The viral pandemic has stimulated a burst of innovation not seen since the Second World War.
During World War II, Great Britain was starving. Food was in short supply. The British had suffered a humiliating defeat at Dunkirk, forcing a hasty retreat from continental Europe, with many casualties. Germany was winning the war. It was more technologically advanced, having developed its fleet of U-Boats, radio direction finding for the Luftwaffe, the first cruise missiles, and the V-2 rocket, developed at Peenemünde on the North Coast of the Reich.
The U.S. President faced strong currents of isolationism across all sectors of society. For many, the gut-wrenching memories of the absolute horrors suffered in World War I was still fresh. There was little desire for war in the United States.
The British Empire was at stake. Western civilization was at stake. The United States was determined to supply Great Britain. Using the North Atlantic passageway, ships were to be laden with food, ammunition, and other critical supplies.
There were not enough ships to get the job done. One after another unfortunate vessel kept sinking due to deadly torpedo attacks launched from German U-Boats. Many perished in the icy waters of the North Atlantic.
Building ships takes a long time. It requires massive amounts of steel, training, and skills. How could the United States produce the ships needed to keep the North Atlantic supply route open?
Crisis compelled innovation. The U.S. President started to awaken the industrial might of the United States. It was like waking up Rocky Balboa. More resources were focused on building ships. What usually took months was compressed so that at the peak of the war, the United States was launching an average of one giant ship per day, an incredible feat.
Eighteen shipyards were involved in this massive industrial project. Incredibly, the cost of each ship was $2 million, which is only $36 million in today’s money. Each ship had a range of 23,000 miles, a speed of 13.2 miles per hour, and could carry almost 11 tons of cargo. A total of 2,751 ships were planned; 2,710 were built.
Another remarkable feat was the design and manufacturing of the Jeep. The Army drafted 135 companies to begin the design. Only 49 days were given to create the first prototype. The Willys vehicle cost $650 dollars each. Eventually, Willys-Overland and Ford produced 640,000 Jeeps during the war: another incredible feat. Approximately one-third of all Jeep production was given to the Soviet Union and Great Britain.
There were similar stories with transport trucks and aircraft. Without American transportation, Russia would not have been able to push back against the vicious Nazi invaders.
Once the industrial might of the United States was revved up, it was only a question of time before Germany would collapse.
The COVID-19 Crisis Brings Back Government-Directed Industrial Policy
It is rare for the United States government to become so heavily involved in control of manufacturing. From the end of World War II until the COVID-19 crisis, the U.S. government has allowed most innovation and industrial policy to remain in the hands of private enterprise. Driving technological change is left to the market and entrepreneurs. In spite of the promises made by those advocating a planned and government-directed economy, this open capitalist system has produced more wealth than any other in history.
The COVID-19 crisis was sudden, and the U.S. reacted swiftly. The ban of non-U.S. citizens traveling from China was imposed by the U.S. President on Jan. 31st, a week after the first infections were reported. At the time, there were no reported deaths from the virus, and only 10 or fewer persons hospitalized. Hospitalization did not start to increase until a month later. The first death in the United States from COVID-19 occurred on Feb. 26.
Panic led to sloppiness. Projections for the impact of the virus turned out to be grossly exaggerated. There was a fear hospitals would be caught without ventilators, leading to numerous deaths. The governor of New York called for 40,000 ventilators.
The United States started to shift into “war mode.” The Defense Procurement Act was mobilized, and companies such as General Motors and Ford were compelled to begin production of ventilators. There are now more than 10,000 ventilators in the U.S. stockpile, and the excess is being shipped out to Europe and Latin America. Tens of thousands more of these complex machines are being manufactured. Not a single patient in the United States has suffered for lack of a ventilator.
Once again, the industrial power of the United States has been mobilized. The U.S. has or soon will emerge as the world’s leading manufacturer of high-quality ventilators.
There is a similar story in testing for the COVID-19 virus. Very firm leadership from the U.S. government has forced a nationwide mobilization of the entire testing industry. From Jan. 22nd until the end of February, the number of test results in the United States was in the 1-2 range per day. During February, the national leadership put relentless pressure on the testing industry. This caused a burst of innovation. The turnaround time for testing dropped from days to less than 15 minutes. The procedure was simplified.
By Feb. 29, the testing results had jumped from nine to 41, then the next day it was 121, then 282. By March 26, the number passed 1,230 tests.
Incredibly, by April 15th, the testing number was 3,262,564 and the rate of increase was around 136,000 per day. As of April 29th, the rate of increase was 230,442 per day and the total number of test results reported was 6,026,170. Only a few days later, May 5th, the total number of test results reported was 7,544,328, an additional 1.5 million results. Approximately a quarter-million persons or more are being tested each day and the rate continues to increase rapidly.
Leading innovators in the United States are preparing to release a cell phone app that will report testing and immunity results. Quantum Materials of San Marcos, Texas, a company specializing in nanotechnology and secure identification, is releasing the QDX(™) HealthID Immunization Passport.
As of today, the United States has tested more people than any other country in the world and is beginning to export its breakthrough testing equipment and supporting technologies.
It is a remarkable story. It is the story of a powerful industrial nation that can accomplish great things when it decides to. In only a few weeks, the United States has emerged as the world’s leading manufacturer of testing systems and ventilators.
These are the Liberty Ships and Jeeps of today.
Crisis produces innovation. It did in the 1940s, and it is doing it again now.