As we have discussed, private-sector partners typically operate in the pursuit of value. This value may not necessarily come in the form of profit, but while companies may be inclined to participate in public projects as a show of goodwill or brand-building, the PPP model is contingent on providing both partners with tangible value.
As previously noted, the accrual of tangible value doesn't necessarily mean that private-sector partners are operating in opposition to public-sector health goals. It does, however, mean that private-sector partners must, in some way, stand to eventually make a profit from a PPP.
Many governments and public advocates look askance at the profit motive, but it is crucial when engaging a private-sector partner to give that partner the latitude to assert on behalf of their bottom line. Private-sector partners cannot be expected to take on losses in the long run-though in the short run, depending on the scope of the project, PPPs can start out in unprofitable circumstances. We will discuss project scope in a few pages.
To that end, private-sector partners must be authorized and capable of analyzing PPPs on an appropriately long timeline. Oftentimes, the private sector, beholden to a quarterly earnings report, is unwilling to accept losses in the short term. Private-sector partners with wide latitude to assess the project on a longer time frame are those who are more likely to make for good partners.
It is also worth noting that the shareholder-value-above-all-else model is increasingly becoming antiquated in the business community. The Business Roundtable, a non-profit association based in Washington, D.C. whose members are all chief executive officers of major U.S. companies, released an updated "Statement on the Purpose of a Corporation," which includes commitments to investing in employees, dealing fairly and ethically with suppliers, and supporting local communities. The Statement concludes, "Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country."37
Thus, corporations may be primarily concerned with profits, but they are also deeply concerned with their strategic goals, brand image, and ethical engagement with various stakeholders.
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37The Business Roundtable. (2019). Statement on the Purpose of a Corporation. Retrieved at https://opportunity.businessroundtable.org/