has been on the decline for years, which makes any level of assessment difficult. In addition, contracting mechanisms discourage long-term review of projects – expenses are not allowed after the contract period, which can be much too soon to see big impacts.
Even when evaluations are performed, they risk being suppressed. Politically, bad news is not encouraged by either public or private organizations, and private companies seeking to sustain a competitive advantage over rivals do not always welcome the publicity of good news.
Yet, social networking technologies like Facebook and Twitter, could allow greater beneficiary participation in evaluations without a large increase in resources.
Strategies for Success
Successful alliances usually are multi-party partnerships – several entities coming together to achieve common goals. This may be daunting at the onset, but by having several participants, partnerships have greater resources and can better survive the defection of a participant.
Concentrating efforts in countries with USAID missions that encourage public-private partnerships and are already bought-in to the benefits that alliances can bring is one way to increase the likelihood of success. However, not every Mission is focused on building alliances at the moment, so implementing partners should assess both mission and private sector appetite for partnership before spending a lot of time creating a partnership.
In addition, implementing partners should seek idea buy-in from all stakeholders – from private industry to USAID to local organizations – before they create a project or seek resources for it. This is key as staff turnover can derail projects if there isn’t deep organizational commitment.
For more participant impressions of the event, please check out PPPs and Sustainability by Matt Vanderwerff of IREX.