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"The key to U.S. competitiveness is innovation-the ability to deliver projects, processes, and services that cannot be easily or inexpensively produced elsewhere. If we are a stationary target-if we're not innovating very rapidly-other nations are going to catch up..."

Michael E. Porter, Harvard Business School

IV. Relevant Lessons for Transportation

In order to maximize the potential of public/private partnerships, decision makers must consider the specific challenges for this type of collaboration, especially the four criteria highlighted in this report: motivations, resources, legal and institutional issues, and agendas. This section examines the lessons learned and provides additional examples within the field of transportation. Figure Three summarizes these challenges and presents strategies that may enhance success.

   A. Motivations

Both public and private sector partners can undergo changes in their original priorities in response to changing circumstances. Thus, the initial agreement on goals and objectives can become outdated or unrealistic over time. In the public sector, election results and changes in political priorities can cause these shifts; changes that affect the estimated risks or returns on investment can have a similar effect on private sector participants.

The PNGV example provides insight into how public and private motivations can work together. In this instance, each of the partners has a compelling, ongoing interest that makes the project work. Public sector interests seek an improvement in fuel efficiency for energy and environmental reasons, while private sector interests want to support their competitive edge while seeking to avoid further federal regulatory responsibilities.

   B. Resources

It can be difficult to reach or maintain agreement on the proper level and kinds of resources that each partner is expected to contribute to the program. Disputes may arise from the sense that one or more participants is not contributing a fair share, or the feeling that one partner receives benefits disproportionate to its contributions. Partners may also adjust the level of resources they are willing to contribute to the project, due to changes in their priorities or their assessment of the prospects for success.

The difficulty in bringing together private sector partners to develop fuel cell technology for marine applications highlights the resource issue. Funding for this program comes from individual agency initiatives rather than federal legislation. Thus far the initiative has not been able to attract the technology and resources of private sector partners. In contrast, the AGATE Consortium brings together the knowledge and resources of 70 partners. New partners with additional expertise and resources are brought into the consortium as the need arises.

Challenges to Public-Private Collaboration