public-private partnerships and how they
are an effective solution to complex
public policy problems problems we have
today and that are definitely going to
be with us in the future
large problems headaches problems
johns-hopkins problems and then we’re
these hands represent the billion people
looking for water every day that’s safe
and adequate and supply the two and a
half billion people looking for
sanitation because they lack it and now
900 million people who are elderly
defined as merely 60 years of age this
900 million people are going to grow by
56% between now and 2030 the 1.4 billion
and many of them are going to contract
non communicable diseases if they
haven’t already
diabetes heart disease cancers how are
we going to be prepared for the
public-private partnerships are
collaborative structures designed for a
specific purpose or project where
there’s a sharing of risks resources and
decisions this is different than other
other structures because they involve
governance it’s the sharing of decisions
that matters and when we look at these
two rocks formations and we see the
climbers we think of a partnership think
about their equipment as a resource
there’s specific skills to get up there
and how dependent they are on their
decisions and the decisions of the other
person but when we’re looking at this as
a partnership we want to think about
what’s my reference point to be a
partner is it has been my parents are
they partners and I identify with that
type of partnership is it where I work
perhaps I’m in a partnership a
partnership that’s an institution or has
become one and public-private
partnerships essentially our
institutional activities where people
make a tremendous individual difference
but they have to ask themselves who are
my other partners so do we think of
government whether it be the national
government the state government or
municipal government our governments our
partners in particular when I have a
complex problem but we also live in
communities and these communities
interact with the private sector and as
members of the community we are asking
ourselves all the time what is the
private sector doing with me that helps
me with the kinds of problems on concern
about and the private sector is saying
why can’t we get any energy from this
community or municipal government to
solve some problems around here where is
the facilitation for the partnership and
one of the reasons that facilitating
partnerships is so difficult is that our
skill set is often trapped by bias we
know that to partner with another party
means working with someone we don’t like
we don’t agree with but who we need for
approvals or we need for resources how
often in the nonprofit world do we look
at a donor and say oh you’re fantastic
and we’re thinking just give me the
money so I can do my job so unless a
public-private partnership has respect
trust and credibility
it will never be sustainable the
partners are not going to be able to get
together and stay together because the
government doesn’t trust the private
sector because of profit motives or
maybe communities don’t want government
to rezone around them in the name of
economic development whatever the issue
is
ppp’s require this to start but this is
a lot to ask for so as a practical
matter I’m suggesting we look at skills
vance skills that are necessary for
public-private partnerships one that’s
very relevant to the TEDx talk today is
negotiation because we’re asked to think
about how to negotiate our way through
other through different dimensions to
deal with obstacles and in particular if
we’re interested in innovation we have
obstacles and innovation is not exactly
the same as creativity it’s a process to
manage to seek opportunity to remove
barriers often through negotiation but
we want to have our strategic thinking
set up before we take these actions what
do we actually need to get it done and
who can do this with us the who involves
political management because often we’re
dealing across cultures across countries
across the culture of institutions and
political management skills are vital
and public/private partnerships and they
can’t be left just to the politicians we
are very focused today on how to do
things financially will it work
will it be economical what’s the
financial structure in fact many of my
students that’s really what they want to
know just give me the model but where
we’re going to learn in the cases I’m
going to cover today is the model
without the right assumptions is of no
value so we’re very focused on the
thinking that goes into assumptions and
then how to communicate the real risks
and probable outcomes and to do it as
transparently as possible so these
skills can’t be allocated to six
different people you have to be the
master of several of them and your team
has to be the master of all of them now
to make this work we want to go through
cases because this is the way you teach
public private partnerships and when we
look at this picture we know that this
park is magnificent clearly one of the
best in the world it ought to be because
of the 58 million visitors who come to
New York City every year 44 million make
their way to Central Park
in this park as great as it looks today
took a number of decades through the
Central Park Conservancy z– resources
risk management and decision making to
make this Conservancy work as a PPP it’s
not the only part PPP in New York and
each one like the rock formations is
different but it’s been very effective
because of the 44 million people there
going into that part because it’s free
yes open access yes
safe yes but they may not be aware that
it wasn’t always that way
the park was unsafe it was very badly
maintained it was dusty and abandoned
and it took communities and the private
sector to make that change and if we
look at this we have to ask what type of
Public Liability can a public-private
partnership convert to a public asset so
if we look at this abandoned elevated
freight railroad track on the west side
of Manhattan
that’s the Hudson River it’s not doing
anything and it hasn’t for decades it’s
been abandoned because freight trains no
longer go to these enormous buildings on
the west side of Manhattan where goods
would be dropped off manufactured goods
loaded on because New York was a
manufacturing center it’s hard to
believe but through imagination and a
change of process in the use of a PPP we
