Volpe Center: Transportation Strategic Plans

Public/Private Partnerships
Engines for Innovation in Transportation

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III. Lessons for Transportation

These case studies have reinforced the conclusion of the first volume of this series³⁰ that issues such as varying motivations and agendas, division of resource responsibility, and legal and institutional constraints can either support or impede the success of a public-private partnership. In fact, these issues have impacted these different partnerships in different manners, and in both positive and negative directions.

A. Motivations and Agendas

As several of these case studies have shown, it is not necessary that partners share identical or similar motivations and agendas, as long as their individual motivations and agendas do not conflict meaningfully with each other. In the case of the Clean Cities initiative, for example, both utility companies and state and local government agencies are motivated to increase their inventory of AFVs by their need to respond to legislated mandates for their vehicle fleets. In addition, the utilities can benefit financially from an increase in demand for their products -- natural gas and electricity -- that will expand their revenues, market base and profits. Environmental organizations and individuals who join Clean Cities coalitions may not necessarily share these legislated or economic motives, but their goal of reduced emissions and greenhouse gases can be attained by the same strategy. Thus, these separate groups can agree on a unified goal of increased numbers of AFVs because it meets their separate interests.

A similar situation exists in the CIREN partnership. All three of the major participants -- NHTSA, teaching hospitals, and automakers -- have differing motivations. NHTSA is primarily concerned with enhancing traffic safety and reducing fatalities and injuries; the medical professionals seek to improve their ability to treat trauma victims; and the automakers envision both improved products and greater market share. In spite of these divergences, all three partners support the common effort, because they believe that in doing so they also further their own goals. One true test of this partnership may arise if it is determined that the most effective means of implementing the results would also seriously disadvantage one of the collaborators. This could occur, for example, if it was concluded that a modification to the design or composition of vehicles could significantly reduce injuries and fatalities, but would also significantly increase the cost of these vehicles.

B. Resources

These case studies do not reflect any serious disagreements over the resource commitments of the various collaborators. This is true even though the types of resources contributed by the various participants are not consistently uniform. In the typical Fraunhofer Center model, for example, universities contribute facilities and make their faculty and students available; governments offer a base level of funding support and other financial benefits; the Society provides central administration, access to the resources of the other Centers and a valuable knowledge base; and clients fund specific projects. Each of these partners remains a willing participant, however, because they are convinced that the end product -- the Center -- is only possible because each partner contributed something that they could best provide.

In the case of the NGHSR projects, resource issues were not a significant problem because of the existence of a formal contract arrived at through a well-known procurement or grants process. The participation of other parties, such as the State of Illinois and the AAR in the Illinois Joint PTC project, was welcomed because of the advantages they brought to the ultimate success and deployment of the final product.

The Clean Cities initiative, on the other hand, represents an uncommon situation. The Federal government was responsible in the first count for imposing a mandate on certain vehicle fleet owners to change the technical characteristics of their vehicles. However, little actual funding was made directly available to the affected parties to assist in this effort. Instead, a voluntary, participatory process was promoted, in which the federal government assumed the role of coordinator, information disseminator, and facilitator, but not of primary resource-provider. In response, the actual increase in the number of AFVs in these fleet inventories occurred at an uneven rate across the nation, depending on the strength of the local coalitions that arose with Federal assistance in response to these mandates. This unevenness in fact may well be a consequence of the voluntary nature of the process and the lack of a large direct funding source to support these activities.

C. Legal and Institutional Issues

These case studies reflect examples of voluntary collaborations to attain a commonly held goal, such as CIREN and the Clean Cities initiative, or are the result of well-documented contractual actions, as with the NGHSR and Fraunhofer Center projects. A further look, however, uncovers some circumstances of a more compulsory nature in the first case, as well as potential competitiveness problems in the latter.

