I was recently interviewed by Elle Hempen, co-founder and CEO of The Atlas. We chatted about successful public private partnerships: how cities, small businesses and startups can work together better — not only to improve services, but also to ensure long term economic vitality by creating jobs and supporting broader community investment. It’s an important discussion to have, especially now that cities are taking the lead on everything from climate change to criminal justice reform.
Below are some thoughts & ideas that I shared with her:
This is the decade, if not the century of cities. Cities are where people are moving, they’re where economies are growing, they’re where innovation is happening. When people talk about improving infrastructure in the US, they’re talking about cities. When they’re talking about the economy, they’re talking about cities. Climate change, waste reduction, education, immigration…those are all city issues. That is why it is so important, and exciting, to see mayors from across US and around the world rising up and speaking out on issues where state and federal governments are stalled. In my view, cities are the only level of government that works every day on behalf of citizens in tangible ways you can measure. For city government, either a pothole was fixed or it wasn’t. Trash was picked up or it wasn’t. It’s not about giving a speech it’s about providing service. Regardless of the topic, city governments have to deliver services to citizens each and every day. And often those services are ones that people take for granted. Nobody wonders whether a traffic signal is going to work, that when they turn on a faucet in the morning they’ll have clean water, that there will be water in the swimming pools for kids in the summertime and art supplies at the community center. Every day, city governments manage those activities, in measurable ways, and truly affect the everyday life of everyday citizens.
Cities small, medium and large, regardless of financial circumstances, are focused on everything — from public safety, citizen engagement, poverty, reentry, to infrastructure integrity and investment. And they’re doing so with very little expectation that there will be new, big, or additional money coming out of Washington, DC. While very important, states and the federal government are generally funders of services, not service providers. When states and the federal government make promises, it’s the cities that have to deliver. So, increasingly we’ll see cities collaborating and creating successful public private partnerships to get things done. Public-private-partnerships are not a fad, they’re a necessity. P3s have been used for decades outside of the US, but we’ve been slow to adopt them for a variety of reasons. I believe that is going to change and you will see more successful public private partnerships in the US. But to do them right, there is a big need for education.
It’s because of their close relationships with residents that city governments tend to be risk averse when it comes to working with the private sector in new ways. Government knows what services it needs to deliver and companies know how they want to help. But often connecting the two can be difficult. Rules and regulations may not be fully developed, evaluating products and services is hard, the deal may be difficult to structure. All of that uncertainty creates fear factors. When a company puts out a product, they know they have the chance of that product or service crashing and burning. It’s a sad moment, but it’s a part of the process for entrepreneurs. On the government side, if you have something that crashes and burns, you have to explain that on the front of your local newspaper. You’ve got citizens asking why are you wasting their money.
From my experience, here are two things that city governments can do to reduce that risk and pursue successful public private partnerships:
When I was Mayor of Philadelphia, we started doing open data releases. Building on that process that we worked within our procurement office to partner with a company and collaboratively built Philly311 — an app that immediately heightened the level of service we provided to residents. At times, we underutilize the creativity of private sector, especially startups. Putting out open RFIs or RFQs often gets the best ideas into the government procurement system for free.
That means setting and managing expectations. It means laying out a vision about what is being tried, explaining why you’re doing it, and being clear that there is a possibility that some part of it might not work. We know from experience that every seemingly great idea is not always successful, or may not be successful in the way it was originally envisioned. Cities can be progressive and innovative, as long as they are always mindful that their public responsibility comes first. You can only get progress through reasonable risk taking and a spirit of innovation. We’re increasingly seeing that mindset in the public sector and especially at the city level.
Edison didn’t get it right the first time, but today I am sitting in a room full of energy efficient lights.
Cities need established businesses, small businesses, and startup businesses to create economic vitality. For any Mayor, that is always a top priority. When local businesses are successful, they create jobs. When local businesses are successful they pay taxes, which helps support city projects. Cities clearly need businesses and businesses clearly need cities, and it’s that recognition of mutual need that is so important to successful public private partnerships.
From my experience, here are three things that companies can do to make it easier for cities to work with them:
Especially if you can point to direct household savings or job creation. City government is responsible first and foremost to their residents, and for any investment it will have to persuade residents that it’s worth it. If a company can define its benefits for citizens first, it’s easier to move forward from there. Whether the city works with the company or not, the city must keep running and provide services.
A lot of people think they have to get the Mayor on board first to move quickly, but sometimes it’s the Director of Economic Development or Public Works. Find the person who sees immediate benefit, help them think through barriers, and let them get the Mayor excited. If you focus on how your company, product or service fits in with the city’s goals, and not vice versa, then there’s a foundation for a successful public private partnership.
The best way to communicate is from a base built on common understanding. Jargon on both sides can lead to miscommunication and a lack of trust. The best way to solve this is with honesty about priorities, about goals, about challenges. The best way to communicate is based on common understanding — so pointing to real world examples of how your company has worked with other cities and how the project is going goes a long way in translating big ideas into action.
I’d rather have 10 fully committed people than 100 folks who just want to talk about something.
Michael A. Nutter is the former Mayor of Philadelphia, and is the David N. Dinkins Professor of Professional Practice in Urban and Public Policy at Columbia University/SIPA. Contact him at mikenutterllc.com.