How Public-Private Partnerships Can Help Build Nations’ Brands by Knowledge@Wharton
Gilbert Probst on how public-private partnerships affect nations’ brands
Public-private partnerships (PPPs) have gained popularity in recent years as a way to address social and economic problems that are difficult or impossible for a single entity to tackle — such as alleviating poverty, increasing access to education or building resilience to floods. Often aided by multilateral organizations like the World Bank or the World Economic Forum, PPPs bring together national governments, private businesses, civic organizations and donors. As the participants pool resources and expertise to address the problems, they also help create and strengthen their own brands — be it companies or nations.
Those benefits sustain the attractiveness of PPPs with multiple stakeholders, according to Gilbert Probst, managing director, Leadership Office and Academic Affairs and dean of the Global Leadership Fellows Program at the World Economic Forum in Geneva. He works in the area of managing growth, learning organizations and knowledge management, and consults with major companies worldwide. In this podcast, Wharton marketing professor David Reibstein, who has done extensive research on the growth of nation-brands, interviews Probst on key PPP issues. The discussion comes ahead of the Wharton Nation Brand Conference that Reibstein will host on October 28 in Philadelphia.
An edited transcript of the conversation appears below.
David Reibstein: I want to talk to you about public-private partnerships because you’ve done a lot of work in that area. How do you go about defining a public-private partnership?
Gilbert Probst: I don’t want to make it too academic. In general, there is a new collaboration paradigm. I truly believe that collaboration is the paradigm of the 21st century. [The origin of] public-private partnership goes back to the early 1990s. All over the world, both at strategic and operational levels, key players from the public sector, business and civil society are working out how to [collaborate] as partners to find long-term solutions to the most intractable problems facing us environmentally and socially, but also economically.
Reibstein: Could you give us a couple of examples?
Probst: Sure…. Public-private partnerships were commonly associated with tender-based infrastructure projects and contracting out. But in the last [few] decades, we have seen a trend towards public and private actors more collaboratively addressing societal challenges that one of them alone cannot solve. The areas are health, education, water [and] poverty — where we need all the different stakeholders to collaborate.
At the World Economic Forum, we have one [initiative] called “New Vision for Agriculture,” where you have 33 global companies, 19 governments, international and donor organizations, civil society organizations and farmer associations, and the idea is to build a leadership commitment to action, where you try to improve productivity, sustainability and economic benefits in agriculture. [It also aims to] improve whole value chains, and that’s typically where you have to include all the stakeholders. Most of the projects are in Asia and in Africa. It is a committed, multi-stakeholder network that tries to solve the problem of food security, and this includes the need for a new vision for agriculture.
The Tropical Forest Alliance (hosted by the World Economic Forum) is a new one that goes in that direction [of public-private partnerships], where again, one country alone, but also, business alone cannot solve such problems.
“I truly believe that collaboration is the paradigm of the 21st century.”
Other [public-private partnerships] are in water distribution and water use. That is a worldwide problem and probably one of the top problems. Much more important than oil and gas in the future will be water — where, again, a country alone or business alone cannot solve the problem.
Reibstein: Often, what I see is some coalition of countries working on a particular problem … like agreements about the environment. I’m trying to think about the role of companies in that, as well. In the New Vision for Agriculture, are there specific companies that are involved?
Probst: Oh, yes, there are. [It includes] BASF, Bayer, Cargill, banks like Rabobank and others. You [also] have Monsanto, Nestle, Unilever and Wal-Mart. They all are corporate champions that invest a lot of time, their experience and their knowledge. Then you have the countries like Vietnam, Indonesia, Myanmar, Philippines and India. You also have Africa, Tanzania, Ethiopia, Kenya, Rwanda and others. You have global platforms and funding that come from countries like the U.S., Switzerland and the Netherlands. Then you have international organizations like the FAO (U.N. Food and Agriculture Organization), the High Level Task Force and the WFP (World Food Program). You have civil society organizations like the WWF (Worldwide Fund for Nature), Oxfam and GAIN (Global Alliance for Improved Nutrition). They all agree that one alone cannot really solve a problem. That’s where public-private partnerships became so important.
