Table of contents

Private sector involvement: defining, motivating and including all types of actors

The 'private sector' is far from being a homogenous entity. There are many dimensions to the private sector and there is a variety of reasons to bring private partners into urban regeneration – as much as there are many types of involvement.

The private sector includes commercial enterprises (local businessmen, non-personal companies, house owners and real estate developers), the 'third sector' (not-for-profit organisations) and also residents and consumers. We have particularly focused on commercial enterprises

The motivation to be involved by those in the commercial sector can be based on expected gains (e.g. information gain or a contract from the public sector) and on the expectation to improve one’s competitiveness or one’s living/business environment. We identified five types of resources which can be offered in an urban regeneration process: physical settings, human resources, entrepreneurial opportunities, public relations and stable operating conditions. The motivation of the public sector on the other hand ranges from bringing in additional resources to increasing the effectiveness of the scheme.

Instruments to involve the private sector include formal partnership arrangements, network structures, private lending, direct investment, participation in decision-making structures, and corporate social responsibility (sponsorship). It can also be the case that the job of running and organising the development process itself is delegated to a private company acting as an intermediary organisation. The functions fulfilled by private sector companies can be to provide employment, to sustain businesses, to carry out physical improvement works, and to deliver services.

In sum then, it became clear to us that local partnerships come in various forms. Public-private partnerships are but one, if extremely important, form of private sector involvement. Many private businesses lie at the heart of the development of a neighbourhood as they have an essential interest in the welfare of the neighbourhood and its residents, because they depend on localised factors such as customers, clients, workforce and service provision in the neighbourhood. We found that this self-interest is a huge potential. It can be capitalised on in multi-dimensional processoriented regeneration schemes.