Toward a playbook for public-private partnerships
This article is the first in a series on the role of PPPs in realizing smart, sustainable cities, systems and industries.
Public-private partnerships (PPPs) are a powerful organizing vehicle for taking on challenges and realizing opportunities — with the potential to transform cities, industries and societies toward smarter and more sustainable models.
PPPs are perhaps best known for facilitating formal collaborations to deliver hard infrastructure and development projects — think roads, bridges, bike trails and urban real estate developments.
Increasingly, "PPP" refers to both formal and informal collaborations between public and private players to develop all manner of local and regional "infrastructure," including for energy procurement, communications, integrated mobility, economic development, greenspace maintenance, waste-reduction, citizen empowerment and more. In some cases, PPPs are set up as platforms to generate a series of such projects.
Joel Makower, Mark Mykleby, and Patrick Doherty in "The New Grand Strategy" aptly observed: "Public-private partnerships, once considered a wonky novelty, are now becoming a necessity, both for governments and for private companies."
During the last century, the United States built its wealth supplying the acute demand for security across the globe in the form of conflict technologies and systems. Today’s opportunity is to build wealth by supplying the increasingly acute demand for a security more domestic in nature.
Research in "The New Grand Strategy" found three huge demand pools which give shape to this century’s demand: walkable communities, regenerative agriculture and resource productivity. Meeting these demands will require sustainability-driven designs, technologies and systems, with many realized only through public-private partnership.
Ultimately, quality of life is the core market driver at play here. Predicted Robert Sadow, co-founder and CEO of partner-centric Scoop Technologies — a company that brings commuters together in carpools by partnering with employers, municipalities and more — "PPPs will be helpful in most areas that impact quality of life. So, it’s a good model for lots of types of businesses trying to address human problems."
From formal to informal
Public-private partnerships range from very formally structured PPP platforms to informal collaborations where private companies address issues of public concern with or without contracted collaboration.
My colleague Paul Masson, a long-time practitioner of PPP design, outlined for me the broad range of public-private collaboration:
- Operating partnerships: public and private players coordinate doing what they already do, with minimal special arrangement.
- Advisory committees: policy partnerships that evolve the operational relationship between public and private players — for example, to integrate innovation into a regulated industry.
- Project partnerships: specific and bounded efforts which involve a commitment to sharing responsibilities, rights, costs and benefits.
- Strategic partnerships: often multi-project programs generating impacts over a long period of time.
The latter two partnership styles sometimes employ a membership model as an organizing structure where partners join a nonprofit organization, governance is handled through a board, and task forces are formed to conduct the work and make technical decisions.
At the GreenBiz 18 forum in Phoenix, a circle of passionate players gathered to help me launch this exploration into the state of the art of PPPs. They seek or operate public-private partnership for objectives ranging from: making commute carpooling work at scale (Scoop); to enhancing the sustainability partnership between cities and their small business communities (SuperGreen Solutions); to making movies "without making a mess" (Earth Angel). Others were facilitating circular resource exchanges (Eco-Efficiency Center) and seeking collaboration platforms to help evolve policy (Pepsico). I myself have been involved in PPPs ranging from functional sidewalk gardens organized by Friends of the Urban Forest (FUF); to the Cool Block citizen empowerment platform I helped create; to the global City Protocol Task Force I previously chaired.
Beyond our circle, participants at GreenBiz 18 were pursuing public-private projects far afield. For example, Sealed Air is working successfully with WWF and others across China’s changing poultry supply chain to address food waste and safety issues, with plans to engage the Chinese government.
In addition, many varied infrastructure-related PPPs are at play closer to home:
- The walkability-enhancing M-1 streetcar in Detroit, MAX light-rail in Portland and Eagle P3 project in Denver
- Other hard infrastructure projects such as San Francisco’s Presidio Parkway
- Communications projects such as New York City’s street-facing LinkNYC; and Huntsville, Alabama’s build-out partnership with Google Fiber
- Renewable energy procurement projects such as Massachusetts’ PowerOptions consortium and Utah’s Rocky Mountain Power agreement
- Greenspace maintenance projects such as New York City’s Central Park Conservancy
- Waste reduction projects such as Reimagine Phoenix
- Integrated mobility projects such as the ONETransport initiative
- Economic development projects such as the Eastern Market in Detroit
- Finance projects such as the Chicago Infrastructure Trust and the Financing Sustainable Cities initiative
Partnership-generating platforms are popping up as well. These include Envision Charlotte’s public-private-plus collaborative in North Carolina’s largest city; Salt Lake City’s Envision Utah smart-growth coalition; Spokane, Washington’s smart-city technology proving ground Urbanova; and Kansas City, Missouri’s innovative KCMO Smart City platform.