Reibstein: We’re addressing big, public issues [with such partnerships]. I’m curious — are your companies participating in this out of philanthropic interests, PR interest or is there some economic aspect for those firms that is behind their motivation?
Probst: Well, there is an economic interest. There are a lot of different interests, actually, that come together. It can be because you have the experience and you see that you can contribute. Or you see the necessity. Necessity can be responding to investor or shareholder demands, and that’s something that is growing. It can be because you want to meet host government requirements. It can be because you can only fund or finance projects in collaboration with a nation. But it’s also creating legitimacy, in a sense — protecting or creating corporate brand and reputation.
I could say the same, by the way, for nations. It can be because you want to commit to values and principles and you want to show that you live up to them. One that comes more into play is attracting and motivating talented employees. There are several cases where we could see that — where at the beginning the company or the employees were reluctant to work for because they felt this is maybe not the core business or these are not the projects that have most visibility. And then, they got a lot of motivation and positive feelings out of it — also, a feeling that companies are contributing.
Another one is LET, or the Logistics Emergency Teams, where logistics companies got together to help in flooding or any catastrophic situation. (LET is an alliance formed by logistics and transportation companies Agility, UPS and Maersk and facilitated by the World Economic Forum to support the U.N. World Food Programme.) They invest in it because they get access to governments. Also, it is motivating for their employees. They can develop new services or new procedures.
Reibstein: I am hearing a multiplicity of motivations, one of which is that it’s good image-building for the company – within, for employees, to make them feel better about the company they work for, but also externally. Do some nations participate in these alliances because it’s good for their nation’s brand to be associated with these endeavors?
Probst: Absolutely. Nations participate, of course, when there is a need — when there are real problems. That’s one…. If you have a catastrophe, if you have a shortage of water and you can solve the problem, you go into public-private partnerships.
Reibstein: So that’s clear when we think about some of the African nations and some of the water shortages that might be there, as well as in electricity, et cetera.
Probst: Exactly. There should always be a problem that you want to solve. But it can also be that you realize that it is good for your brand, for nation branding…. If we think of the EU Commission [for example], you could see that [its president Jean-Claude Juncker in his State of the Union 2016 address] showed the investment plan for 315 billion euros through co-financing by the private sector in the European Investment Plan. And the plan [is part of] of a brand building approach for Europe.
The same is [the case with] sustainability. CSR (corporate social responsibility) contributes to the branding of a company, but it also does that for nations. An example that comes to my mind is Grow Africa, a platform created in 2012 to promote African agriculture through development partnerships. The acceleration of investments through public-private partnerships helps, of course, a nation also to look good, to [answer the question], “What is it that we really do, that we contribute?” And they need the multi-stakeholder platform [for those efforts].
“[In] the last [few] decades, we have seen … public and private actors more collaboratively addressing societal challenges that one of them alone cannot solve.”
If I take the Grow Africa platform — there is Unilever and Heineken and Cargill, but the interesting thing is that these are initiatives that help nations get a better image or get another brand. I remember there was an initiative within Grow Africa called The Growth Enhancement Support Scheme that was applied in Nigeria. [Akinwumi] Adesina, who was [Nigeria’s] minister of agriculture and rural development, invested a lot in that … to overcome corruption in the fertilizer and seed distribution channels. It aimed at connecting farmers directly to private suppliers by means of mobile phone technologies, and by doing that, bypassing the middlemen. This innovative initiative is a success thanks to the speed of the leadership of the [former] minister of agriculture. (Adesina has been president of the African Development Bank since September 2015).
It showed, of course, that they live up to what they promised. But at the same time, they created a trusted platform that not only spurred collaboration and development, but also created much more transparency. That is, of course, the impact of a national brand – [it] is there as a result, but has, also, an impact.
