Someone recently asked me, “What do you do in your spare time?” Two passions take up most of my out-of-office hours: sports – especially soccer – and reading about history, technology and business publications.
The latter may sound a bit obsessive, but I enjoy learning about the latest innovations in the business world, especially in advanced manufacturing. Change is inevitable, and necessary, and I want to be sure to chart the changes, and even anticipate them.
In my last blog, I cited a new study by the Brookings Institute and JP Morgan Chase, subtitled “Lessons from Germany”. This paper highlighted some of the best practices that have originated in the highly successful advanced manufacturing sector in Germany, and are now having an impact here in North America.
The overall take-away from this study is clear: partnerships will be the key to success in our industry – partnerships between the private sector, government at all levels, R&D and educational institutions.
The introduction to this study immediately captured my attention, because it suggests that the North American manufacturing sector, often written off by “experts”, can in fact be a solution to economic woes. The authors write, “Business, civic, and political leaders… are rediscovering manufacturing as a source of good jobs and lasting economic growth.”
That will not be a surprise to any of us in the industry. But it’s also not a statement we can take for granted – because industry as we know it today will never be that “source of good jobs and lasting economic growth.” We will only see these positive results if we take up the urgent challenge to innovate, to adapt, to embrace partnerships, to establish ourselves in a global marketplace.
As things stand today, Canadian advanced manufacturing is not ready for the future. Why? My weekend reading has included a study by Deloitte that makes it clear Canadian manufacturing is underinvesting in research and development – which almost guarantees that we are ill-prepared for the rapidly changing environment we are in. The study found that the investment in R&D by Canadian private-sector firms totals one percent of our Gross Domestic Product; that’s less than half of comparable investment levels in the United States. That same study found that more than a third of Canadian businesses believe they are investing more than their peers – but they aren’t. They are investing less.
The countries that are building innovative, forward-looking advanced manufacturing sectors – like Germany, with its emphasis on Industry 4.0 – are not afraid to invest boldly in R&D, and to nurture synergies.
I also recommend a new study by The Boston Consulting Group, “Industry 4.0, the future of productivity and growth in manufacturing industries”, which supports the argument that our future as advanced manufacturers relies on excellence and productivity, powered by ongoing connections between manufacturers, R&D and educational institutions. “Connectivity and interaction among parts, machines and humans will make production systems as much as 30 percent faster and 25 percent more efficient, and elevate mass customization to new levels.”
This study stresses the need for partnerships right across this collaborative spectrum.
Canada needs to connect these dots and create advanced manufacturing hubs, where stakeholders come together to form environments that provide the support needed to turn innovation into commercialization.
I spend many out-of-office hours reading reports and books. But the most important things happen back in my office – where I implement these absolutely crucial principles and practices. At Siemens – and at companies throughout the Canadian advanced manufacturing industry – if we’re willing to do what it takes, we can truly be “a source of lasting economic growth.”