How governments can use the profit motive to make the world a better place

Technology Eye | Nov. 29, 2016

Identifying fake fish, cleaning up polluted canals, improving science education – these are some of the jobs that governments are getting done by mobilising the profit motive.

Over the past twenty-five years, partnerships between government and business have grown into an industry worth hundreds of billions of dollars, but as the two sectors grow ever closer together, innovative agencies are finding new ways to have private companies get things done for the common good.

Traditional public-private partnerships, where government contracted companies to provide things, began with big infrastructure projects such as roads, power stations or waste treatment plants, and were worth more than $300billion in the EU between 1990 and 2009 alone. As these become more popular around the world, emerging economies such as Brazil, India and China have recently passed laws to make them easier.

But the need for new ways of doing things is pressing. With budgets still severely constrained and innovation being churned out faster than ever in the private sector, government needs to find a means of harnessing that energy. And Apolitical’s network of the most senior public servants has identified new models for doing so as one of their most urgent requirements. Here we pick out the key breakthroughs:

1. Deploying innovators

Modelled on the song recognition app Shazam and currently being brought to market, the app FISHazam allows shoppers, restaurateurs and fishmongers to use their smartphone cameras to identify what kind of fish a fillet is from. That matters because as many as one in three fish on sale are not what they purport to be; cheap or endangered species end up on our plates in the guise of fancier varieties.

The app is being privately developed but came out of a hackathon series organised by government. Taking place in 43 cities on six continents, it was started by the US State Department in order to find ways of raising awareness about sustainability in the fish market. As Yassine Santissi, one of the app’s developers, told Apolitical, ‘It would be good to create an incentive to fish sustainably. 75% of global waters are international, not under the purview of a single country, and so regulation doesn’t really work. We’re trying to use a basic economic incentive, people’s self-interest, like, “I don’t want to be cheated.”‘

FISHazam is one of 37 finalists to present solutions to problems posed by fisheries experts, such as how to prevent invasive species spawning in the Great Lakes or stop lost nets from killing fish to no purpose (something known as ghost fishing, said to be responsible for around 30% of global catches).

James Thompson, the Director for Innovation at the Secretary’s Office of Global Partnerships, which ran the hackathons, told Apolitical, ‘FISHazam could be huge. It could be a game changer. And it came out of one weekend. When you’re able to bring the private sector, you also bring in their innovation, their creativity, which we just don’t have in government. And we can’t contract for creativity.’

2. Acting the broker

The Netherlands does things on a much larger scale, using satellites to direct farmers to good grazing land in Mali, setting up an early-warning flood system in Colombia and building solar-powered desalination plants in the Virgin Islands.

It does this by bringing together hundreds of companies and research institutes in a given field, in this case water, and connecting them to business opportunities that advance the common good.

The water sector is handled by the Netherlands Water Partnership , which co-ordinates more than 200 companies and institutes. Set up by the Dutch government in 1999, it is now a foundation funded by membership fees. The NWP directs potential clients, such as foreign governments, to the right combination of companies and research institutes to find a solution. ‘We give the Dutch water sector a head-start in the international arena,’ spokeswoman Anita de Wit told Apolitical. ‘Of course our expertise is already well known, but sometimes it needs a little nudge here and there to get through to the right people or to showcase what you can do.’

The Netherlands is also home to groundbreaking work on phosphate – the stuff in sewage that makes algae bloom across rivers and canals, killing everything in them, but that can also be turned into a fertiliser. A Dutch civil servant, Arnoud Passenier, in 2011 set up a Europe-wide marketplace to connect research institutions, companies and farmers, and so build a system where phosphate is an asset instead of a pollutant.

Passenier told Apolitical, ‘People were very surprised that someone from the Ministry of the Environment took that initiative. But I do not care if people or organisations have a sustainability goal. If they have a goal to innovate because they can reduce costs or have a commercial advantage or they want to improve their image, that’s OK for me. We’re very pragmatic with that.’

3. Leveraging socially responsible business

The UK has capitalised on companies’ growing interest in social purpose to do things like improve science education or funnel their huge purchasing power into social enterprises.

The Buy Social scheme provides private firms with a list of suppliers that have a social mission. So a company needing to buy, say, bedding or packaging could be put in touch with Bita Pathways, an NGO that helps people will mental illness get back into work. Or a company needing to buy water for its coolers could be connected with Belu Water, which invests all its profits in ending water poverty around the world and has donated more than $2million to WaterAid in the past five years.

Shevaun Haviland, Deputy Director, Business Partnerships at the Cabinet Office, told Apolitical, ‘We asked businesses to say they would use social enterprises in their supply chain up to one billion pounds ($1.3billion) and that we in government would also commit to social enterprises. The issue is actually finding enough social enterprises. And a billion pounds is nothing relative to the size of their supply chains, so there’s a very big area of opportunity. By bringing government and business together, we can fix some really wicked problems.’

Companies like Nestlé, Rio Tinto, Ford and Shell have also been mobilised to improve science education and encourage schoolchildren to study those subjects. The Your Life programme takes schoolchildren into companies to enthuse them about the jobs available with a science degree, as well as introducing them to next generation technology like drones and solar-powered cars.

Rebecca Price, Head of Finance and Professional Services at the Cabinet Office, told Apolitical, ‘Companies want really highly skilled young people to come and work in their organisations and, at the same time, government would really like to upskill young people. It’s something where there’s a really clear alignment of objectives, so we can amplify our impact through working with business.’

The impetus for this closer collaboration has come from business itself and the growing recognition that socially responsible business practices bring a financial benefit. Haviland said, ‘We’re hearing more and more that getting involved with core purpose and mission is high on their agenda. There’s evidence that, as a business, if you put purpose at your core, you’ll grow faster and be bigger. So it’s become a commercial imperative. The potential is huge. It’s a really exciting time for us.’

The Apolitical view

Ultimately, a closer relationship with business could also change government itself by disrupting that most infamous of institutional morasses: procurement. A leading investment fund has told Apolitical that it can’t back cleantech companies selling into government because the sales cycle is so slow that it becomes commercially unviable. And public servants who want to procure from the best and most innovative companies have told us horror stories about not being able to buy technology because it would be outdated by the time the procurement process was complete. But there are signs that things are changing and that procurement cycles are being reduced. We can only hope that a closer relationship with business will lead to a rosier future.

SOURCE: World Economic Forum

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