True Value Co. heard from its more than 4,500 affiliated hardware stores last month that hand sanitizer was flying off the shelves, leaving store staff with none for themselves.
At the company’s factory in Cary, Ill., which makes cleaning products and paint, John Vanderpool, the company’s divisional vice president of paint, recalled asking, “What can we do to help here?” After a tip from his wife, a pharmacist, he consulted with the Food and Drug Administration, then huddled with his maintenance team and engineers over two weekends to retool two paint-filling lines to produce jugs of FDA-approved hand sanitizer.
Starting this week they are being shipped free to stores for their own use. The product will go on sale to the public eventually.
The changeover at True Value’s factory from paint to hand sanitizer is one of countless private-sector initiatives that represent an underappreciated asset in Americans’ fight against the coronavirus. It is a 21st-century version of the “Arsenal of Democracy,” the mobilization of industrial might that helped win World War II, only this time to make personal protective equipment, ventilators, tests and vaccines instead of uniforms, ammunition, tanks and bombers.
And where that arsenal was orchestrated by the federal government, this one has been largely the spontaneous, uncoordinated effort of businesses, entrepreneurs and innovators driven as much by the urge to contribute as by future profit.
They run the gamut from individuals using 3-D printers to turn out N95 masks and academic labs repurposing themselves into coronavirus test centers to General Motors Co. teaming up with Ventec Life Systems to make ventilators. Hundreds of treatments and vaccines for Covid-19 are in development around the world.
Moderna Inc., a Cambridge, Mass., biotech company, has already begun human trials on a vaccine, barely two months after the virus’s genome was sequenced. At the start of the crisis, tests had to be sent to distant labs, and took days to deliver results. Since then medical-device companies have rolled out tests with progressively faster turnaround times, including one by Abbott Laboratories that can deliver results in under 15 minutes in a doctor’s office.
Private ingenuity will be key in helping the economy reopen, which, given signs the pandemic is peaking, could come in the next few months. Apple Inc. and Alphabet Inc.’s Google are developing software that would alert users if they came in contact with someone infected with the virus. Major employers from meatpackers to theme-park operators and automobile manufacturers are redesigning their operations to integrate social distancing and temperature checks.
Joel Mokyr, an economic historian at Northwestern University, said national crises such as wars and pandemics historically generate a hive of entrepreneurial innovation, from the late 18th-century search in England for a treatment for smallpox to a German drive in the run-up to World War I to use atmospheric nitrogen for explosives.
“We have this huge reservoir of creative energy spread around the economy. When you have an event like this all of a sudden, everyone says, ‘Oh wow let’s look at this problem—let’s see what I can do to solve it.’ ”
This time, innovators are exploiting tools and methods that didn’t exist in previous crises. In mid-March, Lennon Rodgers, director of the Grainger Engineering Design Innovation Lab at the University of Wisconsin in Madison, fielded a plea from the university’s hospital to make 1,000 face shields.
He often gets requests from around the campus to manufacture random items and “initially, I didn’t take it too seriously,” he recalled. But after his wife, an anesthesiologist, told him the shields were indispensable for dealing with highly infectious patients, he scoured hardware and craft stores for parts.
He teamed up with Delve, a local design firm, and Midwest Prototyping, a contract manufacturer, to design their own “Badger Shield,” named after the University of Wisconsin mascot. They expected to use 3-D printers, then concluded that wouldn’t achieve the necessary scale. They uploaded the design to their website along with the necessary parts for anyone to download. A few days later Ford Motor Co. did, and, with tweaks of its own, began turning out face shields for Detroit-area hospitals.
Mr. Rodgers and Justin Boutilier, an engineering professor; Rebecca Alcock, a graduate student; and Auyon Siddiq, a professor at the University of California, Los Angeles, have built a “pop-up supply chain” around the design. Hospitals that need shields and factories offering to make them fill out forms on their website, then are matched by an algorithm. The website also connects manufacturers to suppliers of the necessary material. More than 300 manufacturers have submitted production plans totaling two million shields a day, well in excess of what hospitals have demanded.
These remain minuscule enterprises by wartime standards. The U.S. was already furiously rearming when Pearl Harbor pushed it to a war footing. Soon Liberty freight ships were being built in as little as five days at shipyards operated by Henry J. Kaiser, and Liberator bombers were flying off the assembly line at Ford’s gargantuan Willow Run manufacturing complex.
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Washington’s hand was everywhere. Agencies such as the War Production Board and the U.S. Maritime Commission decided what should be produced and which companies would get contracts, which generally had a guaranteed profit margin. It barred the production of civilian products like passenger cars to free up capacity for military trucks and tanks. It also coordinated production with allies Britain and Canada.
