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The age of public-private collaboration

Sep. 15, 2013 - 01:26PM   |  

Government is no longer the only game in town when it comes to societal problem solving. Society is witnessing a step change in how it deals with its own problems — a shift from a government-dominated model to one in which government is just one player among many.

Citizens, businesses, entrepreneurs and foundations often turn to each other rather than relying solely on the public sector to coordinate solutions. This is blurring, if not eliminating, decades old divisions of public and private sector responsibilities.

In India, the government has created a $1 billion “inclusive innovation fund” to spur private-sector solutions to some of the country’s knottiest problems. Meanwhile, the Cameron government in the United Kingdom launched a £600 million fund in 2012 to help fund new societal problem solvers.

Here in America, the Obama administration has introduced a bevy of initiatives to support a growing cadre of societal problem-solvers outside government, including a $50 million social innovation fund and a new Office of Social Innovation.

The White House also operates a Presidential Innovation Fellowship to pair top innovators in the business, nonprofit and academic sectors with top innovators in government.

Meanwhile, the U.S. State Department and U.S. Agency for International Development (USAID) have begun to pivot away from traditional aid in favor of public-private partnerships that support the growth of businesses that produce both financial and social returns.

Despite their benefits, these positive developments are still a far cry from what could be done across the U.S. federal government to fully leverage the capabilities of business, investors and social enterprises in societal problem solving. The potential impact is immense — tens of thousands of lives saved, millions of poor children educated and health dramatically improved worldwide at lower cost.

Here are five ways federal agencies can better collaborate across sectors to tackle key challenges.

■ Open up procurement. Government can use its buying power to shape and create markets for solutions to public problems. One strategy is to open public sector procurement to providers that compete with incumbents, including in-house resources. Lowering barriers to entry and simplifying the bidding process would allow competition that drives improved services.

■ Expand markets by funding outcomes. Prizes and challenges, social-impact bonds and pay-for-success approaches dictate outcomes instead of processes. By rewarding new solution providers, outcome-based efforts help to grow the supply side.

■ Fill gaps in market financing. Jointly funding projects with impact investors, foundations and businesses offers government a compelling alternative to reducing services in the face of budgetary constraints. Moreover, joint action supplies more innovative, customized offerings to citizens. Consider USAID and Skoll Foundation’s $44.5 million alliance that brings a venture-capital-inspired approach to fueling innovation in health, energy, governance and food security.

■ Embrace lightweight solutions. Sci-Fi authors used to worry that robots would automate all the work and dis-employ everyone but robot owners. Instead, technology is permitting us to coordinate work on a larger scale than ever. Leveraging the Internet for distribution, peer-to-peer networks, citizen co-creation, and so on can yield enormous savings and agility.

■ Connect government resources to solvers. From data to distribution networks, from financing to policy expertise, government has a host of resources that can help catalyze and scale cross-sector solution ecosystems.

Today’s biggest societal problems are beyond the reach of any individual entity or sector. Collaboration is not just helpful, but essential, for true progress.

William Eggers leads Deloitte’s public sector research and is the author of seven books on government reform. Paul Macmillan is the global Public Sector leader for Deloitte Touche Tohmatsu. This is adapted from their new book, “The Solution Revolution: How Business, Government, and Social Enterprises are Teaming up to Solve Society’s Toughest Problems.”

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