Public-private partnerships pose opportunity for DPI and national digital ID initiatives

Public-private partnerships (PPPs) may play a critical role in the development of a national digital identity infrastructure around the world. Digital transformation initiatives and the rollout of digital public infrastructure (DPI) in Africa, Europe, and Southeast Asia show a government-led push for a shift to digital services, but involving the private sector might be key to accessing the resources needed to establish a comprehensive DPI.

The UN’s Sustainable Development Goals (SDG) are a set of aims for 2030 designed for developing nations to achieve equitable economic, social, and environmental sustainability. While DPI is tied to many of these goals, and SDG 16.9 explicitly sets out to provide a legal digital identity for all, public finance is stretched thin between these objectives, climate change obligations and other serious humanitarian concerns across the Global South and other regions. Public finance alone will likely not be able to fund a robust DPI for the nations that could benefit most from it.

PPPs will be essential in investing in certain digital ID projects, according to Totm Technologies. The private-public partnership model would allow for private companies to invest in and manage parts of digital infrastructure projects while governments oversee regulations and policy.

Public-private partnerships are defined by Wikipedia as “a long-term arrangement between a government and private sector institutions.” The International Monetary Fund describes PPPs as consisting of “the deployment of private sector capital and, sometimes, public sector capital to improve public services or the management of public sector assets,” and differentiates them from “privatization,” in which public property becomes privately-owned.

With such an approach, governments would be able explore an array of financing options and end up with a combination of grants from development banks or international organizations, as well as venture capital and private investment.

Aside from leveraging a wider array of financial resources, including the private sector can add a valuable perspective to national digital identity infrastructures. Public policy nonprofit Centre for Strategic and International Studies (CSIS) published a report highlighting the value of engaging the private sector. Private companies understand consumer and market opportunities, while governments operate on a policy-level for its citizens. By fostering collaboration, all stakeholders can benefit.

This model also helps offset capital expenditure and reduces operating costs of a national digital identity infrastructure, in turn supporting countries in prioritizing services for citizens that generate revenue.

In some cases, contracts for biometric PPPs can be quite lucrative, with one biometric ID card project in the Democratic Republic of Congo valued at $428 million. PPPs are also one of the driving forces behind the growth in the reusable digital identity market, according to Liminal, which projects it to reach $266.5 billion by 2027. Private companies have an incentive to facilitate these government-led projects.

Other collaborations play a significant role in the development of DPI. For instance, the 50-in-5  campaign was launched at the end of 2023 and will see 50 countries in the Global South develop a secure, inclusive, interoperable DPI in the next five years.

Article Topics

digital identity  |  digital public infrastructure  |  investment  |  national ID  |  public-private partnerships