Problem Solving with the Private Sector

A Public Solutions Handbook

Daniel E. Bromberg

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138920798
• eBook ISBN:
  9781317416296
• Topic: Politics & International Relations
• Subtopic: Economic Policy
• Index: Politics & International Relations

Problem Solving with the Private Sector presents advice and solutions for fruitful government–business alliances from the perspective of everyday public management. With a focus on job training, economic development, regulation, and finance and innovation, each chapter discusses a traditional tool of government presented in a practical and applied manner, as well as the implementation of the tool with clear examples. Content-rich case studies on a wide range of policy issues, including regulatory policy, natural resources, manufacturing, financial services, and health care highlight opportunities for government and business to collaborate to pursue the public good.

This book offers current and future public managers possible solutions to complex problems for effective government–business alliances in a range of settings. It is essential reading for all those studying public management, public administration, and public policy.

Part I
Job Training

1
Public–Private Collaboration in Workforce Development

Examining the Intersection of Public Education Programs and Private-Sector Employer Needs

Lauren Bock Mullins, Alexander C. Henderson, and Linda L. Vila

Workforce skills and the nurturing of individual capacity are gaining increasing attention as an area of cooperative activity for public and private organizations. Though much attention has focused on capacity building within organizations and on workforce develop ment programs as a means of supporting the unemployed, another specific focus is on the creation and development of innovative educational and job training programs. In many instances these new programs are taking place at local schools, community colleges, and state universities. The benefits of these activities accrue to both sectors: public-sector organizations provide training and development more directly tied to the needs of employers; by taking part in the training, private organizations ensure that they are able to hire people with the requisite skills and abilities. To explore these issues, this chapter provides an overview of the literature regarding public–private partnerships and collaborative activities.

These types of intersectoral collaborations are often referred to as “public–private partnerships” (PPPs), “public–private cooperation” (PPC), or other related forms, such as “business improvement districts” (BIDs) or “community improvement districts” (CIDs). These partnerships are, however, not without attendant conceptual difficulties. Although American socio-political and legal foundations may encourage us to adhere to a separation of the public and private sectors, the interrelationships between these sectors are instead becoming more and more prominent. Businesses are experiencing varying amounts of stress as they hire and retain employees in the midst of pressures from the organization’s environment, whereas governments work to both improve economic development opportunities for businesses and become more efficient during exceedingly challenging financial times.

These challenges are especially important when considering the shifts in demand for and consumption of goods and services, and the necessary skills and training related to these shifts. Recently, Alperovitz discussed a “New-Economy Movement,” noting that “… the movement seeks an economy that is increasingly green and socially responsible, and one that is based on rethinking the nature of ownership and the growth paradigm that guides conventional policies” (Alperovitz, 2011, para. 2). This movement to the “New Economy” produces concomitant pressures on both the public and private sectors to provide talented and skilled workers who fit production and service needs. These economic challenges seem far beyond the capacity of the current economic and political system, suggesting a greater need for innovation and substantial changes in systems. Furthermore, the moving target of what the new economy actually is or should be remains a quandary. The initial expectation was that information technology would create a new economy; instead the new economy seems to have begun in the 1990s with increasing innovation in management and creating more competition among businesses, as opposed to the emergence of the Internet (Farrell, 2003).

The need for workforce development is not a new trend for the public sector, which has long developed and supported workforce development programs, with a number of these initiatives stemming from the highest levels of government. Presidential initiatives for public–private partnerships began as early as 1933, when President Franklin Delano Roosevelt commissioned the Tennessee Valley Authority (Roosevelt, 1933). Over the past 80 years, public and private organizations have become increasingly interested in partnerships to develop workforce skills and individual capacity, and to produce mutually beneficial outcomes. President Barack Obama announced in February 2014 the launch of a public–private program to promote economic and educational opportunities for black and Latino disadvantaged youth; the program will have $200 million in support from foundations, public officials, and leaders in business (Lee, 2014).

Private-sector organizations are taking notice of the benefits of collaboration in providing employee development and ensuring a sufficient supply of workers in the immediate geographic region. A survey of private-sector executives found substantial concern for training and development amid the recovery after the Great Recessions, with more than two-thirds of CEOs planning to further invest in the nation’s talent pipeline (PricewaterhouseCoopers, 2013). Such investment allows for some amount of influence in the process of defining and shaping the local available workforce without the risk or loss of profits that could come with the full assumption of providing internal training or education.

Businesses are, in many cases, struggling to recruit appropriately educated and skilled staff. Winthrop, Bulloch, Bhatt, and Wood (2013) noted, “[t]he inability to secure future talent with the right skills and to manage talent-related costs keeps firms from being able to quickly scale up their operations to meet demand in new locations and to launch new products and services” (p. 2). Firms are reacting by launching efforts to build sustainable talent pipelines and purposefully seeking out and engaging in public–private partnerships.

The educational focus of public–private collaboration to build these talent pipelines is a relatively new trend, with many public schools and universities engaged in workforce training programs that have the potential to increase both development and enrollment. An influx of capital to support new programs is necessary and significant, as cuts in funding for public education are becoming deeper and more pervasive. Private educational institutions are not far behind their public counterparts, exhausting long-held techniques to lower operating budgets, keep tuition down, increase enrollment, and enhance reputation.

A number of questions arise as to the appropriateness of such partnerships in relation to public education. For example, does it make sense for public education institutions to knowingly educate students based on the surrounding job market, or does this, in essence, constitute a process of catering to business preferences? This also raises potential questions about the structure of higher education. If pipeline programs are successful, does it make sense to move toward further privatization in which private educational institutions would compete with public institutions?

