Governments increasingly see that the private sector can be a trusted delivery partner. And, as a result, a range of new opportunities for private sector participation are emerging. Governments and citizens should be delighted.
For years, we have been watching the private sector take a more active role in the delivery and operation of infrastructure assets and services. From basic operate contracts through to complex investment vehicles, private sector players have taken on a growing role in financing and delivering government infrastructure.
Now, however, that relationship is evolving. Looking beyond traditional financing partnerships, many governments are now striving to create partnerships that give them access to enhanced expertise and capabilities.
Consider, for example, the global partnerships that underpinned the rapid development and distribution of multiple COVID-19 vaccines. Or partnerships like that between NASA and SpaceX to bring people and resources into orbit.
The relationship is also deepening. In the emerging markets, we are starting to see a significant drive towards the recycling of public capital through the privatization of existing government assets. Increasingly, governments and investors are starting to look at partnering on greenfield assets as well. The range of opportunities for partnership are growing.
Tied to the unprecedented permission to reform (a trend we discussed earlier - Trend 9: Government gets permission to transform), many governments are now also starting to think more critically about whether they really need to be directly delivering all the services customers demand through government assets and human resources. This approach of breaking the chain between the need to own assets and the delivery of services This is leading many governments to reconsider what they can outsource and oversee and what must remain within their direct control. They are looking to the private sector to fill that gap. Public accountability will remain paramount and procedural probity a must. But, with sound judgment, much will be possible.
Over the coming year, expect to see some governments start to reconsider the role the private sector plays not just in asset delivery, but also service delivery. Increasingly, this will be evident at the regional and sub-sovereign levels as municipal governments seek to leverage private sector expertise and technological innovation into areas such as waste, water, land management and e-governance.
We expect that these new partnerships will be driven by innovation and the desire to deliver more to stakeholders. The outcome should be improved value for users and government alike.