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Category: Business and Society

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Reflection by Shreyas Bhatnagar, MBA Candidate ‘20

This summer’s Business & Society Course Privatization, Nationalization and Public-Private Partnerships was one of the hardest classes to get into. I was told by my academic advisor, two semesters in advance, to be on the lookout for this class. With minimal spots available and a unique DC-immersion opportunity for online students around the country, each student has to be the first to register online. The registration process in itself was a competition, similar to the many themes we discussed in class.

I signed up for this class because it applied to my job at the U.S. Department of Transportation (USDOT) where I work for a mode of transportation, the Federal Railroad Administration (FRA). The current administration is keen in understanding and applying privatization and private public partnerships (PPPs) within the federal government. At the FRA, we are working on three large privately sponsored environmental impact studies which is the first step to bringing a project to a construction ready status. The projects allow for private technologies, previously not used in the U.S., to use their intellectual property for commercial means. Fortunately, or unfortunately (depends on how you view this), my region has two of the three projects FRA is currently working on including two new technologies, Hyperloop and Super Conducting Magnetic Levitation (SCMAGLEV). Hyperloop is a proposed mode of underground passenger and freight transportation under development by Tesla and SpaceX. The SCMAGLEV project is sponsored by Japan Rail Central, a Japanese railroad company who has political connections all the way up to their Prime Minister. The Prime Minister of Japan has met with both President Trump and President Obama to discuss SCMAGLEV technology and requested their support of their project.

Since I play a leading role in ensuring these private companies and the federal government provide economic opportunities to both the private industry and the public; the Business and the State: Privatization, Nationalization and PPPs class was a perfect fit for both my career and growth within the agency.

The class itself was broken out into two sessions. The first session was an online learning environment where Professor Weiner conducted virtual classes with a lot of background information on privatization, nationalization, PPPs, and the role of government. There was discussion and readings that helped the class understand and paint a picture on the pros and cons of privatization and nationalization. The second session was a four-day marathon of classes which included speakers and live learning. The live learning sessions were particularly immersive because we, as students, had the opportunity to learn about how others use their careers to change the world around us. Traditionally, students are expected to view lectures, attend class, read articles, textbooks, and journals to gain an understanding of a specific topic. The live sessions helped students learn what actually goes on in the real-world.

The opportunity to view presentations in class and visit experts that work in our government during our visit to Capitol Hill was and will be my most memorable moment at The George Washington University.

When I first came to class, my understanding of a PPP was that it was the best option out there for governments. With budgets being slashed and government providing less funding for basic necessities; the idea of a PPP is something all public servants believe is the answer to their fiscal problems. This class opened my eyes when we dug deep into understanding how PPPs actually work. Over the span of multiple discussions with experts in varying fields, there were several themes that were central to all conversations. Important discussions during class highlighted topics of stakeholders, accountability, political decisions, direction or alignment on how to move forward once in partnership, competition, corruption, and most important profitability. The speakers were effective in painting a picture on how PPPs and nationalization works around the world. Without having real time discussions from experts in all fields, it would be hard to learn the intricacies of how agreements are made and best practices to use moving forward. I am glad to have experienced a course where I get to meet people from all backgrounds and have the opportunity to learn and understand different perspectives. The opportunity to view presentations in class and visit experts that work in our government during our visit to Capitol Hill was and will be my most memorable moment at The George Washington University.

I will use the lessons learned from this class and apply them to my current and future projects. In fact, I was recently able to use the knowledge gained from this class to understand how to make an important work decision. The funding for the SCMAGLEV project congressionally requires that the private entity show how, once built, the project will benefit the public. The idea of benefiting the public has a different meaning for me after taking this class. Understanding that a good deal needs to be made at both sides for PPPs to be successful will be my negotiation point. By using key points and takeaways, I now have the confidence to ensure public money will be used to benefit both the private company and most importantly the community.

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By Deedi Yang - MBA '19

I have taken several Business and Society courses during my studies at GW and thoroughly enjoyed the unique learning experience each time. The hallmark of the Business and Society series is without a doubt the speakers, as they comprise the majority of the program content. The quality of learning is largely dependent on these speakers’ presentations and class engagement which are large contributing factors to how much one gains from the course. It is impossible to predict the classroom dynamic or what to expect from the different speakers, but just as it was with the other Business & Society courses I participated in, including Corporate Fraud & Corruption and Fintech, I was not disappointed.