Public–private collaborations in education also raise questions of concern for businesses as to whether it is worth investing in the local talent or better to contract out to ready-to-go staff in other more economically favorable regions where workforce costs and the regulatory environment are less intensive. One needs to look no further than debates about minimum wage and fair compensation to understand how outsourcing can wreak havoc on a local economy. However, with advancements in technology and globalization, it could be argued that outsourcing may be a more effective and efficient way of handling staffing needs.

Though compelling questions exist from the perspectives of both the public and private sectors, the focus of this chapter is more preliminary and broad: In essence, why are public–private partnerships appropriate in providing workforce training, and are they effective? This chapter begins with an overview of public–private partnerships. This is followed by an introduction to current examples of public–private partnerships aimed at the development of workforce training programs in public educational institutions. Examining the current state of public–private partnerships in theory and practice will provide a more nuanced understanding of program implementation, an opportunity for further robust theory building, and future creation of best practices for such collaboration. This will contribute substantively to the base of knowledge available to students and practitioners interested in collaborative activities.

Examining the Public–Private Distinction and Collaboration

Developing an understanding of the characteristics, distinctiveness, and compatibility of the public and private sectors is an important first step in framing a discussion of the collaborative process. Identifying similarities and differences across sectors allows for making distinctions and determining areas of intersection in which these partnerships can be established. Scholars and practitioners from both the public and private sectors have grappled with these topics and have provided answers steeped in theory and observation.

A number of key distinctions between sectors exist. Allison (1992) explores Sayre’s precept that management of public and private sectors are not alike, but for insignificant similarities such as planning strategy, managing internal components, and managing external constituencies (p. 490). Perry and Rainey (1988) outline and explore the varying ways that scholars have differentiated the sectors, and offer a typology for understanding and unpacking the differences in three arenas: ownership of the organization, as determined by the legal status of the entity as a publicly or privately held body; funding of the organization by public or private entities (or a combination); and mode of social control, which differentiates between the influence of market forces and the “polyarchical” control of a public-sector bureaucracy (p. 195) (see Table 1.1).

Boyne (2002) finds evidence in the literature that public organizations are more bureaucratic and that managers in the public sector have less organizational commitment and seem to be less focused on materialism than those in the private sector. In essence, sectoral differences exist and are a key consideration in how we think about these collaborative activities.

Collaboration is, however, possible and important. Osbourne and Gabler (1992) focus on the promise of integrating private-sector practices into public-sector agencies. They promise renewal of the public sector and a rethinking of government through a shift in focus to become more “market-oriented,” “mission-driven,” and “customer-driven” (Osbourne & Gabler, 1992). A natural extension of this package of public-sector reforms, entitled the “New Public Management” (NPM), encourages mutually beneficial cooperation between the public and private sectors given the decentralization, flexibility, and performance-based nature of these relationships.

Table 1.1 Differentiation of Sectors

Concept	Description
Ownership	Ownership of the organization is one factor that creates distinctions between the public and private sectors. Organizations can be publicly owned (e.g., governments, government corporations, or enterprises) or privately owned (e.g., private enterprises, government-sponsored enterprises, or government-regulated enterprises). Hybrid models may share authority in leadership positions in collaborative activities.
Funding	The primary sources of funding for organizations are important in differentiating sectors. Public organizations are generally funded with the proceeds of taxing activities. Private organizations are generally funded by the proceeds of market-based activities. Hybrid organizations may be publicly or privately owned, but may derive funding from public sources or market activities.
Mode of Social Control	Organizations may be shaped or controlled by a number of external controls. These may be the aggregate decisions of individuals participating in the market (private organizations) or the pluralistic values and interests of individuals and groups acting to influence governmental agencies (public organizations).

Note: Adapted from Perry and Rainey (1988).

Both the public and private sectors offer unique attributes to public–private partnerships that may prove beneficial. Public organizations are well versed in navigating regulation, meeting accountability expectations, and ensuring transparency. They are skilled in resource planning, due to stringent annual budgets and acute resource dependencies (Johnson & Scholes, 2001), and in managing project risks associated with strategy and political volatility (Baldry, 1998). Public managers are more oriented to social goals and public interest (Perry, 1996, 1997) and, thus, are able to balance a multitude of internal and external stakeholder interests and agendas, often with contradictory demands and complex obstacles, while assuring stakeholder participation and collaboration in the decision-making process (Behn, 2003; Halachmi & Bovaird, 1997; Llewellyn & Tappin, 2003; Thong, Yap, & Seah, 2000). Public organizations are successful in retaining employees and have less employee turnover than private organizations do; as a result, public servants often have a better understanding of public-sector culture, services, and process than outside experts do (Scholl, 2004). The public sector values equity as an important goal and has a great commitment to providing access to services for all citizens regardless of their ability to pay (Berman, 1998).

Private organizations offer greater variance than public organizations in the actions management can implement, and they must follow fewer restrictions and regulations governing structure and organizational form. They have more discretion in dealing with employees, particularly in offering monetary incentives and in undertaking and imposing employment actions without repercussions (Meier & O’Toole, 2011; Rainey, 2003). Similarly, they have more discretion in fulfilling customers’ needs and generating customer satisfaction (Jurisch, Ikas, Wolf, & Krcmar, 2014). This sector possesses the malleability to change procurement processes, products, services, and market position (Meier & O’Toole, 2011) and, as a resul...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• Series Editor’s Introduction
• Part I Job Training
• Part II Regulation
• Part III Economic Development
• Part IV Finance and Innovation
• About the Editor and Contributors
• Index