Government and Private Sector Collaboration for Innovation

Government Strategy

Jeff Bartel

Chairman and Managing Director

Innovation drives competition and progress in all sectors, making it a critical factor for the success of both private entities and government agencies. Moreover, both organizations bring something to the table for innovation purposes, making collaboration an ideal option in many cases.

When Should Government and Private Sector Organizations Collaborate?

Private sector and public organizations should collaborate when:

  • They can align on a desired common outcome
  • The type or level of a challenge requires something from every kind of organization, such as government authority and commercial agility
  • A need arises that may draw on the resources of both sectors

Some examples of times when public and private sector collaboration can be essential include:

  • Public health crises (the COVID-19 pandemic is a recent example)
  • Times of economic strife (such as a period of recession or depression)
  • Periods when nations or societies are facing challenges that are extremely large in scope (such as climate change)

Why Do Government and Private Sector Organizations Collaborate?

Government strategy consulting and other private-public collaborations have additional benefits for both sectors besides the outcome of the work at hand. Some of the biggest reasons for these types of partnerships are summarized below.

Collaborations Build Public Trust

Public trust is an issue for governments and enterprises. During the COVID-19 pandemic, public views on how trustworthy the government was decreased. The majority of Americans did feel the United States government was somewhat or very good at keeping the country safe from terrorism, responding to natural disasters, ensuring safe food and medicine, and maintaining infrastructure. However, the majority felt the government was bad at protecting the environment, providing access to healthcare, handling threats to public health, helping people get out of poverty, and managing immigration.

According to the 2022 Edelman Trust Barometer, trust in government continued to decline following 2020. On the other hand, business is seen as a unifying force in society. Most people believe that businesses provide leadership and successfully execute plans to yield positive results when faced with challenges.

Public-private collaborations allow efforts to be accepted in a more trusting light that might be seen as suspicious if only governments were involved.

Collaborations Have a Record of Success

Collaborations between the government and the private sector have a record of success across a wide range of challenges. When businesses are involved in regulatory strategy, for example, the results can be more realistic requirements that industries can uphold while supporting the health of the market and positive outcomes for labor, the environment, or other concerns.

Successful collaborations help drive down costs (for businesses and the public), achieve goals, and provide positive outcomes more likely to work for all.

Building Relationships to Solve Problems in the Future

Present collaboration creates foundations for relationships that help solve problems in the future. For example, when public-private collaboration works toward environmental integrity now, it helps mitigate climate change issues in the future.

Government and Private Sector Collaboration for Innovation

Collaboration is a must-have when faced with immediate concerns like a natural disaster or health crisis. However, the government and the private sector should work together for innovation in a proactive bid for a better future.

What Drives Government and Private Sector Innovation?

The biggest driver for this type of innovation is increased economic and social success. Other motivators include optimizing resources, minimizing risks by sharing burdens, overcoming resource and data barriers, and supporting higher contribution levels and buy-in for ongoing support from various sectors.

Barriers to Innovation

Common barriers to innovation include a lack of leadership or accountability, fear that keeps projects from moving forward, a lack of resources, short-term thinking that traps organizations in the status quo, and an inability to deliver solutions “to market.”

Luckily, a collaboration between federal, state, or local governments and private sector organizations breaks down many of these barriers. When private and public sectors are aligned on the desired outcome, fears associated with perception are drastically reduced, resources are typically increased, and the integration of various thought processes makes short-term thinking less likely.

How Is Successful Innovation Collaboration Measured?

Success is measured via ROI. Collaboration teams should look at resources invested in the effort and the types of returns experienced. These returns may not be in the form of money or goods but increased trust, positive R&D developments, or the desired outcome. Traditional metrics such as financial returns can also be accounted for in determining success.

Examples of Successful Government and Private Sector Collaboration

Social Challenges

Business and public resources can come together to solve government issues or more considerable social challenges. One example is in India, where the ability to travel to urban areas to vote, bank, or access healthcare was limited in many areas. So the government worked alongside technology firms in the nation to plan and build a “digital highway” that provides virtual access to services to all of India’s citizens.

Urban Challenges

Urbanization and gentrification of cities may be suitable for local economies in some ways, but it causes a variety of challenges that are being met by public-private collaboration. Increasing property prices and pollution and displaced populations living in urban environments before gentrification are just a few of the obstacles collaborative innovations are helping to solve.

Working within a strategic issues management group that brings together resources from the public and private sectors, individuals, businesses, and agencies can achieve more.