As companies globalise, they face a growing body of diverse and complex regulations. The global regulatory environment is changing faster than companies can absorb. This is why CEOs consistently report overregulation as a threat to business growth. And it’s not getting any easier; according to the CEO Survey, only 31% of CEOs believe that regulations will be harmonised among governments. However, the successes of the private and public sectors are increasingly intertwined. Effective partnership models are emerging around the world, ranging from improved communication and better coordination to true collaboration, depending on the market.
71% of CEOs plan to increase investment in an area they also believe is one of the government’s top-three priorities: developing a skilled workforce. And increasingly, governments are making this a top priority. Countries as well as companies are competing for talent, and some governments are investing a lot to make their workforces more competitive. For example, the Singapore government partnered with a local university to launch a talent development programme, bringing together professional services firms, universities and business schools.
Workforce skilling is just one area of focus. Intellectual property, health care, energy, infrastructure, immigration, tax, financial sector convergence… these are major areas in which leaders from both public and private sector organisations say they can work together more effectively to achieve common goals.
Government leadership in building infrastructure is critical for competitiveness. A majority of CEOs identified the priority for the governments of all countries outside of Western Europe and Japan, where infrastructure is well developed, and of China – where the government allocated almost US$600 billion of stimulus spending for infrastructure projects over the past two years, according to PwC’s 14 Annual CEO Survey.
The role of private capital in financing infrastructure is unavoidable: an estimated US$3 trillion per year needs to be spent on infrastructure across the globe in the coming decades, according to a recent report from the World Economic Forum.
However, businesses can provide more than cash: they have expertise, and the abilities to execute and manage risks. This is part of what makes PPPs attractive. As Berthold Leetfink, Deputy Secretary General of the Ministry of Economics, Agriculture and Innovation in the Netherlands told PwC, “At least for the Netherlands, and I think for many other countries, planning and building infrastructure is very much in the hands of government. But it’s obvious that the private sector has a lot of knowledge in terms of building cheaply, efficiently or in a more environmentally friendly way.” As an example, a PPP project in 2009 to connect a 12-mile regional rapid transit line in Vancouver (Canada Line) was completed several months ahead of schedule.
Needless to say, businesses also have a key expectation for their governments: to tackle fiscal deficits to restore stability to the markets in a way that is mindful of the fragile environment for global growth. Public revenues are of course expected to be part of the equation: a majority of CEOs expect taxes will rise, led by 65% of CEOs in Asia and 70% in Latin America.
C.H. Beck Publishing has the pleasure to invite you on November 11, 2009 to the launching event of the book “Lobby regulation. Inside the antechambre of influence” written by Liviu Mihaileanu and Aurelian Horja. The event will take place at the Law Faculty of Bucharest University (36-46 Kogalniceanu Blvd., Bucharest).
Besides defining the lobby activities and presenting lobbying tactics and tools, the book clarifies aspects such as the difference between lobby and trafic of influence and makes a comparative analysis of lobby regulation in USA, the European Union and EU member states.
PwC Public Sector Research Centre published these days a study on “Social Private Partnerships”. Using profit to deliver social benefits is a concept that the private sector has already embraced through its considerable investment in corporate social responsibility programmes. Maximising profit should enable social enterprise to deliver a higher level of ‘mission benefits’. Therefore, PwC considers that the time is ripe to recognise the coming together of the two related sectors, and to adopt a more assertive approach to partnerships between social enterprises and private firms in the provision of public services.
Working together, and sharing experience and resources, may indeed become a necessary means of achieving the traditional aims of both sectors whilst better harnessing public spending for the wider public good. However, it is important not to exaggerate or confuse the role of the third sector and social enterprise. Much of the third sector will remain dependant on giving. Only 2% of total public spending is on third sector delivery and a high proportion of social enterprises are micro-businesses. Even so, the sector receives widespread support and is popular with Government and service users. Moreover, if the goal is to create a mixed economy of providers then there will need to be more social enterprise involvement, especially in areas where private providers or public providers are dominant.
The economic downturn will act as a brake on the rate of growth and constrict access to conventional funding, but may also open up new opportunities as the government seeks to fast-track spending in key areas like health, education, housing and transport while also delivering on social outcomes, such as limiting inequality.
Advancement in outcome-based commissioning (whereby social or local added-value, like volunteering or mentoring are factored into the procurement process) and the introduction of full cost recovery should be real plusses.