As governments look toward meeting the Sustainable Development Goals, they are increasingly interested in working with social enterprises to fill gaps in service provision. At the same time, social enterprises are generating new business model innovations—from process innovations that lower the cost of healthcare, to new technologies that enable distance learning for students—that can be harnessed to improve outcomes in overall delivery systems. But, as a whole, social enterprises rarely have wide support from government and therefore aren’t as successful as they should be.
Many governments fear partnering with the private sector, and remain disconnected due to perceptions of risk and a lack of trust. Likewise, social enterprises recognize the vital role of government partnership, but often either mistrust the intentions of the public sector, or can’t get a seat at the table. These organizations face difficulty achieving scale and having their approaches adapted and replicated by others. They often must rely only on themselves to promote their solutions to wider networks.
The lack of trust and connections on both sides of the aisle results in a lack of public private partnerships (PPPs) at scale, and overall market inefficiencies. There must be links between private and public actors if we are to see improvements at the national level from gains in health and education outcomes already demonstrated by social enterprises. Neutral organizations can play a critical role in bringing social enterprises and governments together.
The role of a market facilitator
Market facilitators can bridge this gap, identifying promising social enterprises and promoting them to governments as a distinct type of business model. Applying a market facilitation approach to service delivery systems can help social enterprises contribute to national development goals. Market facilitators can support governments in gradually building stepping stones to increase their market shaping capacity with the end goal of creating a better service delivery system, with better quality and improved access.
Five key roles of a market facilitator
- Be neutral – market facilitators actively listen to and support both public and private actors.
- Minimize risk by “owning the blame” for a reform until a critical mass of government actors have been brought on board; this reduces the need for a single government champion.
- Build awareness of the actors in the market, bringing visibility to social enterprises with demonstrated success and readiness to scale.
- Map out the necessary building blocks for the system to achieve improved outcomes – this includes supply and demand side interventions, improving data collection, and ensuring equity.
- Bring recommendations to life – support governments and the private sector by facilitating requests for proposals, drafting contracts, and mediating between parties.
Challenges that hinder public private partnerships
Governments and the private sector face challenges developing public private partnerships. The capacity to develop, execute, and enforce contracts is often lacking on the government side, and the ability to negotiate during the process to finalize partnerships can be challenging on the private sector side. This is particularly acute for social enterprises, which may be smaller and newer organizations compared to large corporate actors involved in many public private partnership agreements.
Market facilitators can help provide clarity around the rules and responsibilities of each party in a partnership. These organizations can manage communication between government and the private sector, and work to identify funding, legal definitions, and frameworks for public private partnerships. Strong market facilitators help governments recognize that social enterprises can have varying business models, and ensure that each party’s voices are heard.
Increasing primary healthcare access in Uttar Pradesh through a new PPP model
At ACCESS Health International and Results for Development (R4D), we have documented promising social enterprises across sectors that have developed models for delivering high quality, high priority services. Despite their potential, many have had difficulty achieving scale, linking to networks, or having their approaches adapted and replicated by others. Meanwhile, we also work with governments that are intrigued by the growing social enterprise market and are increasingly interested in formal partnerships.
In Uttar Pradesh, ACCESS Health’s role as a market facilitator has helped to set a new government partnership with the private sector up for success in improving primary care outcomes. With funding from the Bill and Melinda Gates Foundation, ACCESS Health worked with the government to establish objectives and conduct a market assessment, engage the private sector, and align incentives in the design of a new public private partnership for primary care. From the start, government actors recognized that new process innovations in organizing care, such as family health teams, had the potential to improve outcomes and lower costs. However, they also realized that the public delivery system and its existing human resources structure would face challenges to pilot new innovations. Thus, the new public private partnership for primary health care will allow the government to experiment with new ways of doing things and, if successful, scale or adapt these approaches into the public system.
Looking forward—advancing the role of a market facilitator
ACCESS Health International and R4D believe that market facilitators can help build trust between the public and private sectors, align incentives, and bring the right actors to the table. As governments look to develop new public private partnerships with social enterprises, neutral partners who act as a market facilitator can increase the likelihood of success. As more market facilitators emerge globally, the knowledge generated at the country level is crucial for informing our collective understanding on how to strengthen and support public private partnerships that improve service delivery.
Editor’s Note: This blog was originally published on the Practitioner Hub for Inclusive Business.