The dynamics of the win-win that public-private partnerships can offer are clear: Faced with the need to embrace technological advances to stay competitive, companies need both access to capital and workers with the skills to help them leverage the capabilities of innovations in areas like data science, cloud computing and smart manufacturing.
Meanwhile, state and local governments looking to spur economic growth need to attract new businesses, as well as nurture existing ones. Recognition of that potential for mutual benefit is the driving force behind a growing number of public-private partnership initiatives.
In Indiana, that process starts with a dialogue with the CEOs of companies operating in the state or considering expanding there about what would move the needle, Ian Steff, executive vice president and chief innovation officer at the Indiana Economic Development Corporation (IEDC), told CEOs gathered for a recent Chief Executive Magazine roundtable co-sponsored by the IEDC.
“These are industry-driven partnerships centered on areas like energy storage, cybersecurity and the Internet of Things,” said Steff. “We ask industry: ‘What do you need in terms of matching resources or shared infrastructure to ensure that Indiana continues to lead in the sectors we’ve led for so many years in advanced manufacturing, life sciences and information technology?’”
Often, the answer is a skilled workforce. Farooq Kathwari, CEO of Ethan Allen, pointed out that while tax incentives get a lot of media attention, skilled labor and a friendly regulatory environment are the real deal-breakers for his company. “For us, the right labor is number one, and then the overall environment for working with the government needs to be good. After that it’s always good to get some benefits, but that will be third or fourth on the priority list.”
Ensuring that the skills being taught at local colleges and universities are those the companies based there need is one way to address the workforce issue, noted Steff, who cited efforts in his state as an example. “Our former lieutenant governor, Sue Ellspermann, is now the president of Ivy Tech Community College, our largest college system,” he said. “She’s been transforming that place to ensure that we’re keeping up [by] changing curriculums to meet the skill set needs of companies.”
Companies, too, can spur academic change at the local level. Danbury, Connecticut-based Ethan Allen is among an increasing number of companies working directly with colleges and universities to develop the talent it needs. “We are next-door neighbors to Western Connecticut State University, and we have utilized that quite well in terms of internship programs and recruiting,” said Kathwari. “We’re deeply involved with the university.”
ProspEquity Partners has also been building relationships with schools around the country over the past decade to find and nurture talent. “We think the relationships we’ve developed with five or six engineering schools give us very solid insight into where the talent lies and the ability to develop successful internship programs,” reported Chris Ramonetti, CEO and managing partner, who added that academic partnerships can also bring insights on innovation. “We have an academic board of advisors from various universities who provide a touchpoint for what’s coming next in technological innovation.”
However, as important as educating locals in industry-specific skills is to many companies, it’s just one piece of the equation, the roundtable participants agreed, citing regional ecosystems that can offer talent, shareable resources and access to financing as ideal environments in which to locate. These were defined as “communities where collisions of resources and relationships build for greater innovation overall.”