Political leaders have cited the wartime analogy repeatedly since the current pandemic began. “This is going to be our Pearl Harbor moment,” the U.S. surgeon general, Jerome Adams, warned on April 5.
Yet compared with wartime, the federal government has thus far mostly played a supporting role in mobilizing economic resources to combat the pandemic. Most of the acquisition and production of vital supplies has fallen to states and health-care providers working with private suppliers and intermediaries.
In recent weeks, the federal government has stepped up its involvement, such as ordering masks and ventilators to distribute to states. But states have complained about having to compete with each other and the federal government for private supplies, and that when federal supplies come, such as of tests, it is far too little.
President Trump has invoked the Defense Production Act, a Korean War-era law allowing the federal government to commandeer private production, but mostly to facilitate efforts that were already under way.
Washington’s secondary role reflects the different nature of the crisis, said Hugh Rockoff, a Rutgers University economist who has studied wartime economies. National defense has always has been Washington’s responsibility, whereas the U.S. health-care system is mostly private, and public health is primarily the responsibility of state and local governments.
It also reflects a shift in philosophy, said Mark Wilson, a historian at the University of North Carolina at Charlotte who has studied business in wartime. Government leaders had spent years before Pearl Harbor planning for war, and the Great Depression and New Deal nurtured a “philosophy of government that included a lot of enthusiasm for regulation, government and public enterprise.”
In recent decades, though, the federal government has preferred to rely on the private market “for what you don’t deem to be your core capacities.” That may be more efficient in normal times, but less able to meet the public’s needs in emergencies, he said.
Another difference is that World War II strained the economy’s capacity as military-age men were drafted and business struggled to fill both civilian and military demand. By contrast, huge swaths of the economy are now idle because of government-mandated closures or lack of demand. That leaves some businesses with spare capacity that can be devoted to the pandemic.
On March 19, Kepner Scott Shoe Co., a specialty children’s shoe manufacturer with 18 employees based in Orwigsburg, Pa., was forced to halt production when the governor ordered all nonessential businesses to close.
“My family aren’t the type to sit around and watch things happen,” said Audrey Zimmerman, who manages the company her great-grandfather bought in the 1960s. She learned of shortages of protective masks from friends and relatives who are health-care workers. “We knew we could source fabric. We had our seamstresses who could sew these masks. They have years of experience so a new pattern, whether it’s a shoe or a mask, is easy to do.”
Ms. Zimmerman obtained a waiver from the state to reopen, with eight employees. The cotton masks are donated to health-care workers to wear over their N95 respirators, extending their lifespan. “It’s kind of strange not to see shoes coming through production. I’m happy we could step in and help as quickly as we did.”
After the Pennsylvania governor recommended everyone wear masks in public, Kepner Scott began selling theirs to the public online, which “will help us keep the lights on and also continue to make donations of masks.”
The virus won’t ultimately be tamed until a therapy or vaccine is available, and that has become the intense focus of the pharmaceutical industry. More than 200 experimental drug treatments, repurposed drugs and vaccines for the coronavirus are in development world-wide, according to Jefferies, an investment bank.
Michael Yee, a biotech analyst at Jefferies, said the biotechnology industry has raised record amounts of capital in recent years through venture financing, initial and follow-on public offerings. “Biotech innovation over the last 10 to 20 years…has allowed us to come up with early potentially promising therapies in weeks, not years.”
There are big caveats to these efforts. First, relative to wartime, the amounts of money involved are puny. Viruses, unlike hostile armies, can’t be defeated with sheer brute force. Mr. Yee estimates less than $500 million has been committed to early-stage drug research on Covid-19 thus far. That is about half the average cost of bringing a new drug all the way to market. Most of the $2 trillion-plus CARES Act approved by Congress last month addresses the economic blow from the pandemic, such as with loans and unemployment insurance.
Secondly, they may not be enough. Fast as manufacturers are trying to ramp up production of personal protective equipment and ventilators, they are lagging behind the pandemic, which is expected to peak soon. By May, domestic N95 mask production will still be less than a third of estimated demand. A vaccine, even at today’s unprecedented pace of development, may not be available for 12 to 18 months.
Mr. Mokyr, the economic historian, said these efforts still serve a valuable purpose. Each pandemic, he said, adds to our store of knowledge and tools, enhancing our response to the next. The human influenza virus was discovered in 1933, 15 years after the 1918 pandemic. It took mere weeks to isolate the virus that causes Covid-19.
When the next pathogen comes along “we’ll have the tools, the labs, the microscopes, the computers, and we will be ready. This is a war of knowledge against evolution. I’m betting on knowledge.”
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