As the globe confronts the coronavirus pandemic, one urgent problem is the shortage of key pieces of equipment, including high-quality masks, test kits and—perhaps most important of all—ventilators. It seems hundreds of thousands of lives might be saved, if only manufacturers could quickly ramp up the production of such equipment, perhaps by a factor of 100 or 1,000, within a few weeks.
The United States has done something similar, on a nationwide scale, once before—eight decades ago during the emergency of World War II. At that time, there was a desperate need to radically accelerate the output of items such as ships, tanks and bombers. With decisive government action, including taking a little bit of control from corporations, this effort was hugely successful.
Might there be lessons to be learned now, from that history? Here are five takeaways from the World War II industrial mobilization to help inspire creative thinking by business leaders and policymakers today.
1. If the government wants machines fast, it better promise to buy them
During World War II, manufacturers of key items were guaranteed that national government agencies would purchase all of their output, even if the equipment ultimately wasn't needed. That was a response to the experience of World War I, during which some contractors had been left holding unwanted goods when the conflict ended suddenly in November 1918. During World War II, the technique of guaranteed sales was used to good effect in the machine tools industry. This was the essential sector that supplied the drills, lathes, grinders and other equipment that all sorts of manufacturers needed to turn pieces of metal into finished products. To encourage maximum production of machine tools, the Tools Division of the War Production Board, an emergency civilian coordinating agency, created what it called the pool-order mechanism, guaranteeing purchases of maximum output. As the official history of the Tools Division put it soon after the war, this device “encouraged output at a rate manufacturers could not have afforded otherwise.” The lesson for 2020 is that if we want more ventilators as soon as possible, the national government needs to guarantee it will purchase them.