have the High Line the High Line is a
240 million dollar 7 acre project it’s
attracted 80 million in private sector
money 7 million visitors a year has had
an effect on the economic development of
the Chelsea area and the Westside a
different image with no economic
development apparently is this road the
Indiana toll road this is 150 mile ride
a road a public-private partnership
started by the governor of Indiana in
2006
it doesn’t look heavily traveled this is
not the New Jersey Turnpike this is a
major thoroughfare though why it’s
important
is that the revenue from tolls pays for
the economics of the partnership the 3.8
billion dollars that investors put up
but not enough because by 2014 this
public-private partnership went bankrupt
the assumptions used to estimate traffic
were wrong
the governor was smart he used the money
to pay down debt but also improve other
roads trucks went on other roads
diverted in order to lower their fares
and improve their profits something very
fast and very modern is a 17 billion
dollar Taiwan high-speed rail an
engineering marvel built through
mountains Rock built to resist typhoons
came in on budget on time and operates
on time 99% of the time except the
assumptions were too optimistic half the
riders who expected in the first two
years didn’t show up and the 17 billion
needed to be financed by banks and their
ability to be repaid was slower and more
partial than anybody wanted but there
was a negotiation here where the
government accepted the demand of the
banks to guarantee the loans good thing
how does this happen these are smart
people it happened because of
compromises the stations were built
where it was less expensive but not as
me not as many people were there they
didn’t raise the tolls on the highways
to move people from their car seats to
the train seats and it failed
financially but it went on operationally
because it was so well done so if we ask
ourselves public-private partnerships
this is pretty good stuff look at the
variety of problems from parks to roads
to transportation and certainly electric
power and telecom this is great stuff
but how many people were we impact tens
of millions of people but at the
beginning of the talk I talked about
billions of people so we have to rethink
the benefits of how to apply
public-private partnerships in
particular to healthcare and people who
have health and other needs house
going to work for them so we go back to
a set of hands in rural China and this
woman is one of 250 million elderly and
that number is on track to be four
hundred and fifty men just by 2030 the
elderly are an asset in China very port
and part of families and they they
require treatment in terms of their
future how is it going to work they need
operational capacity built for them
innovation that can be applied to them
and financial resources when we think
about assembling a public-private
partnership for the elderly just in one
country and there are large elderly
populations building in many developed
countries and certainly in emerging
markets we have to think of a whole new
army practically of human resources to
care for people and to do it under
government licensing and registration
and regulations that make sense and to
have assisted living facilities that are
appropriate and affordable and
sensitivity to the cultural implications
of the elderly in this particular
country and social policies to support
it and last we need technology because
I’m not talking about face time where
the grandparent is talking to the
granddaughter we’re talking about how to
connect people in terms of diagnosis to
allow prevention to be more prevalent
and impacting human behaviors
interaction with the elderly care
complex to do that the thought process
for public-private partnerships is going
to be changing to reach the scale we
need for these large problems we need to
think about a different construct so
we’re going to take all the things are
six skills that I mentioned earlier a
multi asset approach such as in the
Taiwan high-speed rail and we need to
look at behavioral change Central Park
works because people now respect it and
take care of it all public assets do
better when people are contributing to
their maintenance in some form
and when we have institutional
leadership institutional leadership that
is more steady-state where we feel that
we’re not just going to run from one
political cycle to the next but more
along the course of the life of the
asset or our needs how to think this
through
we need technology to help us think this
through
cognitive intelligence is on the horizon
now and applying it to healthcare and
particularly when we’re combining
prevention and treatment as opposed to
treatment alone and applying to people
whose awareness levels are low and how
to obtain information faster but we’re
dealing with billions of decisions about
billions of people and it’s not going to
take a lot of smart people to do that
it’s going to be technology plus smart
people plus government and the different
sectors working together so to do that
we want to understand the important
lessons that we’re trying to learn
through this talk one we have three
elements in public-private partnerships
that really count our communities that’s
where we are our communities where
public value needs to be enhanced where
there has to be protection of public
assets and where there has to be
long-term decisions that match our needs
over time particularly as we get older
or we have young people who need to be
educated we need to have a government
that is our fiduciary steady-state
fiduciary and a regulator not too hot
not too cold again a predictable
regulator and very important is that
government be a facilitator because
government can facilitate interaction
between communities in the private
sector when it wants to the private
sector we know from the case studies
will show up for financing if the
project looks reasonable they have the
money they want to participate they will
be efficient in these large projects
that we can be confident and can they be
innovative far more innovative I’m
afraid than most governments but by
having the government’s work more
closely with communities in the private
sector
innovation can be achieved through
public-private partnership so this is
the idea and this is what we can all
work on together in the future thank you [Applause]