Written with Mahka Moeen
When it comes to fighting a pandemic like Covid-19, most people trust the science. They have less confidence in business to do the right thing. Industry leaders score high in competence on the 2020 Edelman Trust Barometer, but low on ethics.
Companies racing to deliver vaccines might have to confront that perception in the coming weeks. Even if they solve all the associated challenges in record time, public appreciation for their work might not climb.
Many people simply won’t notice. They read news reports of research teams developing vaccines at Pfizer, BioNTech, Moderna and AstraZeneca, and they applaud the power of science. Then they wait for supplies to show up at their local clinics.
Nobody doubts this will happen. The worst-case scenario would be rationing during the initial months, which might cause jostling for position at the front of the line. Yet no one imagines a scenario in which Big Pharma pays for research and development, and then fails to scale up and distribute the resulting products to communities around the world.
The lack of concern about commercialization is a tribute to the power of markets. They work so well that people sometimes assume they are automatic—almost magic. Our research with Sonali Shah at the University of Illinois at Urbana-Champaign shows the opposite. Ending the scientific uncertainty surrounding a medical or technological challenge is just the beginning.
Scaling up the innovation, cutting production costs, managing financial risks, assembling supply chains, overcoming regulatory hurdles and persuading customers are complex tasks that require knowledge generation. Entire ecosystems must emerge, and each step demands scientific rigor.
Unfortunately, casual observers frequently dismiss the work as routine because it happens out of sight. Critics will complain about profit and demand vaccines at low to zero cost, but they overlook the human achievements that make the lifesaving discoveries happen in the first place. Nevermind the reality that any profit these companies may make would represent only a small fraction of the total value created, and that profits are just rewards for market innovation.
Despite the skewed perceptions, at least four business accomplishments will merit celebration as companies confront the Covid crisis.
Harnessing Existing Knowledge
Scientists working on difficult problems do not start from zero, and neither do business leaders. The first step in both domains is to connect new challenges to existing knowledge. As we wrote in a column at the beginning of the pandemic, teams that brought penicillin to the front lines during World War II learned many lessons that still apply in 2020.
Other opportunities abound. Moderna and Pfizer must store their Covid vaccines at -20 degrees Celsius, a challenge in rural areas where suppliers struggle with “last mile” delivery. Pharmaceutical supply chains can overcome the challenge by tapping into existing infrastructures and combine the old with the new. As an example, massive networks of freezers currently used in India to store the polio vaccine at the same temperature could be used to accelerate the dissemination strategy for Covid vaccines.
Sorting through decades of data and finding integration opportunities often requires significant creativity. Many connections are not obvious, but business systems make it happen.
The story of penicillin usually starts with Alexander Fleming, the Scottish biologist who stumbled upon the world’s first antibiotic while working alone in 1928. Startup lore is similar in business. The “garage innovator” narrative has appeal but does not match our research, which shows that markets bring entrepreneurs together across different realms to scale up innovation.
Even complete strangers can collaborate on the same grand challenges. They don’t need to be in the same garage or even the same hemisphere.
The phenomenon happens with every transaction along global supply chains. Buyers give money for raw materials, which become component parts, which become finished products. Complex products like a Covid vaccine might involve thousands of contributors in dozens of countries who never meet. They depend on each other, often without even knowing it.
In the end the victory over Covid will stretch far beyond a single company, industry or region. Dockworkers in Amsterdam will contribute. So will truckers in São Paulo, bankers in London, health insurers in Chicago and nurses in Cairo. In a time of division and political unrest, the cooperation made possible by markets will be amazing to witness.
Matching Supply And Demand
The alignment of supply and demand will create another opportunity to cheer. Shoppers in developed markets rarely worry about the balance. They are shocked when they find empty shelves rather than toilet paper, bottled water and beef at their local grocery stores. Their irritation when that happened in the early weeks of the pandemic shows just how well the system normally works.
Manufacturers and retailers use sophisticated methods to anticipate demand. The trick is knowing in advance how much consumers will want a particular product at a particular place, and delivering it just in time.
Perishable items can spoil within days, so shipments must be precise. Fortunately, things like avocados and bananas are familiar. Distributors have decades of data to guide their decisions. Covid-19 comes with much more uncertainty, but the same principles that guide food distribution apply.
Private sector companies will use real-world experience and machine learning to align supply and demand. Worldwide distribution may not be perfect from the start, but the channels that emerge will nonetheless be impressive.
Changing Hearts And Minds
Companies that introduce new products into untested markets must do more than just deliver supplies and hope for demand. They must find customers. People with something to sell can accomplish this through persuasion or coercion.
As science writer K.C. Cole explains in Slate, the difference is crucial. “Persuasion requires understanding,” she writes. “Coercion requires only power.” Private companies lack police authority, so they tend to lean toward persuasion.
Potential customers will have concerns about the safety of new vaccines, and business leaders will respond with education. Bringing new vaccines from laboratories to local health clinics all over the world will require the work of biologists, chemists, data scientists, attorneys and accountants. But the job also will require contributions from master communicators who can take complex topics and make them understandable to the masses.
People love to hate Big Pharma. Attitudes about big hospitals, big banks and big box retailers are similarly negative. Hollywood contributes by casting corporate CEOs as the go-to movie villain, although some films break the trend and celebrate human enterprise.
In the end, however, leaders from all of these industries will be working feverishly behind the scenes in the coming weeks and months to tackle this big crisis facing humanity.
The science involved should certainly inspire trust in the vaccines, and the market systems that will enable them to reach individuals worldwide are equally worthy of awe.
Mahka Moeen is associate professor of strategy and entrepreneurship at the University of North Carolina’s Kenan-Flagler Business School.