The Innovation Fulcrum:

Information Technology and Public-Private Sector Partnerships

 

Remarks presented at the regulatory side-panel of the

UN World Summit on the Information Society

12 December 2003, in Geneva

 

By Kenneth Neil Cukier

Research Fellow, National Center for Digital Government

John F. Kennedy School of Government, Harvard University

 

 

Good morning. I would like to thank the French prime minister’s office for organizing today’s panel and for the invitation to participate alongside so many distinguished speakers. My particular thanks go to our moderator, Dr. Bernard Benhamou, from whom I have learned a great deal about technology and public policy. Our conversations over the years have been spirited, and though we do not always agree, we always leave enriched. 

 

Today, I’d like to speak on three fundamental issues:

- First, a description of the concept of public-private sector partnerships.

- Second, an explanation of why such partnerships are important.

- Third, an identification of potential problems with this form of industrial, and occasionally regulatory, approach.

 

My experience, as Bernard pointed out in his introduction, is specialized on ICANN, a hybrid private-sector and intergovernmental organization that manages the Internet’s domain name system. However, I will try to speak more broadly on the themes we are discussing today.

 

I. Public-Private Sector Partnerships in Information Technology.

 

Let me state at the outset that I do not believe there is such a thing as public-private sector partnerships. I agree with the concept, but not the name. The term is either ambiguous or inaccurate, and that confuses its meaning.

 

I would recommend that instead of “public-private sector partnerships,” we use the term “multi-stakeholder partnerships.” This isn’t simply a matter of semantics. The problem that many of these partnerships face is a lack of legitimacy, and one reason is that it is unclear what is meant by the “private sector.” Is it industry? Is it technologists? Is it academia? Is it civil society groups? If it’s all of them and more, then in what order?

 

In many countries, universities are funded and managed by the state – are they government? Many companies such as telecom operators and utilities are also state-backed – are they private? Take an example from my own country, the United States. The Department of Defense has a division called the Advanced Research Projects Agency, or DARPA, which is famous for, among other things, funding the creation of the Internet. It is military, and therefore governmental, of course. But it funds university researchers, and its grantees work closely with industrial R&D labs. So is DARPA also academic? Corporate? And what happens when NGOs like civil liberties groups want a say in DARPA’s activities, as has happened recently with an initiative on aggregating databases of personal information to combat terrorism?

 

It is confusing. But what’s clear is that the neat duality, the division between public and private is not only artificial, it is also the cause of a lot of disputes among parties, particularly when they strive to prioritize interests and identify whom they represent. As a result, it makes more sense to talk about these forms of partnerships as “multi-stakeholder processes.”

 

II. Why Multi-Stakeholder Partnerships Are Important.

 

If “public-private sector partnerships” – a mouthful! – is better expressed as “multi-stakeholder partnerships” – also clumsy to say! – what are their purpose? Why their appeal? The answer, in short, is economic efficiency.

 

The evolution of these sorts of structures is due to a recognition that there are things that cannot be done optimally by any one party acting alone. The reasons for this may be varied:

- Perhaps the matter is cross-sectional, that requires the input of different groups (for instance, protecting the power grid in an environment of commercial competition).

- Or, it is highly complex and relies on specialized knowledge available only to specific actors (such as developing technology for space exploration).

- In other cases, the issues may cross jurisdictional boundaries (such as technology solutions applied to the environment, or my own specialty, Internet governance).

- Finally, there is what has traditionally been called “industrial policy” – sponsoring the activities for “pre-commercial” research and development in an emergent industry.

 

What is important is that certain matters related to a public good – usually the responsibility of government – require the cooperation and expertise of multiple parties to best be  addressed. These forms of partnerships have been with us for a long time in different forms, but they have become increasingly popular today for two main reasons:

- As already mentioned, the complexity of issues have required the participation of new actors that bring specialized competence.

- Also, the rate of change is advancing so quickly, that it is important for governmental institution, which act at a slower pace, to cooperate with other stakeholders that are closer to the field of action.

 

III. Potential Problems with Multi-Stakeholder Partnerships.

 

This is not to say that these approaches are the best remedy to all situations, or that they always work. On the contrary, they raise a number of serious challenges.

 

- Organizational. The soft issues are the hard issues. Managing teams of people on an IT project within a government administration is extremely difficult, a theme that has been richly highlighted in the research of Dr. Jane Fountain, the director of Harvard’s National Center for Digital Government, with which I am affiliated. But those concerns are magnified when the project requires teams of people from different sectors and organizational cultures to interact. The human element, not the technology, is often the central challenge and determinant of success or failure.

 

- Jurisdictional. Most countries, particularly in the West, have to face the question of federalism, that is, the tension between what is appropriate for the national government to do versus what should be undertaken by state and municipal governments. Part of this debate also revolves around what approach is best, to centralize or decentralize. There are no easy answers or one-size-fits-all approach.

 

- Operational. Getting the structure right is essential. These sorts of partnerships are often criticized as a way to outsource governmental functions to a commercial entity, and this can create a number of problems. One is corruption; by melding political control with economic power, as sometimes happens with these partnerships, there is a possibility for misbehavior. One way to avoid this is to be sure to get the operational structure right, and that means being attentive that the institutional framework provides adequate inclusiveness, transparency and accountability. One approach is to insert a “sunset clause” to the foundation of such partnerships, that will make their charter expire unless specifically renewed; this may help prevent the self-perpetuation of institutions.

 

- Civic. One danger of the union of the public sector with industry, is that it risks transforming the interaction between the individual and the state from that of a citizen to that of a consumer. It is fashionable in the US for government officials to talk about serving their customer – it’s meant as a way to stress a desire offer quality, and though often taken to an humorous extreme, that’s not what I mean to criticize. It’s that the interests of public authorities and commercial entities are often different, and these forms of partnership can run the risk of blurring the lines between the two. If not done well, it certainly disenfranchises civil society groups.

 

*   *   *

 

This overview of “public-private sector partnerships” or, the preferred “multi-stakeholder processes” as they pertain to information technology points to the need for regulatory structures that match this new form of organization. The fashionable term that has cropped up in this context is “self-regulation.” Just as we have brought stakeholders into the process of developing and stewarding technology through our multi-stakeholder partnerships, so too have we placed the governmental function of oversight into the private realm.

 

And in the same way as I lamented that the term “private sector” is so general that it causes as much obscurity as clarity, let me raise an objection to the term “self-regulation.” In fact, I don’t believe it even exists. A more fitting description is “co-regulation.” Implicit in this is an understanding that public authorities are still very much a part of the regulatory equation, though they have chosen to exercise passive authority rather than active authority. They hold reserve powers, but have by no means abdicated powers. This should be obvious, but unfortunately often it is not. It is important to reiterate that the public interest can be upheld within a co-regulatory structure. The question becomes: “What is the best role of the state in the process?”

 

This, of course, is a timeless question. What we know for sure is that the current manifestation of “multi-stakeholder processes” and “co-regulation” is in line with the broader trends in society, business and politics. We have seen a blurring of the lines of national and mutinational in the commercial sphere, a dilution of national sovereignty in the political sphere, and a spirit of global interconnectedness in the social sphere.

 

I will add that there seems to be a certain historical logic, too. That the broader trend in economics and governance is towards solutions that embody marketplace-based approaches, again, on grounds of economic efficiency. Say what you will about liberal market democracies – they work. Public-private sector partnerships and self-regulatory models, even if we distance ourselves from these terms, are both an embodiment and catalyst to that approach.

 

Whether we can successfully reap their rewards while mitigating their shortcomings will test our leadership in the times ahead.

 

Thank you.

 

 

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