Business Collaboration with Government: Does Reward Outweigh Risk?

Government. These days, people generally pronounce the word in one of two ways: either with genuine distaste and derision, or in a disappointed tone, preceded and followed by an audible sigh. Given this year’s US election cycle, neither attitude is difficult to understand. As all eyes look to how the new administration will lead America through the next four years, what is the role of government in creating a more united country and a better world?

Several weeks ago, Ian Bremmer, a noted political risk expert, addressed the IMPACT 2030 Global Summit, a network of corporate leaders focused on how their businesses can drive progress toward the Sustainable Development Goals (SDGs). Bremmer shared his observations on the erosion of government legitimacy, easily illustrated in recent events—failed states in the Middle East, the popularity of French far-right leader Marine Le Pen, Brexit, the US presidential campaign.

He posited that the rise of populism is due to the dissolution of the social contract between governments and citizens. I agree. However, Bremmer went on to say—to a room full of business leaders—that corporations “need to move forward without government, because government is changing.” In responding to a question on the need for cross-sector partnerships to make game-changing progress on the world’s biggest social, economic, and environmental challenges by 2030, he stated unequivocally “only the private sector can do it” and that businesses should “go it alone,” rather than be seen as aligned with governments that no longer enjoy the trust of the people.

Admittedly, partnerships between companies and government are difficult. However, if we are to address the tremendous challenges facing voters at the scale and speed these issues demand, companies must work in partnership with government to deliver sustainable results.

There is a benefit in doing so. Companies can become a positive architect in the socio-economic ecosystem of forces that surround customers, potential employees, and suppliers. This can increase their social license to operate, mitigate risk, and surface new, unexpected, and unforeseen business opportunities. Businesses that adopt a shared value mindset—generating economic value in a way that also produces value for society by addressing its challenges—will be positioned to sustain, compete, and thrive in global and domestic markets. Conversely, to meet the remits of their constituents, public sector bodies will need to adjust and recognize the value that one of the world’s biggest actors—the private sector—brings.

Does reward outweigh risk?

Working collaboratively with another sector comes with inherent risks, including to reputations. That risk is real not just for corporations, but for governments too. It is important to note that the real or perceived influence of private sector on government has contributed significantly to the broken relationship between governments and citizens in many countries, including the United States. The IMPACT 2030 audience is one that understands that distinction, and many of the member businesses count among their greatest successes those that include solid partnerships with the public sector.

Take the companies on the Change the World list published by Fortune earlier this year, for instance. Many of the examples cited as evidence of driving social and business benefit in tandem include a significant government partnership. Coca Cola’s 50by20 Initiative works closely with local governments around the world and with the UK Department for International Development. Heineken partners with the Dutch and Ethiopian governments to source barley locally. The Indian government, together with Johnson & Johnson, has launched a new tuberculosis drug, and the World Health Organization has issued interim guidelines for administering it. GSK is collaborating with multiple governments in Sub-Saharan Africa to combat HIV and to address a host of other healthcare challenges.

According to Dr. Ahsiya Mencin, director of the PULSE Volunteer Partnership at GSK, a company with a long track record in collaboration in areas such as training frontline health workers and widening access to vaccines: 

Global health challenges cannot be tackled by one organization or sector alone—it takes partnership between governments, business, and civil society with complementary resources and knowledge. In GSK’s pro bono work in Kigali, Rwanda, for example, employees share their expertise in healthcare and change management with the Rwandan Ministry of Health, Partners in Health (an international NGO), and SAP (a technology company) to improve healthcare access and infrastructure for the people of Rwanda.

Many in the public sector agree that cross-sector partnerships are critical to progress. Patrick van Weerelt heads up the United Nations Staff Systems College’s Knowledge Centre for Sustainable Development, an arm of the UN tasked with educating staff on how to further collaboration with the private sector. According to van Weerelt:

The discussion should no longer be about whether private and public sector should work together—rather it should be about how can we make sure we build on the strongest elements of both. It is without a doubt more challenging to work in an elaborate partnership setting of public and private sector, but these challenges shouldn’t deter from the fact that it will be the only route to sustainability.

Restoring the trust

Private-public collaborations that show clear benefit for business and society are an important ingredient to restored trust in government. Corporations large and small, multinational and local, are increasingly embracing collaboration with government as critical to their business success. They see government institutions as necessary to creating and maintaining a viable operating environment, as well as instrumental in scaling up solutions. Government agencies are prioritizing public-private partnerships, acknowledging that the public sector alone has neither the know-how nor the resources to solve social challenges and deliver services on their own.

There are, of course, instances when it makes no sense to partner. If the private sector were to embrace Bremmer’s go-it-alone philosophy unilaterally, however, this would bring us back to the era between the 1960s and 1980s—a period in corporate America dominated by the profit motive, frequently at the expense of the environment and in many instances the consumers, suppliers, and prospective employees a company sought to engage. Today, we can no longer afford this mentality. The challenges facing the world—the issues that affect businesses, government, and civil society in equal part—are real, and they are urgent: too much so for any sector to go it alone.
 

Read more stories by Deirdre White.