Development partners are an essential tool for business

Public-private partnerships can, if executed correctly, be both a key tool in sustainable development and a crucial strategy for companies that want to enter – and prosper in – the global south, writes Andrew Mack.

Starting in the late 1990s when I first started working on public-private partnerships until today, I have heard partnerships for development described as everything from a magic bullet to a mere repackaging of common sense to nothing more than a development flavor-of-the-month.

But as the concept has matured – and as the role of the private sector as a true partner in development continues to grow – it seems to me the debate is over.

Public-private partnerships can, if executed correctly, be both a key tool in sustainable development and a crucial strategy for companies that want to enter – and prosper in – the global south.

Where partnerships might once have been a “nice to have” in new market entry, I would argue today that they are an basic tool for success. The reason is simple: As the term “emerging markets” moves from euphemism to reality – and countries like Kenya and Peru begin to join the global economy as markets not to be missed – the lines between development and business have become blurry.

Working in partnership enables firms to have development impact as businesses, while laying the groundwork for the business that brought them to new markets in the first place.

Recent reports have shown how partnerships deliver value to businesses entering new markets, providing opportunities to learn about and send positive signals to employees, consumers and governments.

At the same time, firms are increasingly seeing development-oriented partnerships as a key tool in limiting risk. There are real costs in moving into frontier markets — in everything from communications and supply-chain management to security and insurance. The learning from well-executed partnerships can help firms manage these costs.

Participating in a partnership also helps companies build bridges with host governments and gives companies insights into a government’s working style, buzzwords and internal culture. Where transparency can be an issue, partnerships provide an immediate and appropriate conversation starter for what might otherwise be uncomfortable meetings. And when looking at new fields – here tech comes to mind – where new policies are being developed every day, a good working relationship on non-policy matters can be a tremendous help.

Finally, there’s the issue at the heart of it all: reaching customers. For good reasons, most firms enter new markets – especially emerging markets – cautiously. Even if they have some experience on the ground in similar markets, they want to get their bearings before making a splash. Working with good local partners allows firms the chance to dip their toes in the pool before diving in completely.

Local partners know the pitfalls and the pressure points in new markets, and local partners come with their own existing networks, full of potential suppliers, allies and customers. The right kind of partnership can send a nuanced message to consumers that might be impossible to send in any other way: We are committed to your country, and we are trusted by people you trust.

At a recent Center for Strategic and International Studies event, for example, Rhonda Zygocki, Chevron’s vice president of policy and planning, discussed successful long-term partnerships in Nigeria and Angola. Today, she said, partnership is an essential part of the business plan when entering a new country, as they are doing in Liberia. They think of partnerships as part of new market planning.

Ambassador Mark Green, speaking at the same event, noted that nonprofits and other development partners have proved their value to companies. “An NGO can help tackle some of the market-entry issues like workforce development that can make a difference in whether a market is worth entering or not,” said Green, who is now president and CEO of the Initiative for Global Development.

When it all comes together, partnerships can be brilliant.

One of AMGlobal’s clients, LION, the world’s largest manufacturer of fire suits, was looking to expand their reach in Latin America and target Mexico in particular. Together we created a partnership with local and international NGOs and the Mexican government through the Mexican Fire Chief Association, repurposing used gear from Europe to reach underserved Mexican fire departments.

The program built bridges with the Mexican fire establishment, created an image for the company with the public, covered its costs – and it has developed into a model that LION is now expanding around the world called the 5/50 program. This new effort – also a partnership – will take in used gear and equipment from governments and companies with a goal of reaching 50,000 firefighters around the world in the next five years.

For firms bringing new technology or firms like LION that are hoping to build credibility, networks and experience on the ground fast, development partnerships are quickly becoming an essential business accelerator.

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The views in this opinion piece do not necessarily reflect Devex's editorial views.

About the author

  • Andrew Mack

    Andrew Mack is the founder and principal of AMGlobal Consulting, a company based in Washington, D.C. A seasoned, innovative professional with more than 20 years experience in international business and international development, Andrew has worked in some 70 countries, with special emphasis on emerging markets in Africa, Latin America and Asia.