Please enjoy this republication of a The Canadian Business Journal article.
As COVID-19 sustains its grip on our lives and global economies, the blistering devastation of it all is taking center stage. Comparisons to World War II have been made by politicians around the globe, with world leaders scrambling to find a benchmark for the impact it has had on our lives, and the imprint it will leave in our history books.
Albeit a grim comparison, the analogy should offer some hope, as well. The dark cloud of WWII (1939-1945) had a silver lining in the form of massive economic expansion. The economies of North America, Europe and Japan witnessed unprecedented and unanticipated levels of economic growth and global influence. European GDP tripled between the end of the war and 2000. Family incomes in the United States, fueled by substantial increases in employment, doubled in just 30 years. From the devastation of war emerged significant advancements in science, technology and industry.
Looking at how the world rebounded after WWII, and observing how the seeds of that growth moved into our collective field of vision during the terrible war years, we can use past as prologue to understand and anticipate the opportunities that we may encounter in the months and years ahead.
Penicillin was discovered in 1928, but scientists, hopeful of the potential of the antibiotic, struggled to find enough interest to begin human trials. Regulations created important and protective barriers to marketing new drugs with the parallel effect of slowing availability. As the drug slowly moved through the regulatory process to commercialization, WWII presented an urgent need. Before the war, infections caused by battle wounds were more likely to cause death in soldiers than the wounds themselves. To address this immediate need to reduce casualties, the U.S. government made penicillin production a priority.
Regulation was short cut. Creativity in the modes of development was encouraged. Production was accelerated. Lives were saved during the war. This short-circuiting of the process, and the consequential innovation in production, were designed to answer the immediate wartime need. The gains were preserved; immediately after the war, penicillin became widely accessible for the general public.
Similarly, pre-war experimentation in producing aircraft with pressurized cabins was accelerated when innovation was pressed resulting in the introduction of the B-29 Superfortress in 1944. The direct result — after some adoption and acceptance time — was postwar commercial passenger planes.
Processes, inventions and technologies on a path to production and market availability prior to WWII were subject to massive acceleration by the crisis. The acceleration to market was a benefit to civilians that could not have happened otherwise.
Detours and Pivots
Heading into WWII, the auto industry was ramping up and manufacturing millions of consumer vehicles; then in 1942, the U.S. government froze nonessential car production and dropped production to only a couple hundred cars during the entire war. Instead, GM, Ford and others pivoted to building fuselages, engines, tanks, trucks, airplanes, torpedoes and guns.
As demand for non-automobile production reverted to pre-war levels, automakers returned to the auto industry, but brought with them the influences of WWII production.
Post-war cars introduced design elements inspired by warplanes and featured weapon-like tail fins and immodest amounts of chrome. But perhaps the most enduring product of this era was the introduction of the civilian Jeep. The Jeep, along with other modern SUV predecessors, shifted into mass production with advancements made to then-costly 4WD technology accelerated by wartime necessity. Today, the SUV is the world’s largest automotive segment.
Wartime innovations inspired post-war advances that might not have been imagined without the necessities created by WWII. These advances have enhanced industry, society and culture permanently.
Labor Market Upheaval
The socioeconomics of the labor pool were upended in the throes of WWII. Necessity overcame resistance and a massive shift across all areas of industry and the military led to women being recruited into the workforce. The effect abated right after the war but never returned to pre-war levels. In many ways, Rosie the Riveter left the door open and established a trend of women in the workforce, doing work that was not available or acceptable prior to the war — and that continues today.
In each case, and countless others, innovation, creativity and necessity, driven by the social and economic reality of WWII changed the landscape. And here we are, 75 years later, still benefiting from advancements that were accelerated by the war.
Mining the Silver Lining
Regulatory processes and barriers to progress are being flattened under the pressure on healthcare to deliver solutions. The drivers and interests behind systems of regulation and control have been consolidated to just one: the need to contain the pandemic. With this new focus, processes that would have otherwise taken years can take mere days or hours. It is easy to imagine that the acceleration of development, testing and distribution of vaccines, life-saving equipment, and home diagnosis and monitoring capabilities, might be catapulted into mainstream by the current crisis. These temporary advances might have some staying power.
Similarly, contact tracing technologies are now being reexamined and repurposed to help track and control the spread of the virus. This technology might become more widely adopted after COVID-19 retooling if it can be deployed in globalized supply chains to connect diverse suppliers, guard against the risk of counterfeit products, and satisfy the growing demand for source visibility in goods ranging from drugs to diamonds.
Resistance to remote work arrangements may have just dissolved. The far-reaching effects for employees and employers, by exponential expansion of access to markets and talent, and the potential that consolidation of innovation to geographies and institutions, may have been overcome.
The current concentration of talent in various, mostly coastal, hubs may shift and diffuse. The workforce may be fundamentally transformed, pushing companies to transform operations and distribution models. The consequences on labor markets will spill into education, healthcare and childcare just as it will commercial and residential real estate. It is hard to imagine that the impact will be anything less than the post-WWII labor shift and we might anticipate a similar economic retooling.
None of the WWII innovations examined here were initiated or discovered during the war. In every case, crisis was an accelerator for change that was already under way. Of particular note is that pre-war resistance to change and the braking effect of excessive regulatory processes evaporated when necessity took the lead.
Progress spurred by WWII may well have been inevitable, but the shortened maturation or development cycle was remarkable. We see the very same phenomenon with COVID-19 innovations: All of the component parts were in place before the spread of the novel coronavirus, but the pandemic has fueled innovation and the acceleration the market entry of new products, new technologies and new ways of moving and thinking in the market.
Ready for the Rebound
As Jack Welch famously said, ‘If the rate of change on the outside exceeds the rate of change on the inside, the end is near’. The world is in the midst of an extraordinary change. In 1942, Automaker Packard shifted to wartime production, but never successfully pivoted back. They shuttered in the 1950s. Not all post-pandemic comeback stories will have happy endings. The parallel we can draw between these two crises is that when companies lean into change brought on by disruption, and transform along with the paradigms around them, they are better equipped to thrive.
As we begin the recovery leg of this crisis, companies should proactively analyze the impacts that COVID-19 will have on a recurring basis, refining and retooling as conditions evolve. That includes taking note of what changed and what effect the changes had on the key drivers and mechanisms in the business. The ability to identify changes that produce real post-crisis use cases, and to pivot to incorporate and leverage these advances and innovations, will result in great benefits to the companies that make and execute on the right strategic decisions.
Together with a readiness to adapt, it is important to stay alert to competitors and keep an ear to the ground for complementary product and service providers to keep pace with the rapid acceleration that COVID-19 will generate. This prolonged period of rolling changes will be a new challenge but has the potential to bear plenty of fruit.