Mobilizing Private Sector Innovation to Advance U.S. Interests Overseas
by Paul Foldi, Vice President, International Development Affairs, PSC
Summary: This article explores how U.S. private sector contractors can serve as essential partners in advancing American foreign policy and development goals. As the Trump Administration proposes a major State Department reorganization, this piece underscores the role of innovation, technical expertise, and regulatory reform in unlocking economic growth and enhancing global partnerships.
On May 29 the Trump Administration introduced its much-awaited proposal for a State Department reorganization, including an organizational chart with a new Under Secretary for Foreign Assistance and Humanitarian Affairs (F). This new role would oversee three pre-existing State Department bureaus — Democracy, Human Rights and Labor (DRL); Population, Refugees and Migration (PRM); and the Office of Foreign Assistance — along with the Office of Global Food Security, that was transferred from USAID.
At the same time, the White House and “Foggy Bottom” (State Department) are also considering how to restructure and redirect U.S. foreign engagement towards economic opportunities —mobilizing capital through existing structures such as the U.S. International Development Finance Corporation or possibly through a new sovereign wealth fund. As these efforts advance, it is imperative to ensure that potential partner nations have transparent and accountable financial, regulatory, and governance structures in place. These systems are essential to unlocking economic growth, attracting private capital, and ensuring American taxpayer dollars are used appropriately. Thanks in large part to years of collaboration with American experts in these fields, many countries already have such systems well-established. However, other crucial economic and strategic partners still need our help, and U.S. private development contractors can play a vital role to help advance these goals.
The world recognizes that the American private sector offers unparalleled ingenuity, innovation, and efficiency capable of advancing U.S. priorities abroad. Private sector contractors serve as force multipliers by responding to overseas needs identified by the U.S. government through the deployment of technical experts who address specific challenges and possess years of regional, cultural, and linguistic expertise that help ensure long-term results. These technical experts also collaborate with host-country partners to address market reforms, prepare and implement infrastructure projects, streamline processes, and optimize resource utilization —ensuring that projects are completed on time and within budget.
Additionally, U.S. contractors offer competitive bid cost savings, greater flexibility in workforce size and duration, and access to specialized skillsets as needed — maximizing the impact of these initiatives. By facilitating the development of key regulatory frameworks, these efforts will lay the foundation for sustained increases in bilateral and multilateral trade. Similarly, infrastructure projects such as transportation networks, energy grids, and digital connectivity not only drive economic growth but also enhance trade capacity and regional integration. Likewise, private-sector enabled economic development offers American businesses new international partners and markets that operate using familiar business and accounting norms — creating more confident and long-lasting business relationships.
As the Department of State takes over humanitarian programs, it is worth noting that targeted development programming complements these efforts as well by providing a pathway out of the cycle of crisis. Studies show significant returns on investment, with every dollar spent on building resilient communities potentially saving up to $3 in future humanitarian response costs. For example, improved agricultural practices, better water and energy management, and community preparedness can significantly reduce reliance on emergency food imports in the future by strengthening local production and trade capacity.
Analogous success stories abound in the global health sector, where American development firms have worked to combat malaria, tuberculosis, HIV/AIDS, and other diseases that respect no borders. Health systems, strengthened by U.S. development experts, played an indispensable role in mitigating recent outbreaks, reducing local mortality, and helping to prevent the spread of diseases.
Development efforts are not a panacea and require significant buy-in from foreign governments and civil society leaders. This work can be especially challenging in war-torn areas or where our competitors, whether nation states or non-state actors, can exert undue influence. As President Trump and his team pursue their goals, I am confident that American development contractors will remain top-tier partners in tackling the global challenges ahead, opening markets, preventing crises, and ensuring greater worldwide prosperity.
Paul Foldi serves as lead for the Council of International Development Companies (CIDC), focused on the U.S. Agency for International Development and the Department of State.
Download PDF: Mobilizing Private Sector Innovation to Advance U.S. Interests