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Private-Public Partnerships

Private-Public Partnerships in a Connected World

June 17, 2016
The World Economic Forum is a forum for discussing growth, understanding change and influencing the impact it has on our world. With the recent WEF ASEAN event taking place in Kuala Lumpur this month, those ideas were brought to the heart of Malaysia.

Make no mistake, we stand in the shadow of a changing world, with the rise of the fourth industrial revolution. It is a change defined by the synergy of industries, and yet riding on a wave of disruption, where the technological, physical and biological converge and interact.

At WEF ASEAN, GE both appreciated and participated in a forum which looked to understand how best to ensure society can benefit from this new industrial wave. Three core principles aimed to guide that forum: driving sustainable growth and social inclusion; mastering the fourth industrial revolution; strengthening regional relationships. Our changing world delivers a unique opportunity to do just this.

This is a revolution of disruption. Systems of working will be changed, the way we live and interact will adapt. And it is how government and private industry work together, which will ultimately dictate the direction of that change.


The change in numbers


Connectivity, accessibility and information will be key elements to this new world. Appreciating the development of that access provides an intriguing benchmark by which we can understand this revolution. According to the International Telecommunications Union, in 2000 there were 738 million mobile phone subscriptions. Today there are over 7 billion, with 97% global penetration. 95% of the global population are covered by a 2G or better connections, allowing data connectivity and opening up the opportunities a digital world can offer. Mobile broadband penetration itself has increased by a factor of 12 in less than a decade. [1]

US tech giant Cisco estimates there will be 50 billion devices online by 2020, that’s 50 billion opportunities for us to connect and interact with the world. It’s not just individuals that will benefit from this wealth of data and connectivity, but organisations. GE predict that industrial data will make up 50% of global data by 2020. That data allows us to operate more efficiently, and in a more sustainable manner than industry ever has before. The knowledge we gain from those insights offers a huge benefit in private-public partnership (PPP) across the globe.


The benefits of private-public partnership in ASEAN


The fourth industrial revolution has the opportunity to smash barriers and deliver a world with less inequality, to deliver a disrupted world. PPP will play a vital role in that.

Great PPP projects are not simply about knowledge, but about delivering tangible results. Often those successes can be found in the area of infrastructure. There’s a very real example right here, in the heart of Kuala Lumpur: the E38 SMART tunnel. By combining the needs expressed by government with the engineering expertise of a private company, this project not only helped deliver better transport links, but contributed towards a reduction in life threatening floods that had threatened KL. This is the goal of PPP, using the knowledge and skills of private companies to deliver a truly public benefit.

In this new revolution, infrastructure will be just as vital. And it is digital infrastructure as much as the tangible physical connections which will be key. This new, connected worker will find it hard to run a business in a state which suffers from poor data connectivity. A research lab will find it hard to develop new breakthroughs while suffering from constant blackouts. Retailers will find it difficult to compete in a global marketplace if their e-commerce platform lacks the physical links to deliver the product.

PPP can help bridge that gap, both in the need for sustainable energy supplies and the development of physical connections which tie together an increasingly digital world. There are strong arguments for doing so. A more connected world strengthens regional relationships. In ASEAN the growth of an interconnected energy network can be seen as a huge benefit to regional security and cooperation. To date, ASEAN shares over 3,500 MW of electricity across its borders. That’s power for homes. That’s power for business. Plans for an ASEAN Broadband Corridor could reap similar benefits. The future is connected, and those nations and organisations which most quickly adapt to that change, are the ones which will most readily benefit.


New industry and new solutions


The fourth industrial revolution can help us to build and grow on those benefits. Imagine the capability of a shared energy network with advanced diagnostics, power stations with increased sustainability and reduced downtime thanks to digital analytics and predictive monitoring. Think of an infrastructure development using advanced materials, a wind farm producing 20% more energy, a battery which can more efficiently store energy produced at a solar farm. These are what this new age brings: better efficiencies, a more sustainable world.

It’s not all energy and infrastructure either. This new world offers equal excitement to the everyday. Imagine a car you can summon with the touch of a button. Sounds like science fiction? We call it Uber. Just recently the Saudi Government investment division announced US$3.5 billion of confidence in this new model, showing an adapting private-public style partnership where the Saudi government now has the place on one of the world’s most exciting private companies, and Uber itself hopes to deliver a social benefit by expanding its services in a country with a significant gender discrepancy in access to transport.


Investing in ASEAN and investing in people


Ultimately the greatest investment in this new age of industry will, as ever, be in the people. In this, ASEAN stands in a privileged position. It is a region with a significant young, technologically adept workforce, able to adapt to new challenges and new systems. These are skills we must nurture across the globe.

Government and private institutions must work together to ensure this education continues, from the grass roots right through the layers of industry. Children are often the quickest to adapt to new technologies, and providing them the capability to do so at an early age is vital to the long-term benefit to our nations and our economies. Industry and government must work together to provide this education.

Preceding revolutions have delivered huge benefits to society, improving quality of life and increasing global income levels. Ultimately this new revolution has the potential to do the same, with some predicting it will add US$15 trillion to global GDP by 2030.

The increasingly diversified nature of the workplace, and accessibility of data connected industry, could deliver wider benefits, reducing inequality, and making ours a more sustainable world. In that, PPP has a vital role to play. It is up to us, to ensure it delivers.