Reibstein: It’s a wonderful example. I’m assuming that what happened was that — first of all — food became more available and at a cheaper price within Nigeria.
Reibstein: So, it made [Nigeria] a better nation because of more abundance, healthier citizens and a little bit more affordable [food]. In that way, it helps Brand Nigeria — not just helping the brand, but it also helping the people of Nigeria. Were there other countries that were involved in that?
Probst: Yes; I think 16 countries were involved. This is a collaboration between, also, countries where they have to exchange. I just gave you an example [of Nigeria] because it was one country that also worked directly on its own brand in that sense, or created a much stronger brand.
Reibstein: In many of these partnerships, who’s really in charge? I am trying to think about the brand and the image that results from any of this. Everybody’s got their own particular interests, be it BASF, [which] is interested in trying to do something good and positive, but also, concerned about its brand, or Monsanto or any of the others. Then, [you have] the multitude of countries. So who’s really in charge of the project? And then, does everybody independently work on their nation’s brands and corporate brands — how does that work?
Probst: If it is one nation, an industry or if companies are involved — you create a contract or a partnership in an easy way. What you often have there is a broker, and this could be the World Bank or the World Economic Forum. Typically, that means the World Economic Forum plays the role of a broker bringing [stakeholders] together, creating structures and helping them to build a governance system. Then, it flies on its own.
GAIN, by the way, a typical one that came out of it, has become a big organization nowadays. Grow Africa is one that is still halfway now with the World Economic Forum, but on its way to being run afterwards as an independent alliance. But you’re right, the risk is that someone – say, countries, want to take over or want to take all the credit, or companies want to get more credit out of it. We have to [ask], “How can you create this?” And, “How can you make sure that it remains a partnership, and [each partner] stays as a partner and contributes?”
“We have to [ask], ‘How can you create this?’ And, ‘How can you make sure that it remains a partnership, and [each partner] stays as a partner and contributes?’”
Reibstein: Are these public-private partnerships addressing major societal issues on the rise? Or do these just episodically occur?
Probst: They’re on the rise. [From] the 1990s when it started, it doubled every three to four years, and there’s a huge [number] now of public-private partnerships. I think because people see the reason, they see there is much more experience, and of course, there is much more support. There’s huge support. If you take the World Bank, they are the largest broker, and there are hundreds of public-private partnerships — if you go on the website of the U.N., you can look them up. The same is true for the World Economic Forum as another typical broker.
But there are also much more in smaller cases. I have one that we just did research on — the Zurich flood resilience program — where a Zurich company goes with regions or nations like Nepal who have these problems. By the way, that includes the Wharton School. (The Zurich Flood Resilience Program is an initiative that includes Zurich Insurance, the Wharton School, the International Institute of Applied System Analysis, the International Federation of Red Cross and Red Crescent Societies and Practical Action.) The Wharton School was brought in because they carry a strong emphasis on the behavioral aspects of risk management. Zurich Insurance had this vision, and [realized] we can do much better by building public-private partnerships. They [want to] expand it now. The Nepal example is very successful and they want to roll it out now [in other communities].
Reibstein: It’s interesting because you can identify a number of issues that call for these partnerships to exist. The latest one that just came to my mind is about different diseases that might be going around the world currently. There is some fear about the Zika virus, and you can imagine the World Health Organization working with various companies to try and address this issue. It affects the brand of certain nations, where Zika might be more prevalent and people worry about the risk of being in those particular countries. Gilbert, I find this to be a very, very interesting area. You’ve been doing a lot of work in this area, and as you say, it’s an absolutely growing domain. You have been contributing a lot – and through the work that you have been doing with the World Economic Forum that has been addressing some of the issues you note. Thank you very much for joining us today. And good luck with your work.
Probst: Thank you. There is a lot that we probably could continue to discuss. Nation branding is not something that most people are aware of…. But I think governance can do a lot there. It helps them to engage business in the policy dialogue. It provides all the stakeholders with better information and coordination.