Mask production and lying dormant potential: How incentives can help

A look at pedestrian zones, cafés, bars and restaurants in the summer of 2022 could lead one to believe that the coronavirus has long since disappeared. In large parts of Germany, life is once again as it was before the pandemic. Unfortunately, this also applies to politics, which has not drawn the right conclusions from the experience of 2020 and is just as ill-prepared for future pandemics as it the case with Corona.

Specifically, the issue is the missed opportunity for policymakers to ensure the preservation of businesses that produce medical equipment. It is true that Germany reacted quickly to the shortage of protective masks after the start of the Corona pandemic and created its own production lines. But in the meantime, many of these companies that produced masks are either insolvent or have converted their production again. How can we ensure that we will be able to act quickly in the future when it comes to the production of medical protective equipment?

Incentives and auctions could help to reconcile Germany’s national interests with the companies’ profit motives. After all, it would be quite sufficient to have just a handful of companies in a position to spontaneously switch their production if the worst came to the worst. This could be achieved by subsidized production of masks, which would have to be purchased at auction in advance. In return, companies would undertake to invest preemptively in the necessary machinery and staff to be able to respond and deliver directly in the event of a crisis.

How this game-theoretical model works in detail is explained by Dr. Sebastian Moritz, Managing Partner of our client, the consultancy TWS Partners, in the article linked here in the Tagesspiegel Background in the Health & E-Health section.

With its topic section “Health & E-Health”, Tagesspiegel Background offers an innovative range of information and expert briefing on health policy as well as on what is probably the biggest topic of the future in this area, e-health. TWS Partners specializes in making game theory useful for business decisions. Since the end of 2018, WORDUP has been responsible for all press relations for TWS Partners in Germany.