A Message from Dayna Spiring
Building the Advanced Manufacturing Ecosystem: Staying Competitive in the Industry 4.0 Age
A primary function of economic development agencies is to develop market intelligence around major economic drivers within their communities. This data represents a combination of raw statistics and qualitative information gathered by tracking global trends and communicating with leading companies in key industries. This information is then paired with regional expenses, such as tax rates, electricity costs and wages.
In Winnipeg and Manitoba, advanced manufacturing is one of the sectors proven to power economic growth, supplying high-value products to prime players in packaging, ground transportation, farm machinery and aerospace.
The past decade has given rise to dramatic shifts within the local advanced manufacturing ecosystem, and Economic Development Winnipeg (EDW) has been challenged to better understand the new technologies and catalysts moving the sector forward. To capitalize on Winnipeg’s existing and potential advantages related to advanced manufacturing, a broader appreciation was needed regarding the global impact of technology and innovation on the sector to ensure its continuing competitiveness.
The mobilization of an advanced manufacturing alliance, designed to connect EDW to stakeholders who can supplement and corroborate market intelligence, has been a vital first step in validating manufacturing’s role in the economy and in understanding the profound and pervasive changes stemming from both radical and incremental innovation. New products using next-generation materials are being designed and produced more efficiently than ever before, while advancements in quality are often complemented by reduced environmental impacts.
Manufacturing juggernauts around the world are feeling the pinch from advancements in technology. The United States, for instance—the manufacturing superpower for the past 40 years—is losing ground to China, India and other emerging markets. To curtail this trend, the U.S. has injected mass amounts of cash into collaborative efforts between industry, post-secondary institutions and government bodies to step up its innovation game. Other nations, including Canada, are following suit to varying degrees.
A recent PricewaterhouseCoopers global survey reveals that more and more industrial companies around the world are making Industry 4.0 digital transformation the focus of their business strategies. Globally, these companies plan to double their average level of digitization within five years, from 33 per cent to 72 per cent—and they are investing over $900 billion USD per year to do it.
No single factor drives Industry 4.0, but the inexorable push for profitable growth is a powerful force. Customers are increasingly demanding more for less. Digital technologies offer a way to meet this demand and are starting to expose previously hidden paths to new and potentially lucrative products and services. Unsurprisingly, industry heavyweights have already initiated significant digital transformations, adding pressure on other companies to keep pace. Notably, however, Industry 4.0 also offers companies that cannot compete on cost alone—like Canadian firms—the means to achieve sustained success over the long term.
It goes without saying that innovation is a critical factor in assuring advanced manufacturing companies on the Prairies can continue to compete within the Industry 4.0 ecosystem. However, Canada continues to lag behind other nations in adopting new innovations and technologies in key industry sectors.
In 2014, the Conference Board of Canada compared innovative performance, on a relative basis, between Canada, the provinces and 16 peer nations. Its report, entitled How Canada Performs: Innovation, concludes: “With few exceptions, Canadian companies are rarely at the leading edge of new technology and too often find themselves trailing global leaders. Also, with signs of emerging weakness in public R&D and persistent weaknesses in business R&D, patents, ICT investment, and productivity, Canada’s innovation performance—although improving overall—rests on a precarious foundation.”
The Conference Board proposes several straightforward countermeasures to mitigate this unremarkable ranking: increase innovation-related spending, implement and effectively use technology, create a healthy business climate, and enhance management skills and expertise.
Obvious? Maybe. But definitely easier said than done.
To understand where we need to go from here, we first need to understand what an advanced manufacturing organization looks like. Typically, there are three hallmarks: progressive products incorporating next-generation technologies, advanced processes and technologies, and the deployment of ‘smart’ manufacturing and enterprise systems.
Next, we need to identify how the ecosystem can encourage manufacturers to embrace these cornerstones.
In Winnipeg, a balanced advanced manufacturing ecosystem has formed, and it continues to be enhanced through the addition of new technologies and support structures. The city has already been a centre for composite material technology for more than a decade, led by the Composites Innovation Centre, which has promoted the use of advanced materials by manufacturing companies both locally and nationally. And new advanced manufacturing capabilities and technologies are evident in the additive manufacturing industry, with Precision ADM manufacturing parts for the aerospace and medical device industries.
Winnipeg’s advanced manufacturing ecosystem is being further bolstered by new federal government investments through the National Research Council’s advanced manufacturing program, which includes an 80,000-square-foot, $60-million advanced manufacturing research and applied technology centre.
Underpinned by new skills programs and post-secondary institutions, leading-edge machine learning and artificial intelligence companies like Sightline Innovation further validate that a balanced advanced manufacturing ecosystem is needed to remain competitive in the Industry 4.0 environment. Winnipeg is well-positioned to be a national leader on this front. If actuated, a proposed public/private machine learning cluster called the Enterprise Machine Intelligence and Learning Initiative (EMILI) would solidify this standing across Canada.
EDW’s advanced manufacturing stakeholder alliance has identified a pressing need to build a foundation of ongoing strategic support to leverage past investments, address challenges and seize opportunities to grow and diversify the sector, particularly via small and medium enterprises (SMEs). Consultations conducted with a robust sampling of local advanced manufacturing stakeholders resulted in eight action items designed to address competitive threats and grow the industry:
- Create an industry-wide development strategy for advanced manufacturing
- Focus on the application of innovative manufacturing materials and technologies
- Support SME implementation and the effective use of advanced manufacturing technologies
- Optimize access to federal funding programs
- Optimize benefits pertaining to the National Research Council’s advanced manufacturing program
- Make better use of existing resources
- Focus support on sectors and organizations with proven economic development success
- Work to position Manitoba as a globally recognized region for advanced manufacturing
Manufacturing is a major contributor to Manitoba’s economy. In 2016, shipments of manufactured goods totalling $17.4 billion accounted for 10 per cent of Manitoba’s GDP, and manufacturing exports of $9 billion accounted for 60 per cent of all provincial exports. Employment within the sector stood at 63,600 workers (i.e., 10 per cent of total provincial employment).
Manitoba (and Canada) cannot afford to jeopardize its manufacturing industry. Proposed actions must focus on enhancing the value proposition promoting the province as an advanced manufacturing region. Strong partnerships between government, industry and education, as well as a highly skilled workforce and cutting-edge research, enable local advanced manufacturing firms to grow their market share and increase the flow of inward investment.
If we play our cards right, global recognition of Winnipeg/Manitoba/Canada as an advanced manufacturing hotbed will be a major boost to attracting venture capital and local and international investment.
President & CEO
Economic Development Winnipeg Inc.