‘Coopetition’: New way to cooperate and compete

The world is a little over the halfway mark toward the 2030 deadline for achieving the United Nation’s (UN) 17 Sustainable Development Goals (SDGs). Progress so far is nowhere near where it needs to be. Just 12 percent of the targets for which data exist are on track, almost one-half are off-track, and more than one-third are either failing to advance or worse still, regressing below the baseline set in 2015.

Coming off of the hottest summer on record in the northern hemisphere, looking at the continued degradation of our global commons, and facing fragile economic growth forecasts, it is clear that governments need to do a better job working together to make progress on the SDGs. Indeed, this summer, UN Secretary General António Guterres said, “Today’s global challenges, from the climate crisis to growing inequality and the governance of new technology, can only be resolved through dialogue and cooperation.”

Yet the very ingredient the secretary general rightfully identifies as needed—cooperation—seems out of reach. Geopolitical competition and conflict are on the rise, with the International Monetary Fund warning of the growing risk of fragmentation—something that could cost the global economy as much as 7 percent over the long term. More troubling, the UN said, last year saw the highest number of violent conflicts since World War II.

Today’s climate of confrontation is, to say the least, not conducive to improving the well-being of people or the planet—the main objectives of the SDGs. Yet, despite this reality, there is a way to make progress on the global goals. Because a recipe for effective cooperation amidst intense competition exists. One only has to look to the private sector, where examples of competitors finding ways to cooperate can be found on grocery shelves, in smartphones, and within mailboxes.

One instance of business rivals working together has to do with the challenge of plastic bottles, which represent a large climate footprint for beverage companies because the polyethylene terephthalate used to make them is derived from petroleum and natural gas. The production and disposal of this plastic accounts for 30 percent of some companies’ carbon footprint. In response, Coke, Dr Pepper, and Pepsi—fierce rivals—came together in 2015 and pledged to source a quarter of their plastic packaging from recycled materials by 2025.

This type of cooperation among business competitors —even those waging “cola wars”—is not unique. The World Economic Forum’s own First Movers Coalition is a group of over 85 companies, including competitors like Airbus and Boeing, that are aligning on ways to create new markets for green technology.

The practice of rivals cooperating to achieve similar objectives is such an integral part of corporate strategy that it is known as “coopetition.” Companies like DHL and United Parcel Service who compete for customers have cooperated in delivering packages in the United States because the gains to each of them working together outweigh the drawbacks. In the tech sector, Apple and Samsung have cooperated, with Apple purchasing screens from Samsung for its iPhones and Samsung offering iTunes on its devices.

If companies can find a way to make “coopetition” work, so can countries—even those that are geopolitical competitors.

Over the summer, we saw a promising sign of geopolitical “coopetition” gaining strength, when China and the United States returned to climate talks after a long hiatus. Both Beijing and Washington indicated they aimed to collaborate on climate action regardless of other disagreements. But this “coopetition” is still too fragile.

What makes “coopetition” attractive, both in business and global affairs, is that it acknowledges that each side can benefit from cooperation while continuing to compete over market share or geopolitical interests. And the private sector has shown that maintaining competition is beneficial—it leads to innovation, lower prices, and even improved public goods. One key reason solar energy went from being $1 per kilowatt-hour 15 years ago to 4 cents per kWh today is that companies competed against each other to make cheaper panels (government policies and incentives also played an important role).

“Coopetition” needs to be ingrained in the playbook of every leader, CEO, or public official. We have seen how “coopetition” benefits companies and customers, now governments should show how it benefits countries and citizens. The Jakarta Post/Asia News Network

The Philippine Daily Inquirer is a member of the Asia News Network, an alliance of 22 media titles in the region.

Børge Brende is World Economic Forum’s president. Børge Brende