How PPPs play in cities
Public-private partnerships have a big role to play in the realization of smart, sustainable cities.
"The nonprofit organization we formed helps facilitate the articulation of city goals, and the process of exploring how to get there," reported Amy Aussieker, executive director of Envision Charlotte, a highly successful PPP which began as a project and became strategic. "Envision could have wrapped up after the success of its first project. But the platform was so successful that [the city and its partners] wanted more."Its leaders were asked to help jumpstart public-private collaboration in other cities through an Envision America workshop. So, how are people using the PPP language in other cities? "It’s all over the board," observed Aussieker. "It applies to toll roads, but people use it to describe all kinds of things they are doing, though they are not all formal or contracted."
Gordon Feller, co-founder and convener of Meeting of the Minds, an annual leadership summit on urban innovation in smart and sustainable cities, concurred. "Some PPPs are governed by regulation in their country: an agency works with a private company to operate an asset, and there are financial and legal obligations attached to that." But, he said, informal partnerships "are increasingly being developed by innovators to respond to situations happening very locally." In this category "there is a wider variety of actors and arrangements." Still, said Feller, "We’re seeing principles of PPPs relevant in the informal settings as well."
"The reason public-private collaboration is critical is that the smart city landscape is a multiplayer landscape. It’s not [simply] suppliers and customers. So, it is truly important to discover how they can work together," explained Sokwoo Rhee, leader of the Global City Teams Challenge at the National Institute of Standards and Technology (NIST). "This topic is very timely. It needs to be discussed and improved."
Preparing the play space
A successful PPP envisions an impactful and collaborative objective, defines a changed game with risks and rewards that will allow the vision to manifest, then plays the game fairly, well and together. This can be a great challenge — and a great opportunity.
The Urban Land Institute (ULI), long-time leaders in tracking the success of hard infrastructure and real estate PPPs, grounds the task with 10 core principles (PDF) to get public-private collaboration off to a sound start. It also offers definitions, tips, and more recently has described nine success practices through its Public/Private Partnership Council (PPPC). Meanwhile, community-based PPPs for green infrastructure projects are the expertise of the EPA, which offers this guide (PDF).
But are there playbooks for how to create PPPs for the wider range of objectives and "infrastructures"? What about for creating and operating the partnership-generating platforms that are emerging in smart cities? Would having playbooks here be helpful? Or might they actually impede creative collaboration?
"Successful PPPs provide a framework that others can use without being bound to," reassured Meeting of the Mind’s Feller. Envision Charlotte’s Aussieker agreed: "Shedding light makes it better."
NIST’s Rhee underscored the point: "It definitely won’t impede."
And what would a PPP playbook entail? "What’s interesting is to have examples of structures and results," said Aussieker. Agreed Rhee: "Having playbooks are helpful if based on real-world successes, which have worked in multiple cities, and they are happy. This is not easy."
Where to begin? "The first decisions on your roadmap are: What is your project, who are the partners, what would each get out of it?" noted Aussieker. "You’re always going to have these questions. But the answers change from phase to phase. How did you get all these partners together? How did you get them rowing in the same direction? This is an immensely interesting topic."
Rob Sadow of Scoop underscored the challenges. "There will be partner misalignments, each side trying to figure it out at the same time." He emphasized a powerful heuristic, useful to weave through any playbook: "Be patient. Keep an open mind and seek first to understand."
In the coming months, we’ll learn from players who are partnering across sectors in creative ways — especially within cities. Along the way, playbooks may gather or emerge, illuminating the art and science of building public-private play spaces. The more businesses and their potential public partners understand PPPs, the better. For the challenges and opportunities ahead are vast and invigorating.