Advanced Manufacturing: Leveraging tech to customize manufacturing

What is advanced manufacturing and what does it mean for Canada?

Advanced manufacturing combines manufacturing and new technology to harness innovative production methods and redefine business models. Canada has a very diversified manufacturing sector that is spread across the country, but the greatest concentration is in Southern Ontario and Quebec. We also have a really well-developed technology sector, whether it is focused on the Internet of Things (IoT), artificial intelligence (AI), additive manufacturing applications, materials or robotics. The real opportunity for Canada is to bring together its diversified manufacturing and our well developed technology sectors.

“We have to speed up the adoption of technology in manufacturing to become more competitive, to help companies grow, and to develop new products and innovative processes.”

Canada currently has 270 manufacturing operations that are big enough to employ 500 people, whereas the US has over 33,000. All of the numbers around US manufacturing in terms of productivity, performance and investment are a reflection of its size, volume and low-cost production technology. While Canadian manufacturers are small, they are more profitable, on average, than American manufacturers. We have a lot of small and mid-sized companies that are highly customized and more specialized than the large-volume producers in the US. Canada needs to develop the ability to individualize and specialize products through technology. So, our advanced manufacturing opportunity is to leverage technology to scale up customization. It will drive greater value for customers and generate more revenue, as a result. Our biggest challenge is to scale up and retain companies in Canada.

What must be done to best position Canada’s manufacturing industry for success in the future economy, and how does NGen fit into the solution?

NGen was formed even before the Advanced Manufacturing Supercluster because Canadian manufacturers and technology companies saw a need to work together and position Canada as a leader in advanced manufacturing. In order to do that, we have to do two things. Firstly, we have to speed up the adoption of technology in manufacturing to become more competitive, to help companies grow, and to develop new products and innovative processes. Secondly, we have to scale up the technologies we are developing in Canada to be applied in manufacturing. We are not investing in technology companies just to come up with new technologies, our ultimate goal is to apply those technologies in manufacturing.

“Canada needs to develop the ability to individualize and specialize products through technology. So, our advanced manufacturing opportunity is to leverage technology to scale up customization.”

Moreover, NGen is focusing on collaborative projects. Manufacturers realize that there are lots of technologies out there but they do not have access to them. Sometimes companies with a specific technology need to work together with other companies to provide the overall solution that manufacturers are looking for. So, NGen wants to connect the dots in the Canadian manufacturing sector.

What approach should be taken with investments into the Canadian manufacturing industry and the technologies revolutionizing it?

Canada has put a lot of effort and many billions of dollars into research, which has created vibrant start-up communities across the country. The next step is to help these companies grow, and that depends on their ability to attract customers, find financing and manage growth. All the projects in our supercluster need to be applied; they need to show commercial potential. R&D may be involved if it is part of the effort to take a technology, a prototype or a process into full production. So, we prioritize later-stage technology and manufacturing readiness. None of the superclusters can provide direct funding to universities or research institutions, so the federal government has taken a very different approach with the Supercluster Initiative.

“I see the innovation value chain as a train; the customers using the technology drive it and are followed by services, manufacturing, technology, research and education.”

I see the innovation value chain as a train; the customers using the technology drive it and are followed by services, manufacturing, technology, research and education. All the train cars are not currently connected in the Canadian train and some cars are missing. So, the supercluster is trying to fill those gaps.

How will advanced manufacturing affect employment in Canada?

People say that all this automation, robotics and AI is going to replace jobs, but automation in the past few decades has resulted in record low unemployment levels in Canada. I do agree that there is a skills mismatch when it comes to the jobs available in the economy and the people displaced by automation. It is challenging to ensure that people find high paying and high value jobs, and keep upgrading their skills.

Advanced technologies are displacing the direct jobs on the shop floor – we do not have a lot of people doing manual jobs in manufacturing. But, we are seeing employment growth in the supporting services or indirect jobs. These include engineering, data science, coding, logistics services, software development and mid-level technology.

“We are seeing employment growth in the supporting services or indirect jobs. These include engineering, data science, coding, logistics services, software development and mid-level technology.”

It could very well be a bumpy ride if we do not have the education, the training and the retraining to ensure that people can take advantage of the employment opportunities advanced manufacturing will bring. Right now, manufacturers cannot find people for high paying positions from trades to technical jobs. One of the issues is that the technologies are changing so rapidly that it is very difficult to keep up. Our schools can do some of the fundamental education, but a lot of this is going to depend on the ability of people to understand and work with technology. Industry-based education, experiential learning and practical learning in companies are becoming increasingly important. A lot of colleges and universities are working on integrating theoretical and practical education. We need to speed this up and deinstitutionalize education by bringing it to businesses and workplaces.

What is your vision for Canada’s future economy?

I am very optimistic. If we can coordinate, build collaboration and identify and fill the gaps in our education ecosystem, there are tremendous opportunities that lie ahead. But the window is short; other countries are doing exactly the same thing, so we need to be ahead of the curve. If we went back a hundred years, we probably would be having the same discussions about how manufacturing was revolutionizing the economy and replacing agriculture. The economy will evolve. AI and machine learning are not going displace all jobs and people will be using these new capabilities as tools to perhaps do different things.

“The biggest challenge in the future economy will not be the vision, the technology or the longevity of companies; it will be the people. Will our people have the capability to work with the technologies?”

In 2050, I see a different economy that is very high tech and digitally driven. The differentiation between manufacturing, technology and services as a business model might disappear altogether. Companies will not be focusing on products but on solutions which will involve technology, services and products. The biggest challenge in the future economy will not be the vision, the technology or the longevity of companies; it will be the people. Will our people have the capability to work with the technologies? If we can develop a highly skilled workforce that knows how to manage technology, then we are positioning Canada as a leader in the future. In this vein, I would urge Canada’s youth to develop the ability to understand and manage technology so that we can build a strong manufacturing sector and create great jobs for everyone.