 

Our first speakers Jennifer Hara, Director of PPP Services for Public-Private Partnerships at IP3 and Seth Miller Gabriel, Director of Strategic Initializes and Programs at the Association for the Improvement of American Infrastructure (pictured above) were the perfect pair to kick off the course. Their casual yet substantive dialogue was exactly the kind of engagement from which I learn best. They introduced the idea that would for me become the thesis of this course, which was that as popular as the concept of PPPs is, they are not always successful nor the best or most effective solution to a problem. This notion surprised me coming from the pair who both work as consultants for advisory firms promoting PPPs, and as such I would have expected them to be the biggest proponents of the model. As a DC resident, I appreciated Seth’s discussion of his time as the first Director of DC's Office of Public Private Partnerships and his humorous and honest account of the challenges he faced there. He also delivered the most memorable quote of the course for me which was comparing PPPs to a marriage, and that divorce is very expensive due to the negative externalities. In order for the arrangement to be successful there needed to be an alignment of interests between the public and private entities with each having something to gain from the partnership. This need to maintain a positive, mutually beneficial relationship for both parties, was a common theme expressed by subsequent speakers.  

 

If I had to choose just one takeaway from this course, it would be the question of what a PPP is and what a PPP is not, and the fact that no two speakers had precisely the same definition. An important distinction raised for me by Professor Weiner, was his emphasis that not every privately outsourced public project is necessarily a PPP (otherwise every government contract would be considered one). I had to continually remind myself of this throughout the four days as the concept was applied in such a broad manner, it seemed to almost become a buzzword easily thrown around in business and government alike. Each speaker seemed to refer to the term a bit differently but as a basic framework there seemed to at least be consensus that PPPs deliver a public service with a private partner. Overall, everyone seemed to agree that PPPs were a good thing, but as Mark Copeland, Senior Policy Advisor to Senator Tammy Duckworth (pictured above) put it, “it is not a silver bullet, it is just another tool in the tool kit.”

As an MBA student that has worked in the public sector for the last twelve years, I take special interest in the intersection of business and politics where PPPs reside. A significant takeaway for me is that there is an unavoidable political dimension to PPPs. As such I found that our day spent on Capitol Hill provided valuable insight and was my favorite experience on both a personal and professional level. The surprise visit by Congressman Meadows was memorable as it is not common to have the opportunity to engage in discourse in such an informal manner with a sitting member of Congress (and the red taxidermy-filled walls pictured below are certainly something I will never forget). 

 

Having recently started a new position in the Department of Energy’s Office of Congressional and Intergovernmental Affairs, I was especially interested in how partisan politics may influence a bipartisan concept such as PPPs from a policy perspective. I felt a pronounced difference between our meetings with members of Republican Mark Meadows staff and Democrat Tammy Duckworth’s staff and it was clear that interpretations of what PPPs are and how they can be best leveraged to benefit the public differ by party lines. I found Kyle Klein’s perspective as the Minority Subcommittee Director for Transportation and Maritime Security on the House Homeland Security Committee to be most interesting, as he was beholden to a policy area rather than the interests of the district or state he was elected to represent. 

This course experience relates very much to my job at the Department of Energy (DOE) where for three years I worked in the Advanced Manufacturing Office supporting projects partnering with industry and academia. I am one of the unusual business school students who feels strongly that Government involvement in the private sector can promote not stifle growth and innovation. Over the course of my MBA however, and ending with this class in particular, I can now see that the public sector isn’t always necessary, that the private sector can be trusted to hold themselves accountable without regulation, and often does have better solutions for public problems. This was an extremely rewarding class that made me realize as jaded as I have become and as frustrating as bureaucracy is, I still believe in a citizen’s right to agency and prefer the inefficiency of democracy to the alternative.

