Capacity Development and Public Private Partnerships are hailed as global policy priorities in the Sustainable Development Goals outcome document. The United Nations Secretary General’s “Synthesis Report” provides strong guidance regarding what Sustainable Development should look like and what world leaders must do over the next 15-20 years to achieve it. After years of crafting the “what”, the years ahead must focus on “how” to get it done.
In the world of complex Sustainable Development challenges, the solution(s) to ensure public and private strategies and program outputs respond to localized demands is a puzzle, where any number of rural communities, organizations and institutions may hold different pieces.
It is our joint challenge how we can become better in establishing and applying, multidisciplinary collaboration and approaches across themes and countries. In order for that to happen organizations need to break away from existing silos of specific expertise and have a more inclusive approach that brings together different disciplines. Of course, such collaboration is already happening at many places but we need to become smarter to seek out and identify potential partners with fresh perspectives that can help us address the challenges we are facing.
|Experiences from the corporate sector reveal that 50% to 70% of partnerships fail prematurely. While partners often have goals in common, they also have individual objectives that do not necessarily complement one another. In addition, the partners may have a variety of capacity related differences, conflicting priorities and interests that present obstacles to effective collaboration (The Broker Online, 2014), resulting in ineffective or even failed interventions which could have been avoided, and be addressed by conducting (pro-poor public private partnership) assessment methodologies (which Development Connect developed and tested in Asia, Africa and Latin America).|
Integrating multiple perspectives at an early stage of identifying context and priorities is essential for designing successful collaborative arrangements and interventions.
To extend services to the poor governments need to adopt pro-poor policies and put in place regulatory regimes that effectively and consistently coordinate and oversee the achievement of poverty alleviation targets, whether delivery is undertaken by the public or the private sector.
It is the responsibility of governments, in close consultations with all stakeholders, to define these targets, make necessary regulatory changes, and to build them into contracts with appropriate incentives for private operators and other non-state providers to meet service delivery targets of importance to improve value chains, and enforceable penalties for failure of doing so (UNDP/PPPSD, Visser and Brandes, 2011).
Another area for government engagement is in providing an enabling business environment for creating business incubators and networks. From this perspective, governments should not only be a source of regulation and policy formation, but also encourage judicial reform and procedural justice in administrative processes (such as property rights).
Active policy steps to foster business growth and job creation in national youth employment strategies, policies to increasing information and market access, and better integrating rural urban (food) linkages are important too. Especially when institutions are weak, governments should encourage and assist businesses in (preparing for) complying with global accreditation (fair trade) standards. Investments should be geared towards improving financial literacy of entrepreneurs, their ability to develop business plans should complement business training, and specific technical support to engineer growth in value chains and unreliable supply chains should be firstly assessed and supported. Unfortunately and yet, we do not (always) have that information at hand.
|Governments cannot deliver a sustainable future alone. The (corporate) private sector has an important role to play as well to accelerate innovation and diffuse technologies. Levels of private finance dwarf international public finance, acknowledging that directing (new) private funds to (research) programs that reach the poorest in the value chains, and protect the environment requires in-depth knowledge about investments opportunities.|
Private sector involvement should not focus exclusively on the large agribusinesses, but should find ways to invest in smaller-scale, less sophisticated methods of delivering added value that suit small agricultural (women-led) businessea, like storage, transport, tools, primitive processing equipment, ICT services, micro-finance, and knowledge transfers, and focus on ways in which geographical integration processes can stimulate efficient food distribution.
According to the African Development Bank Group (2013), the majority of SMEs in Africa operate informally, with nine out of ten rural and urban workers in Africa engaged in informal businesses. Formalization is often mentioned as a way to weed out businesses with little growth prospects and to support those small firms which have the potential to raise their productivity and number of employees. Yet the reality is complex. Small and Medium Sized Enterprises (SME) often face the choice between complying with high regulations and incurring costs which threaten their viability or remaining informal, which prevents them from being eligible for bank credits and vulnerable to corrupt public authorities.
Access to finance remains one of the biggest challenges for SME growth. More flexible finance models such as private equity, credit lines and collateral registries, allow entrepreneurs to take risks and tap into new funding opportunities, in addition to traditional bank lending. Pairing business management capacity development interventions with designing investment plans is key to foster local enterprise growth. Investing in SMEs could lead to a giant leap for economies but it is to note that there is still lots of unclarity about where to invest and how investments in SMEs (and to those with innovative ideas and entrepreneurial spirit) could be more effective and how they could trigger increased productivity, better employment opportunities, and higher skilled work.
Addressing these issues is high on Development Connect’s agenda.
Public-Private Partnerships, as a collaborative interface, are (formalized) multi stakeholder approaches that identify stakeholders with a significant interest in value chain programming, allowing for mutual trust building and understanding to accommodate different roles, responsibilities, interests, joint design and co-delivery of research for development work. The need to have the capacity to work across sectors, to provide the leadership for sustainable development that is able to mobilize different stakeholder groups, to institutionalize consultative mechanisms are thus key areas for action.
Linked to this also is data and information management that will support decision making for value chain sustainability, accountability mechanisms that include the citizenry, and which clearly identify commitments, roles and responsibilities and are linked to the budgeting and policy making processes.
Partnerships are not ends in themselves; they are parts of a chain leading to development of sustained capacity to deliver in and across programmes. In the longer term their success builds on the engagement and (capacity) strengthening of those organizations and actors in education, training, consultancy and research who have to play a crucial role for sustainable development. This systemic, long term perspective ensures focus not only on strengthening the transformational capacity of today, but incorporates actions that seek to endow a capacity to continue to adapt, grow and innovate for tomorrows challenges.
Business viability and growth
Insufficient technical capacities to engineer growth in value chains and unreliable supply chains have been two key reasons for limited successes in SME promotion by (African) governments.
Especially in the start-up phase of SMEs, public organizations can assist, through but not necessarily, PPP arrangements, in facilitating knowledge for the design of complementary production systems, adaptation and innovation of technologies and regulation of supply chains. Incorporating SMEs into larger companies’ supply chains is another way to ensure business viability and growth; either as pure feed industries, or for example as inputs supply for urban restaurants. Incorporating SMEs into large businesses, completely or in parts of their value and supply chains, also offers opportunities for them to benefit from corporate training by the parent company.
Development Connect’s business and capacity development (advisory) services can help facilitating SME growth by:
- Pairing of financial support, advice in drafting business plans, assessing market access and business operations is crucial to ensure that business growth is not hampered by a lack of expertise or resources;
- Supporting cooperation mechanisms between the private sector, research organizations with higher educational and training institutions (and vice versa) in curriculum design and delivery, and labour market placement can counteract the current mismatch of skills demanded;
- Establishing cooperation with local institutions for technical vocational and educational training to stimulate more direct private sector engagement. Successful entrepreneurs can provide inputs to curricula, hold guest lecturer positions and offer internship opportunities to students;
- Co-designing innovative educational practices, such as automated education services via mobile technology or massive open online courses (MOOCs) can bridge the gaps in access to education and quality teaching. That said, MOOCs in particular have high entry barriers, ranging from insufficient internet access to language barriers and the lack of prior knowledge. A shift from broad-based training to targeted support for talented individuals (“champions”) with entrepreneurial spirit may be more useful (The Broker Online, 2014);
- Innovative and cost-effective alternatives for SME learning and training can be barter systems or workers’ associations that provide trainings for informal businesses. Digital business networks can provide another low-cost option for SMEs to increase their capacities and establish relations with other businesses.