Urban Innovation in Public-Private Partnerships

The norms of public-private partnerships (PPP) are changing rapidly. PPPs no longer simply serve to privatize public services or sell public assets. Instead, they increasingly work to mobilize unconventionally paired actors to address big-picture urban governance, sustainability, and service-provision challenges. And the exponential growth of big data and advances in data analytics are closely linked to this new model of PPPs, having paved the way for new solutions. With this change, those involved must understand best practices and standards to achieve rapid scalability and to fully harness the opportunities presented by this next generation of PPPs.

To examine urban innovation in public-private partnerships, a group of leaders—including mayors, architects, scholars, urban planners, and investors—came together in a private workshop at the 2017 Chicago Forum on Global Cities. The following is the problem statement around which the workshop was framed and a summary of the highlights of their discussion, including the challenges that remain top of mind for the world’s leading experts on this issue.

Problem statement

Delivering innovative solutions—whether for physical or social infrastructure—to meet the needs of global cities requires multiparty collaboration to make the most of new technology and big data opportunities. Critically, solution codesign requires the voice of the citizen as creator, participant, and/or end user. Public-private partnership project success rests on the ability to build enduring coalitions across all stages of a project from problem identification to solution design, financing, and implementation. How do these partnerships deliver codesigned, scalable, people-centric results? Can they be replicated successfully in other global cities?

Discussion highlights

Disruptive technological change, structural shifts in how public funds are raised and distributed, and the intractability of urban challenges, including inequality and sustainability, are all coalescing to make PPPs an increasingly critical framework for how cities will meet their strategic development needs as well as their basic public-service obligations.

These shifts, along with others, create openings for new types of partnerships to take on cross-sector urban challenges. Who will need to be engaged to do the actual work of delivering those solutions? And what does the path forward look like?

Engage new partners early in the process. Adapting to an era of second-generation PPP frameworks requires that cities turn to and engage new or unconventional partners earlier in the process of analyzing the critical urban challenges they hope to address. Cross-sector partnerships have the most to offer when diverse actors can be engaged early enough to help cities think creatively about developing new solutions rather than simply implementing predefined solutions.t of residents.

Invest in public engagement efforts. Globally, PPPs have earned a reputation for delivering mixed results; variation in leadership capacity and managerial competence affect both the perception and outcomes of PPPs. In some instances, particularly with large infrastructure projects, they have proven straightforward and successful. In other instances, they have generated public ill-will toward collaboration with the private sector. To create a framework that enables and supports a successful partnership ‘ecosystem’, public trust and buy-in is critical. The public must agree to private-sector partners as legitimate actors for projects to have success.

To overcome public distrust of PPPs, cities must make substantial investments in public education, engagement, and outreach as part of the overall process of both identifying and developing cross-sector solutions. People should be thought of as a critical additional partner in the PPP framework—just as important as the other components. They provide important legitimacy to the problems defined and the approach to solving those problems.

Cultivating trust and public buy-in also requires that conversations shift away from designing partnerships that are simply legal and permissible. Instead, cities must work toward arrangements that embody higher standards and encourage trust. These arrangements should be obviously legitimate and sustainable because of the public benefit and transformative outcomes they have the potential to deliver. 

Ensure broader impact for specific projects. To conceptualize more legitimate and sustainable PPP arrangements, cities and their partners should seek a broad-based solution or community outcome. This is in contrast to a starting point that emphasizes the implementation of a discrete and isolated project. Such opportunities include deploying renewable-energy solutions as the cost of those technologies fall, harnessing new transportation and mobility dynamics as vehicle fleets are increasingly electric and automated, and better use of resources to fundamentally alter the nature of urban consumption and waste. Reorienting PPPs to consider broader goals and transformative outcomes opens the door to unleashing greater transformative action.

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Changes to the PPP model present new hurdles but also new opportunities for growth and development. While it can be difficult to keep up, bringing together unconventional actors, with diverse and distinct ideas, can help cities deliver innovative solutions—both for physical and social infrastructure.

What is your city doing to build meaningful partnerships that can solve pressing challenges and spur growth? Join the conversation @ChicagoForum.