Talent emerges as biggest challenge to Canadian manufacturing competitiveness

CMC's Innovation 360

The emerging global landscape of advanced manufacturing is underpinned by increasingly sophisticated systems architectures, standards and advanced analytics, placing pressure on the post-secondary system to produce the skills the sector relies upon to remain competitive. Canada's future in manufacturing depends on embracing these pillars of advanced manufacturing throughout the value chain, necessitating government policies, programs and regulations to incent industry to adapt.

Those messages were delivered last week at Innovation 360 in Montreal, a one-day conference sponsored by CMC Microsystems which manages Canada's National Design Network for micro- and nanoelectronics. Entitled Integrate to Innovate: Advanced Technology Manufacturing, the event featured a wide range of industrialists, company CEOs and policy experts who debated the risks and opportunities faced by Canada as it seeks to compete in the advanced manufacturing space.

"We're actually at the beginning of something here … a new wave of innovation that will really change the way people live," said Dr Ian McWalter, CMC's president and CEO. "There are lots of spaces to create value and Canada has a significant opportunity."

Inclusive growth vs productivity & profits

Helping to frame discussion was the Innovation Agenda's strong emphasis on talent. Attendees heard that governments are focused on inclusive economic growth and are willing to support manufacturing if it generates jobs, while firms are primarily interested in productivity and profits. With increasing automation, those two perspectives will increasingly come to loggerheads, requiring policies and programs that strategically focus on achieving both objectives.

That places pressure on the education system to instill values and skills at an early age to meet the needs of high-end manufacturing, leaving consumer-oriented products to others. Speakers also endorsed the idea of a new lobby group that caters to the needs of emerging manufacturing firms as opposed to large multinationals active in Canada.

"Who do people want to work for now (and) how do you make it exciting to work in Canada and repatriate Canadians," said Hamid Arabzadeh, president and CEO of Ottawa-based RANOVUS, a developer of semiconductor laser products aimed at next -generation optical interconnect solutions. "We need to work on developing a strong ecosystem and promoting wealth potential."

"Japan and Germany are great at creating large manufacturing firms and they're creative as well," said Najeeb Khalid, president and CEO of Montreal-based Two Photon Research Inc, an engineering and research consulting firm. "Canada doesn't have a good manufacturing model and we don't train the right talent."

Manufacturing remains a potent component of the Canadian economy, contributing $173 billion to Canada's GDP annually and employing 1.7 million Canadians, despite significant declines in recent years.

Deloitte Canada's Stephen Brown, leader of its consumer and industrial products division, said the whole basis for competition is changing with profound implications, particularly for Canada, which has witnessed a long and painful decline in its manufacturing sector until the beginning of a turnaround two years ago.

Talent, technology and teaming

Brown cited talent, technology and teaming as the core principles upon which Canada can be a globally competitive player. He singled out talent as "the number-one driver of manufacturing competitiveness" but added that manufacturing has an image problem.

"Kids are interested in the digital space and don't see a connection to manufacturing. The manufacturing sector has done a poor job to make the link," said Brown. "Germany has a high degree of respect for manufacturing and trade and there's coherence between industry and education."

Deloitte's 2016 Global Manufacturing Competitiveness Index positions Germany as the global leader in the area of talent.

In the area of technology, Brown said predictive analytics and advanced materials are the biggest drivers of the Internet of Things, placing technology at the heart of the vast changes occurring in the manufacturing sector.

Teaming or collaboration is also critical for future competitiveness, and Canadians require "mindset changes" to overcome their traditional insularity.

"We must recognize that talent is global and we need to tap into it. Human-centred design is less product-oriented and more customer and solutions focused," said Brown. "Establishing ecosystems is the only way to keep up with the changes."

Riding the reshoring trend

Rapidly rising wages in China and a growing reshoring trend are creating opportunities in high-wage jurisdictions like Canada, said Shawn Blakney, senior director of global technology and innovation at Toronto's Celestica Inc. He also points to the importance of big data and analytics to advanced manufacturing and envisages connectivity between factories as a key trend that will assist in keeping competition at bay.

"There are 60 connected factory initiatives underway. Canada has to get out of manual, isolated transactional activity," said Blakney. "People still create value but in different ways ... Manufacturing is not going anywhere. Things and infrastructure still need to be built."

For smaller companies, the needs of manufacturers are more granular.

"We need access to the best equipment (and) more collaboration with universities," said Philippe Babin, CEO of Aeponyx. The Trois-Rivières QC-based developer of planar micro optical switch chips recently received a $1.9-million grant from Sustainable Development Technology Canada for a $5.7-million program to commercialize its technology.

Babin added that the well-funded US American Institute for Manufacturing Photonics program sets the standard for what can be accomplished and pointed to the MiQro Innovation Collaborative Center in Sherbrooke QC as an example of a similar Canadian initiative.

CMC's McWalter said lobbying efforts are required to convince the federal government of the importance of advanced manufacturing.

"We're not talking about mass job creation but creating value and being part of global value chains," said McWalter.

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