Once the coronavirus epidemic is behind us and social distancing is not our day-to-day way of life, there will be many detailed analyses and debates about how the pandemic has changed life in America. There will be many new ideas about how to prevent national and regional epidemics. There will be new proposals for universal healthcare. The Congress will be called upon to develop legislation to support and pay for all of these important new initiatives.
Today, it is simply not the time to focus on the changes that should be made. Today the total focus is as it should be on the needs of physicians, nurses, and all of the healthcare workers who have to transport and care for infected individuals. The research efforts to develop treatments and a vaccine to defeat this deadly virus are also critically important.
Generally, in our economy, businesses want to develop new products and services and then find ways to produce them at the lowest possible cost to maximize their profitability. For many years we have succeeded by outsourcing production and becoming a service economy. We develop products and services and then virtually anything that can be made less expensively in other countries, is usually made there. Much of this production has been sent to China, and other countries on the pacific rim where they have much lower labor costs than we do.
As consumers, in the normal times of the pre-pandemic past, we moved merrily along every day with access to anything we needed. Just in time inventory strategies moved goods around the world in a way that we have become used to. We could buy whatever we wanted with very limited delays and at very favorable prices.
The pandemic has got to make us think about this model and how it should change for our future security. For example, the Department of Defense is supported by a domestic industry. We do not make weapon systems abroad to reduce their cost. Are there other products that we rely on that should be made in America more often than they are today?
There are probably a number of industries that should have a stronger manufacturing base in the US to protect our supply chains in difficult times. Just last week I realized that the battery in my laptop was no longer charging. I called my computer support company and spoke with my tech, Scott. We checked out the problem over the phone and on line and learned that the battery needed to be replaced. I asked Scott to order the part, and he said, “Well, all of the components and almost all of the laptops are made in China and we can’t get any confirmations on orders at this time. We are currently waiting a month for parts for computer repairs. There are simply no parts available anywhere in the country. We expect this to get back closer to normal in about a month.”
Computers are a basic tool of every industry. Does it make any sense not to have a domestic capability to manufacture at least some of them and their components?
Every day we hear that our nurses and doctors do not have the personal protection equipment (PPE) they need to protect themselves as they treat their patients who have been stricken with COVID 19. They valiantly reuse PPE that should be discarded after each patient encounter for the entire day at their own peril to help others. Many of them have been infected and sadly some have died likely due to the shortages of these products. Many PPE items and ventilators that we need today are made in China. Many of the drugs that are prescribed in America or their raw materials come from China. At the same time, the large majority of big Pharma are US companies.
When the Pandemic is largely behind us it will be time to analyze where products that could become critically important in difficult times are made. When the greatest percentage of them are made in China or other countries, we need to think about what percentage of them really should be made in our country as a part of the normally available product mix. Sourcing of products that are largely manufactured abroad should be carefully studied because where they are manufactured could become a matter of national security.
I am not suggesting that we completely retreat from offshore manufacturing, rather we need to determine what products should have some scalable manufacturing capability in the United States to bridge the need for specific products when supply lines are disrupted by epidemics, national disasters or governmental disruptions.