PPP calls for innovation: Are we ready?

Does a public-private partnership (PPP) arrangement require innovation? What does innovation mean? Who must innovate? What will happen to a PPP arrangement if a party or stakeholder fails to innovate?

When PPP is policy-driven and undertaken as a development strategy, the government assumes a “not-business-as-usual” stance. The government breaks away from tradition and challenges the status quo. Prior to PPPs, it is the government, on its own, that designs, constructs, funds and operates projects. PPPs establish a formal relationship between the government and the private-sector proponent (PSP) and redefine their roles.

Borrowing from Moore and Hartley, PPPs transform “what gets produced, how the new products and services get distributed, how the burden of producing the services is borne and what happens to the material conditions in society.” The outcome and impact, and the manner by which the result is achieved are equally important. PPPs are reform initiatives. PPPs are innovation exemplified.

Innovation is needed. A PPP is in itself an innovation. Innovation here does not simply mean being new, radical, unique, creative or different. According to my professor on innovation, Dr. Edna Franco citing West and Farr, there must be “intentional introduction and application within a role, group or organization of ideas, processes or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, group, organization or society.”

Innovation must have a purpose and for PPPs, that purpose should be deep and real, as well as practical and tangible. The true north of PPPs is the people and their welfare. Bound by a contract, the government and the PSP become mutually responsible and accountable for delivering a service that will make the lives of Filipinos better.

Institutionally, PPPs call for innovation in four levels. When the government adopts PPP as a policy and actively pursues PPPs, it innovates. This is Level 1 innovation and is foundational. This paves the way for three other innovations. Level 2 innovation is that innovation which the PSP must undertake as agent, funder, proponent, concessionaire, service provider, manager, contractor and operator.

Level 3 innovation pertains to the reform jointly undertaken by government and the PSP. Level 4 innovation involves nonparties to the PPP contract. These are the general public, civil-society organizations and regulatory agencies. They, too, must innovate.

Meaningful change cannot be brought about by one person. Innovation is not a one-person show. All persons in the four levels of innovation must be involved and be part of the process. Per Franco, innovation is an “interindividual social process.”

The whole organization must be flexible and must engage the external stakeholders. The leaders must be strategic, encourage out-of-the-box thinking and not be risk-averse. Authorities must be decentralized. Accountabilities must be strengthened. All stakeholders must go through a cycle of learn-unlearn-relearn. Incentivizing innovation should be a norm.

PPPs and other innovative practices should be the road frequently traveled.