A Post Crisis, Economic Recovery and Crisis Mitigation Proposal


In my last post, I argued that Supply Chains increased the spread of the COVID-19 Pandemic. I proposed the idea of regional centers for manufacturing to minimize sprawling supply chains and to encourage local innovation to meet different needs based on those regions. I think I need to take this to the next step. Localizing ability to respond to crises. Obviously there are huge benefits to scaling manufacturing capability during times of stability and crisis alike. The cost of making a single N95 mask is much lower whenever you know you’re going to crank out another 100,000 masks over the next few weeks. Because the cost of all that capital equipment is spread across all the masks.

However, because of the centralization of these manufacturing centers, in many cases in China or South East Asia, this creates a supply issue if the entire world needs the exact same thing. This requires a strong central buyer to compete on the market to buy additional supplies. In the US that should be the Federal Government. Sadly, this hasn’t happened and in fact, the President is playing favorites with states and providing medical supplies. This is hugely problematic. However, there’s an opportunity here to protect states in the future from an outbreak and to rebuild the economy.

I propose that states, let’s go with Oregon, cause I live there, creates regional innovation and manufacturing centers (OIMC – Oregon Innovation and Manufacturing Center). These OIMC should be positioned at least one per country, but carefully to ensure that if there’s a critical event, such as a Cascade Subduction Event, the region will have an OIMC on each side of the event. In the Portland Metro Area we’d want one in Easter Portland and one in Beaverton or Hillsboro. Furthermore, these should be located in such a way that if a tsunami hits the coast, an OIMC can double as a shelter and emergency production center.

The goal of the OIMC at the surface would be to manufacture critical items during a crisis. For example an OIMC would have the inventory to build ventilators, N95 masks, disease test kits, materials to stop flooding, fight fires, or whatever major crisis emergency items that might impact that specific region. For example, Roseburg might have more items to fight forest fires than the Portland region, because of the types of crises that impact that region. The list of items should be defined by a combination of FEMA and that state’s emergency and health agency.

However, we can’t just have an OIMC doing this sort of work. There aren’t enough crises (thankfully), to warrant establishing a dozen or more of these locations. That’s why these aren’t just Crisis Manufacturing Centers, these are innovation centers. They become a low cost rental space for businesses to start. For example, you want to open a welding shop but can’t afford the cost of equipment, hiring people, managing books, and the cost of a place to rent? No problem, the OIMC will offer business loans and services to manage HR, your books, sales, and provide a no cost then low cost rental location. You have trouble hiring people with the right skills? No problem the OIMC will offer year round training sessions on a variety of tools. It will have to because it will need to have all the skills to make those critical items.

Wait a minute, won’t the OIMC be competing with other companies? Yes. However, whenever we are not in crisis the OIMC can become flex capacity that companies can rent out until they have the capital they need to expand their business. So, during normal time the State of Oregon is not competing with medical suppliers. They are place that offers services instead. This will allow the OIMC to essentially pay for itself.

Furthermore, these centers offer an opportunity for the region to develop and build technologies they need to support themselves. Given the cost of some farming equipment, the OIMC could elect to manufacture some lower cost farming equipment in really hard hit regions. There are some blueprints at Open Source Ecology which can provide an idea of what we could build, if we need these OIMC to provide a lot of capability during a short time.

Holistically, I think this approach can provide flexible manufacturing capability during a major crisis that will allow states and counties to meet their need when the entire country is stressed at once. It will provide regional support during times of emergencies, which seem to occur more and more frequently, and it can provide an opportunity to rebuild communities by offering skills and spaces to start new businesses. Everyone is going to be hit hard by this pandemic. We need a serious plan for addressing this.

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