All of us who live in Canada get caught up in Stanley Cup fever.
To be honest, my favourite sport is soccer, but I also find the strategies involved in hockey to be fascinating.
One thing is clear: teams have to stay focused on what they do best. When they lose sight of their strengths, they falter, every time. If a team is an offensive squad, they stumble when they try to play cautious defense. If a team is strongest on defense, they are vulnerable when they try to run and gun.
I have been thinking about this principle in the context of Canadian manufacturing, asking myself, “What are we best at?” If you haven’t asked that question in your own corporate boardroom – now is the time. Unless you focus on your strengths, you cannot succeed in our rapidly changing environment.
Let’s be brutally honest: we cannot compete against low wages in developing countries; and we cannot compete against fluctuations in currency. These are entirely out of our control.
But we can – and must – compete in excellence and productivity. These are – or should be – our strengths.
These two keys to success are most effective when directly linked together. Canadian advanced manufacturing is at its best – and ready to make a global impact – when research and development (the source of excellence), and core advanced manufacturing (the site of productivity) are located together. This creates a manufacturing sector ready to run in the global economy, one that is continually innovating, producing advanced goods that customers are eager to obtain, and where price ceases to be the sole determining factor in acceptance.
Canadian manufacturing will never succeed if our market is only Canada. This is a market of 35 million people. To put this into perspective, Canada’s population is less than 0.5 per cent of the world’s population of 7.325 billion. We need to focus on being competitive on a global scale, reaching every market in the world.
When R&D and core advanced manufacturing exist side by side in an environment where we can work together with universities and research institutions, we can be competitive and successful in the global marketplace. The benchmark is very high: I believe that when 90 to 95 per cent of your product is exported, you are competitive, globally.
There are examples of these essential ties between R&D and manufacturing in Canada, but they are too rare at this time. Siemens Canada has acquired several companies that have developed this crucial synergy, including RuggedCom Inc. which manufactures Ethernet components in Woodbridge and Concord; the Trench Group – the worldwide leader in designing and manufacturing high voltage instrument transformers for electrical and industrial systems); SMPI, which currently employs more than 330 people in Peterborough; and one of our newest acquisitions, Rolls Royce turbine manufacturing, which Siemens acquired in December.
What these diverse operations have in common is interconnectivity between R&D and advanced manufacturing; they are located near research facilities and universities, and are leveraging those synergies.
Siemens has invested in these companies, and that’s an example investors would do well to follow. In fact, if we foster these synergies, we will create the very best reason to invest in Canadian advanced manufacturing.
A new study by the Brookings Institute and JP Morgan Chase, subtitled “Lessons from Germany”, states that revitalizing the manufacturing sector “will require a renewed commitment to public-private-civic partnerships that deliver on the key driver of industrial competitiveness: a highly trained workforce that can use technology to translate basic and applied research and development to large-scale commercial innovations.”
To survive and thrive, Canadian manufacturers must buy in. We must invest. We must collaborate. We must innovate.
In short, we must focus on what we do best: excellence and productivity.