What does it take for the private sector to be able to support supply contingency?

A crisis is characterised by being faced with a problem we have never encountered before. It is difficult to prepare for the unpredictable. It is often impossible to do it all by yourself. In a crisis, the public sector needs to be able to lean on the private sector for support in solving contingency issues and other aspects of the national defence mission. Many companies also wish to contribute, which was evident during the pandemic, when several companies spontaneously and voluntarily adjusted their production to assist with products that were perceived as being in short supply.

“At the same time, the pandemic also uncovered a number of difficulties. In order to collaborate with companies, central and local authorities need to understand how companies can help and the terms under which they operate. There is currently no obvious business model for the voluntary, spontaneous adjustment of production that many companies made to meet the needs relating to healthcare and the care of the elderly,” says Hertzberg, who is responsible for the strategic efforts relating to public safety and resilience at RISE.

In previous contingency efforts, the national defence mission could be fulfilled by asking companies to produce something new that there was a need for. But things cannot work the same way in the current complicated economy.

“Developing contingency in a connected society network is something completely new. Many more parties need to be involved now, while before it was possible to point at an industry and more or less instruct them to manufacture something. At the same time, contingency can be greatly increased and less likely to go wrong when many parties contribute together,” Hertzberg explains.

Companies require knowledge about the needs that exist

In order to utilise the power of companies in the national defence mission, companies must receive better knowledge of the actual needs that exist. Hertzberg talks about a collaboration in which researchers in a specific supply area identified a number of gaps where they felt that knowledge and research efforts were required in order to strengthen the supply contingency of society in the event of a crisis. RISE subsequently gathered the relevant authorities responsible for the sector and presented its documentation and proposals for projects before formulating a plan for what should be done together with the authorities. Based on this, RISE was able to approach its business network in order to collaborate on drawing up projects and conduct the necessary work to strengthen knowledge and contingency.

“Many local authority and central authority officials that have been tasked with updating the contingency plans after the pandemic now realise just how enormous and difficult this task is,” Hertzberg says. It is possible to list items you need to develop and then plan for those, but how do you prepare for a crisis when you do not yet know what it will consist of? A long list of questions arises: How do we quickly produce all of the materials we cannot imagine that we may run out of in advance? What structures do we need to make decisions in a crisis when we do not yet know what the crisis relates to? What rules apply to companies that rapidly adjust and start to produce something completely new?

A neutral party is required

Local and central authorities may struggle to know which requirements to impose and to understand the conditions needed in companies in order to adjust their business to contribute in a crisis. Such close collaboration with a single company that may be required to build contingency can also be difficult from a competition perspective. It may be necessary to have a party that knows the companies’ terms and that can neutrally bring together the public and private sector to fulfil the national defence mission.

“Such a party exists. That is us, at RISE. When I attend government meetings on contingency and hear about the difficulties of collaborating with the private sector, I often find myself thinking: why don’t you call us? If we don’t have the answer ourselves, we almost certainly know who to talk to. RISE has a clear mission, to support both the private and public sector. We already cover almost all sectors of society through our activities and we have in-depth knowledge of matters such as contingency, resilience and cyber security. We work with all authorities and our innovation work means that we are familiar with all aspects of Swedish industry.

One area in which RISE would like to play a greater part in general contingency planning is the transition to a more sustainable society. Circularity, electrification and the ongoing digitalisation must be included in contingency planning.

“We cannot base future crisis contingency and national defence on the use of diesel generators!,” Hertzberg exclaims. All of society is adjusting in order to manage environmental challenges and the national defence must do the same. But it also allows for opportunities, such as being able to switch to local energy production using wind power, hydrogen/biogas and battery storage. The system could also become more secure, as it is harder to disable many small production units than to disable a few large ones. But it also requires more parties to help out.  And our experience is that the private sector wants to be involved. It is just a case of knowing where to turn and what preparations to make. Structures are needed, particularly when collaborating with smaller companies, so that everyone knows that they can safely help out.