Author Deedi Yang (far left) and her class are pictured above with Congresswoman Debbie Lesko

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Written by Chris Baker, PMBA Class of 2018; Matt Cerce, PMBA Class of 2018; Phillip Cameron, PMBA Class of 2018; Eliza Kanovsky, PMBA Class of 2018

 

It is expected that autonomous vehicles (AV) will boost the global economy by $7 trillion by 2050 ($2 trillion in the US). 1 However, to capture this added value, Original Equipment Manufacturers (OEMs) need to maintain their position at the top of the industry value chain that is poised to make a dramatic shift. Essentially, OEMs need to adapt and selectively claim new touch points with their current and potential consumers. 2 That means, OEMs will have increased mobility to match the required connectivity and changes in vehicular value from 90 percent hardware and 10 percent software to 40 percent hardware, 40 percent software and 20 percent content. 3 Further supporting this shift is the $7 trillion economic growth cited herein. $3.7 trillion is attributed to Consumer Mobility-as-a-Service, $3.0 trillion is attributed to Business Mobility-as-a-Service, and $203 billion can be attributed New Pilotless Vehicles. The OEMs are adapting accordingly to capture this value as each piece of this added value is outside of their standard business model, General Motors (GM) vertically integrated through acquisition of Cruise Automation, a Silicon Value startup4, Ford acquired SAIPS, a company focused on machine learning and computer vision5, and Daimler’s use of car sharing via “Car2Go” and “Mercedes me” to further expand their portfolio and connectivity6.

It is paramount that OEMs continue to adopt an increasingly mobile approach to business so that they maintain a connectedness to the changing demands of the consumer and capture this added value. Consumer interest in AV centers on the ideas of increased safety, convenience and productivity7. That means spending more time with your family, but also gives access to individuals that previously couldn’t get to work such as the elderly and disabled. By staying at the forefront of this cutting-edge technology, OEMs can achieve new levels of success and maintain its position in the industry while increasing the connectedness of all individuals’ interactions with society.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1 Marshall, Aarian. “RoboCars Could Add $7 Trillion to the Global Economy.” June 3, 2017

2 A.T. Kearney. “How Automakers Can Survive the Self-Driving Era.” 2016. A.T. Kearney, Inc

3 A.T. Kearney. “How Automakers Can Survive the Self-Driving Era.” 2016. A.T. Kearney, Inc.

4 Liuima, J. “Impact of Autonomous Vehicles on Auto Industry.” September 23, 2016.

5 Etherington, Darrell. “Ford Acquires SAIPS for Self-Driving Machine Learning and Computer Vision Tech.” August 16, 2016.

6 Daimler Company Website. https://www.daimler.com/products/services/mobility-services/

7 Based on Industry Interview with Daimler Company Representative

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Written by: Andrew Brennan, PMBA Class of 2019, Idan Erez, Global MBA Class of 2019, Samuel Lada, PMBA Class of 2019

 

Advancements in technology continue to pave the way for the implementation of autonomous vehicles. Effective deployment of such technologies could dramatically reduce the number of automotive-related deaths each year.  Continually testing the technology is imperative as it becomes increasingly more complex and sophisticated. According to RAND research, deploying and testing technology by 2020 will accelerate its perfection and potentially save 500,000 American lives over the next 50 years.1

Over the last few years, only 21 states2 and 17 cities3 have enacted legislation addressing the advancement of this technology. At the federal level, the House and Senate are working to pass legislation that would help accelerate the development. Other state regulations, and hesitant policymakers, however, prohibit testing and are only delaying the realization of significant reductions in automotive-related deaths. These states are at a competitive disadvantage as technology companies, automotive manufacturers and other key stakeholders look to deploy AVs and invest in the states open to testing and improving the technology.

 

Machine learning, like the human driver, relies on experience. The more miles traveled today, the faster the technology can develop and the more quickly lives are saved tomorrow. With more than 37,000 automotive-related deaths each year, the time to act is now. Policymakers must work with key stakeholders to develop appropriate legislation that allows for the testing, refinement and advancement of the technology. Waiting for near-perfect technology will delay the realization of economic and societal benefits, and more importantly, result in preventable deaths.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1 Bauman, Melissa, “Why Waiting for Perfect Autonomous Vehicles May Cost Lives”, November 7, 2017, RAND Corporation

2 National Conference of State Legislatures, “Autonomous Vehicles - Self-Driving Vehicles Enacted Legislation”, January 2, 2018

3 Bloomberg Philanthropies – The Aspen Institute, “Is your city getting ready for AVs? This is a guide to who’s doing what, where, and how.”

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