Developing a New Market or Expanding an Existing One
Companies may not be able to sell their goods and services effectively everywhere. Limited demand or excessive fixed costs might make it difficult to expand into a given market, even if a company is in perfect alignment with public sector health goals.
Imagine, for example, that you are a government that wants to increase consumption of healthy snacks and decrease the consumption of unhealthy ones. In many countries, demand for healthy snacks would be insufficient to offset the costs of bringing these goods to a new market. Private-sector snack manufacturers are unlikely to attempt a massive expansion in a country without sufficient demand. Without getting into the snack business yourself-a difficult proposition for a government-how could you increase access for healthy substitutes to unhealthy processed foods?
First, you would need to create a viable market for healthy snacks by increasing demand within the country. Governments enjoy a unique capacity to engage the public as a partner, shifting tastes and influencing demand. By engaging in large-scale public education and marketing campaigns, governments can help the private sector to develop health-positive markets, increasing demand for healthy goods and services, and bringing the profit motive into better alignment with the public health motive. Governments can also decrease demand for unhealthy snacks by imposing taxes on them. By creating a more solution-friendly market, governments can ensure that their respective countries are competitive and receptive to NCD solutions.
The example of Singapore's Health Promotion Board provides a concrete example:
CASE STUDY Singapore's Health Promotion Board38 Established in 2001 by the Singapore Ministry of Health, Singapore's Health Promotion Board (HPB) often uses PPP strategies to promote healthier living in Singapore-with a special focus on improving the diet and exercise habits of the Singaporean people. Importantly, Singapore's government was wary of using taxation as a means of affecting dietary and exercise habits, preferring a voluntary approach to compliance. HPB would have to work with the private sector, rather than taxing them. The solution would require creative thinking. In an attempt to alter the dietary habits of Singaporeans, the HPB developed a "Healthier Choice" symbol (a decal which would adorn menus and packaging for healthier food options), provided advertising dollars to shift market preferences, and supplied grants to private-sector food and beverage companies to encourage reformulations. HPB's efforts were highly successful. Consumers responded to the healthier choice symbol with increased demand for healthier options, and by reducing the up-front costs of reformulation, HPB was able to encourage an accelerated timeline for reformulation efforts, helping the private sector to meet that demand. Using both demand- and supply-side levers (increasing demand for healthy products and providing grants to develop those products), HPB was able to "bend the cost curve" for healthy food products. By bringing more healthy options to market, HPB's model significantly affected the dietary habits of Singaporean citizens. We will discuss HPB in more detail throughout Section Two. | |
| Key Skills and Frameworks • Engaging the Public as a Partner • Social PPPs vs. Economic PPPs • Sharing Risks, Resources, and Governance • Innovation |
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38Trager, A., & Lundberg, C. (2018). Do the Elderly Have to Be Ailing? Singapore's Health Promotion Board.