How to Improve the Canadian Manufacturing Industry
Insight Canada’s manufacturing industry has developed into careers with advanced tech and robotics. But there’s still plenty of room for improvement.
The outdated notion that manufacturing consists of tedious, assembly-line jobs is dissipating — today’s industry takes advantage of advanced, state-of-the-art tech and equipment, implementing robotics, artificial intelligence, and 3-D printers.
However, the industry is still struggling to shed its former image, despite harnessing those new technologies to leverage people, natural resources, and innovation capacity for economic growth in Canada.
The industry comprises more than 100,000 SMEs and larger suppliers that directly and indirectly contribute to almost a third of all Canadian economic activity. It represents 30 percent of all employment, as well as a large portion of Canada’s technology, services, and natural resources sectors.
However, despite its immense development and growth, there are still numerous challenges facing manufacturing organizations. One of them is the lack of skilled workers, says the Canadian Manufacturing & Exporters (CME), the largest trade and industry association in the country.
“There is no innovation or economic growth without skilled workers, and in Canada we don’t have the skills, or the workers, we need to keep up,” says Dennis Darby, President and CEO of CME. “We need to invest in our people, and give them the skills and tools that will build the productive and innovative economy needed to ensure the sustainability of our communities.”
Today, roughly 40 percent of manufacturers face labour and skills shortages. That number will grow to nearly 60 percent within the next five years, due to an aging workforce.
According to CME, one way to mitigate this skills shortage is to attract more women to the industry, and it has created the Women in Manufacturing initiative. By attracting women to pursue a career in STEM, the manufacturing industry can resolve its skilled worker shortage.
Women are an underrepresented demographic within the industry. Only six percent of employed women in Canada have a job in manufacturing, compared to 13 percent of all men.
This means that there is plenty of potential for growth for the industry through the Women in Manufacturing initiative. Despite women making up almost half of Canada’s labour force, they make up only 28 percent of the manufacturing work force — a number that hasn’t increased in 15 years.
On top of an aging and declining workforce, Canadian manufacturers are dealing with aging technology. Canada’s investment toward new machinery and equipment went down five percent between 2002 and 2014. At the same time, it had increased by almost 60 percent in the United States.
This declining investment in machinery has led to corresponding declines in productivity rates compared to our major international competitors.
“Other countries have created national strategies around technology adoption,” says Darby. “Without strong, coordinated actions for governments and industry, Canada is at risk of falling behind, and becoming too high-cost and not technically advanced enough to compete globally.”
Darby says Canadian manufacturing operations must adopt advanced manufacturing with automation, robotics, and novel processes — which is not an easy thing to do in Canada.
Therefore, CME assessed it is critical for Canadian governments to work in partnership with the industry to help facilitate the transition toward more innovative technologies, which will increase productivity and further foster economic growth.
While NAFTA has helped by increasing the standard of living of participants, reinforcing the industry, and strengthening competitiveness globally, Canadian manufacturers still lack free and fair access to the North American market due to non-tarrif barriers and protectionist policy.
Issues such as government procurements, protection of intellectual property, improved customs processes to speed border transactions, and eliminating uncertainty through reduced bureaucracy, for both people and goods, ranks as the top priorities for Canadian manufacturers.
“CME looks forward to the opportunity to reshape our trade relationship with the U.S. through the modernization of NAFTA,” says Darby. NAFTA needs to be improved to recognize major advances in manufacturing, while creating the conditions for decades of future growth.
“A redrawn NAFTA offers a platform to empower innovation as the driving force of manufacturing and economic growth. It is an opportunity to identify and eliminate some of the challenges that manufacturers are currently facing in the North American market, such as non-tariff barriers and protectionist policy, and to stimulate job creation through the flow of skilled labour.” says Darby.
Despite the manufacturing industry’s significant role in Canada’s economy, it has not reached its full potential, and won’t be able to, without improving on these issues. Further partnerships with the government could resolve the biggest issues in the industry, as manufacturing operations can adopt new technologies, increase the number of skilled workers, especially women in STEM, and gain fair and free access to the North American market.