Public-private partnerships work

Amy Jackson

As countries seek new sources of economic growth, encouraging and supporting innovation in the economy must be a priority of any government’s policy. However, in an ever more complicated world with nonstop technological developments in IT, services, manufacturing and other sectors, developing sound public policy that embraces innovation rather than stifles it is a huge challenge.

The Korean government has emphasized a creative economy and deregulation as key strategies needed to achieve further domestic economic growth. Therefore, this is an important time for the government to dig down and analyze how best to achieve these important goals. Innovation comes primarily from the private sector, and effective public policy must incorporate the needs and views of industries rather than artificially trying to lead industrial development. In reality, inventors and developers in industries have the best understanding of innovation and may have excellent suggestions as to what sort of public support best amplifies the effects of new technologies in the market. Therefore, the process of implementing new policies and amending existing ones should be inclusive of stakeholders at all levels and allow ample opportunities for private sector views to be known before making final decisions. Indeed, the creative ideas and experience of industries need to be seriously considered in order to make such policy changes relevant - and for this reason, now is a good time for the Korean government to make better use of public-private partnerships in the policy-making realm.

In this vein, the recent effort by the U.S. government to set new standards for cybersecurity provides a good example of an effective public-private partnership. In February 2013, the Obama administration issued an executive order (EO) on “Improving Cybersecurity Critical Infrastructure.” The EO directed the National Institute of Standards and Technology (NIST) to create a framework based on existing voluntary standards and best practices to help critical infrastructure owners and operators manage cyber risks. It does not promise to prevent all cyber incidents. Instead, and more realistically, it seeks to help detect, respond and recover more quickly should a cyber incident occur. A key component of the EO was not only to mandate that NIST engage the private sector as a key participant, but to explore incentives to encourage organizations to participate. Notably, the program purposely avoided a one-size-fits-all outcome. Rather than mandating that companies adopt a specific way to tackle cyber risk, the outcome was technology neutral and intended to be adaptable over time to reflect new technologies, business models and threats. Indeed, many industry stakeholders actively participated in this process, including attending workshops and commenting on drafts of the cybersecurity framework.

Amcham recently hosted a group of industry and government representatives who talked about how well this process worked. Perhaps what was most striking was that the U.S. government representative from NIST stated that the government saw many specific benefits from engaging actively with the private sector on this important project. First, by involving the private sector, the government was able to better identify which parts of the system are most critical and deserving of special attention. Secondly, this inclusive process ensured industry buy-in and helped hold people accountable to enact better protections. Finally, with the help of the private sector, the government came up with a framework that could be scaled internationally.

This open and inclusive approach to public policy making could be applicable to many issues and sectors that face challenges in Korea. One of these is cloud computing. Korea intends to be one of the first countries to legislate the cloud. What Korea does could have a tremendous effect on the Korean economy going forward. As such, this should not be rushed, but rather done in a deliberative and inclusive manner. Another is ensuring that the national health care system adequately rewards innovation while remaining fiscally solvent.

Considering the ever-changing global business environment, effective public-private partnership should be explored more by Korean government officials. Private industry awaits more opportunities to provide input and unique expertise based on longtime experience in multiple jurisdictions around the world. We, American companies, look forward to sharing our experiences and techniques for mutual progress and prosperity.

By Amy Jackson, president of Amcham Korea