Although CIREN began as a voluntary partnership between the public funding agent, NHTSA, and teaching hospitals, the initial participation of the private sector partner, General Motors, arose from a settlement agreement with the Federal government regarding possible safety issues with some GM vehicles. This suggests that GM's initial association with the project resulted from less than purely voluntary impulses. It is the case that the second private partner, DaimlerChrysler, chose to join the CIREN effort. However, they support only one of the eight trauma centers, while GM funds three of the remaining seven locations. It will also be interesting to note whether GM's participation and funding support will change after the pending expiration of the settlement agreement in March 2000.

As noted previously, the Clean Cities initiative is also a voluntary collaboration. However, it was begun by the Department of Energy in response to Federal legislation that imposed mandates on vehicle fleet owners, and does not offer significant direct funding to participants. In addition, the most active participants in the local coalitions are the very groups that are both responsible for attaining these inventory targets and that have the most to gain financially from the results -- government agencies and electric and natural gas utilities. It is doubtful that such a concept would have been formulated and put into practice without the spur of these mandates.

In the case of the Advanced Turbine Locomotive, only one company (Bombardier) responded to FRA's initial Request For Proposals. The result is a relatively straightforward agreement between two parties to produce an acceptable product. The contentious issue of who will 'own' the resulting technology, and whether Bombardier will retain exclusive rights to produce the new locomotives even if it slows the introduction of this equipment into the nation's rail system, will need to be confronted in the next few years. It is possible that one of the two partners will need to compromise more than it may desire to reach an agreement and accept either reduced sales and profits, or a slower deployment of the new technology.

One of the potential obstacles to a private company considering collaborating with a Fraunhofer center is this same issue of ownership of the results. Since the Society typically seeks to retain rights to the technology being developed, at least outside the market area of the client company, that firm may prefer to attempt to develop the technology on its own or through a different arrangement. In addition, certain non-German companies may be deterred by the emphasis on German methods and products, or by the idea of transferring proprietary information outside of its own organization. Again, however, these are considerably lesser concerns for larger, multi-national corporations with a tradition of such collaboration. The same issues can arise whenever any competitive company seeks to undertake joint research or technology development with other institutions.

D. Summary

There is no single, simplified checklist by which any research and technology partnership can be structured or graded. There are too many variables, individual circumstances, and nuances among the major issues and facts that enter into any such effort to make such a formula feasible. However, an analysis of several public/private partnerships related to transportation technologies, as presented in this document and its predecessor report,³¹ does suggest some generalizations that may be prudent to remember when involved in or assessing such an activity.

The three main categories of potential partners -- government, private sector, and academia -- traditionally are motivated by quite different factors, and seek different goals as institutions. However, this does not automatically mean that there is no basis for common understanding and joint efforts. Partners can possess differing agendas, goals and priorities, as long as they do not seriously conflict with or contradict one another.

Circumstances rarely remain static: it can be assumed that the goals, agendas and motivating factors of the different partners will change over time, possibly even to the point where they may conflict with the partnership itself. It is useful to institute from the start an agreed process by which diverging views can be identified and reconciled during the duration of the partnership.

Although voluntary collaborations have many advantages, they may also prove to be less resilient or long lasting. Even voluntary collaborations may, at second look, possess some elements of compulsion. The more strongly the collaborators can identify with a common goal, and the more intrinsically important that goal appears to them, the stronger the partnership can be.

Partnerships that combine the best elements and advantages of each member, even if their contributions do not seem balanced or symmetrical, can make the strongest collaborations. As long as the contributions of each partner are recognized as being important and beneficial, even if they are not similar, disagreements over resource contributions should be minimal.

Private sector partners are extremely sensitive to issues concerning proprietary information, 'ownership' of results, and competitors' access to the product of collaboration. This sensitivity must be recognized and accommodated. Firm agreements about access to, and 'ownership' of, the results of collaborative activities, as well as the sharing of proprietary information among partners, will often be required to secure private sector participation.

The primary goal of most research projects is to develop useful products and services, which will be deployed by a variety of organizations -- public, private and academic. In order for this to occur, these organizations must be convinced that these products and services will benefit them and their constituents. Thus, a persuasive deployment strategy should accompany each research result, so that it will be eventually implemented and lead to the intended benefits.

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