The role of government in achieving scale

27th Apr 2010
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I was reading my friend Hans Taparia’s (Hans is a founder of Tasty Biteblog today and he wrote about the power of public-private partnerships in driving innovation. In his most recent post, Hans said,

driven by innovation, social ventures that are successful start attracting attention from constituents to policy institutes to the media. Increasingly, governments won’t want to be “left out” and with their reach could help social ventures scale disproportionately.

What is stated here is very intriguing. On one hand the very reason why social entrepreneurship has taken such a hold on our minds is specifically to address shortcomings in the public sector. It is often failures on the part of our governments that created opportunities for socially-conscious entrepreneurs. However, even with the rise of multinational corporations and international-NGOs, one must acquiesce that the state still plays a critical, potentially transformative role in our daily lives. What Hans highlights here is one example where governments could operate at their best. Responding to successes in the private sector, governments could facilitate the expansion or replication of a proven concept to levels of scale previously thought unimaginable.

However, there is a possible dark side to this dynamic as well. First, what Hans speaks about could also be seen as an institutional creep, a power grab by players in the space looking to capitalize on the success of others. Governments when entering into the private-public arena are susceptible to massive conflicts of interest, as they become both the innovator and regulator — an ongoing dance between two potential foes. Second, such an approach will always remain reactive, with governments relying on the private sector to discover and iterate new ideas. If possible, we need to devise governments that can proactively facilitate and direct new ideas back into the public sector, similar to the ways the East Asian Tigers directed their own rapid technological developments over the past five decades.

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