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Working with Private Industry

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In a global economy, the private sector plays a pivotal role in both security and economic development. In particular, legitimate commercial firms engaged in international trade and production networks are uniquely positioned to help prevent the security and economic damage wrought by various types of illicit trafficking, and by other vulnerabilities in the global supply chain. The Managing Across Boundaries Initiatve (MAB) works with these private sector stakeholders, as well as government agencies, to identify market-based solutions that advance public policy objectives and industry profit goals. In so doing, MAB seeks to help build a 21st-century governance framework that is genuinely sustainable.

Stimson has recently launched a new project, “Nuclear Energy: Securing the Future.”

The Public-Private Sector Accelerator

The Next Generation Partnerships at the Intersection of Policy and Profit

One defining aspect of globalization is the diversion of power away from the nation-state and into the hands of a wider range of actors. The private sector is one of these players wielding greater influence in an increasingly interconnected world. Indeed, today, we depend more on the private sector for global security and development than in any other time in history.

Public-Private Accelerator

Flows: At the end of the Cold War, official development assistance (ODA) was twice the size of private sector foreign direct investments (FDI). Now, the flows of investment to developing countries alone are over five times higher than aid.

Trade: Trade has tripled worldwide in recent decades and the biggest benefactor is emerging and developing economies, whose share of world trade rose from around 10 percent to greater than 40 percent. The private shipping industry has been instrumental in facilitating this growth.

Employment: Over 90 percent of jobs in the world are now in the private sector, a significant change in the last several decades when public sector employment constituted almost half of all employment in certain regions.

Investments: Globally, foreign direct investments have grown from 14 billion dollars in 1970 to an anticipated $1.8 trillion in 2015. According to the UN, developing economies today absorb more FDI than developed countries.

Capacity: Global infrastructure investment needs, most of which are in developing countries, will be upwards of $57 trillion in the coming decades. The global market in securing these investments is expected to grow to over $105 billion only in the next few years. As such, the infrastructure and high technology sectors will be critical partners in building resilient societies that can withstand the pressures from a wide range of security and development challenges – climate change, transnational crime, disease, terrorism and the proliferation of dangerous technologies.

Public-private sector partnerships then and now

While the power of the private sector has increased, and the need for industry to play a key role in meeting global challenges has swelled, the relationship between the private and public sectors have become more distant and contentious.

This is a very different narrative from when, following World War II, the aerospace, defense and security sector, as well as other private industry sectors, intensified their relationships with government clients to jointly identify national security needs and design profitable operational plans to address them. These innovative partnerships did not only build up the U.S. military to global supremacy, they also helped to put a man on the moon, and generated game-changing technological spin-offs to the civilian sector by connecting the world through the Internet, the development of semiconductors, and the introduction of GPS technologies.

Public sector charm offensive, but with few sustainable results

Today, the world faces a new set of momentous global challenges that threaten geostrategic stability, people and socio-economic development worldwide – inadequate public health systems, transnational crime, environmental pressures, terrorism and the proliferation of dangerous technologies. Nowhere are these threats more acute than in emerging and developing economies, where potentially destructive forces threaten to suborn government authority and radiate insecurity around the planet.

In this light, global leaders across the security and development continuum are reaching out to the private sector, incorporating public private partnerships in national security strategies and the global development agenda.

Yet despite the charm offensive from the public sector and the undeniable influential role for industry in everything from national security to poverty reduction, governments and multilateral organizations have largely failed to systematically leverage the innovation, resources and reach of businesses in overcoming global challenges.

Generating novel partnerships in an era of globalization

The Managing Across Boundaries Initiative has spent the better part of the last decade building partnerships and analyzing national, regional and global security and development challenges that are currently plaguing countries worldwide. We have simultaneously identified needs that the private sector can fill through innovative partnerships with governments.

The Managing Across Boundaries Initiative is in an ideal position to take a holistic approach and identify the underlying needs and clients, and to act as a two-way gatekeeper between these stakeholders and private industry in order to dramatically improve the innovation adoption cycle, build long term private industry support and address transnational issues that plague both security and development goals.

To that end, we have identified pilot projects that strike the right balance between long-term policy and public sector capacity building, with the need for private sector profit. We believe that there is a need for an honest broker in generating the next generation of public-private partnerships.

A public-private partnership accelerator

Over the course of the next two years, the Managing Across Boundaries Initiative will seek to advance the nature of public-private sector partnerships in key national security and development areas.

Our objective is to identify the most acute challenges, determine the most effective strategies to address those challenges, and help to better harness the innovative spirit within industry.

We will do this through developing new, authentic public-private partnerships that involve voluntary interactions between governments and non-government entities where one or both parties draw upon the expertise of the other. We will also continue to develop innovative pilot efforts that go far beyond Corporate Social Responsibility and instead appeal to the vested self-interest of both public and private sector stakeholders.

These instructive pilots will overcome traditional siloes and bring together actors across a continuum of sectors, moving beyond 20th century solutions to confront 21st century problems and preserve the fruits of globalization while combating the undercurrents of the same phenomenon.

Currently identified public-private partnership accelerator projects include:

· Addressing food insecurity by improving supply chain management

· Building a model for infrastructure and high technology companies in developing markets that responds to emerging global security and development challenges

· Advancing global nonproliferation efforts by reshaping the relationship and information gathering efforts with corporations producing dual-use technologies

· Working with the cleantech sector to build sustainable societies as the Global South continues to rise

 

For more information on this project or to join our efforts please contact Brian Finlay, Stimson Managing Director, or Johan Bergenas, Deputy Director of the Managing Across Boundaries Initiative.

 

Some highlights of this work:

Making Public-Private Security Cooperation More Efficient, Effective and Sustainable
The companion staff report to the May 2014 Partners in Prevention Task Force recommendations (see below). Covering a much wider substantive range and elaborating key background issues, this document lays bare the urgent need to modernize public-private partnerships for a 21st-century economic and security environment. 

Final Recommendations of Stimson’s Partners in Prevention Task Force
In this May 2014 report, the Task Force endorses seven targeted proposals to close security gaps in global trade by better leveraging market incentives. 

Killing Animals, Buying Arms
A January 2014 report on the serious threat posed by poaching and wildlife crime to international security and economic development. The report includes analysis on how the private sector can play a role in combatting transnational crime, while breaking into new critical infrastructure markets in East Africa.

Market Power: Adapting Public and Private Roles for Transnational Commerce and Transnational Threats
A September 2013 report outlining the “big picture” of public-private security cooperation: why it’s important, why it’s hard to get right, and how government and industry can start building more mutually beneficial security relationships.

A Win-Win for Government and Insurers: Partnering for Security
An October 2013 essay on the untapped potential of insurance providers to support national security in the terrorism and cybersecurity domains.

Partners in Prevention: Public/Private Partnerships for Global Supply Chain Security 
From the April 2013 edition of the NMIO Bulletin (see pp. 14-15), published by the National Maritime Intelligence-Integration Office.

Higher Purpose Focus: Expanding the Role of the High Technology Industry
A downloadable, two-page overview of MAB’s model for engaging governments, private industry, and civil society in a fundamentally different conversation on facilitating sustainable development.   

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