The Future Is Now

There’s a lot going on right now in the Canadian advanced manufacturing sector. The month began with the Canadian Wind Energy Association annual conference and exhibition. October has also been designated “Manufacturing Month” by Canadian Manufacturers and Exporters. And according to Canadian economists, October – and the remaining months of 2015 – should bring good news for all of us in Canada’s advanced manufacturing industry.

Good news is always welcome, of course – but in the midst of the positives, I still want to sound a note of caution. It’s simply this: we must take nothing for granted. Nothing.

Instead, to quote the Roman poet Horace, “Carpe Diem” – it is time to seize the day.

Let’s look at the CanWEA conference for a moment. Siemens was proud to sponsor this important event, it is Canada’s largest wind energy conference, and I was pleased by this year’s focus: “Cutting-edge technology and innovations that will help solve the industry’s biggest problems and pave the way for a more efficient, effective, and sustainable energy future.”

That’s the kind of thinking that we need right across the Canadian advanced manufacturing sector. But it’s crucial that such intentions are not just rhetoric – “big-picture” statements that are printed in our reports, written in our blogs, and spoken in our projections, but which never make their way into the heart of our businesses.

All of us with a stake in the Canadian manufacturing sector must go beyond words – we must adapt, innovate and accept change as a way of life – or our manufacturing sector as we know it will be dead and gone.

This transition is essential. Continual innovation is now at the very heart of the manufacturing sector, and in my view – the urgency of change is the one thing that will not change.

There is indeed some optimistic news, reflected in a report last month by TD Economist Dina Ignjatovic, who wrote, “Canadian manufacturing sales kicked off the third quarter on a high note, rising by 1.7% in July. This marks the third consecutive gain in manufacturing activity… Overall, after weighing on economic growth during the first half of the year, the manufacturing industry is on track to improve over the remainder of 2015, and should help to lift overall growth.”

Of course, this is positive news. But let’s be clear that this is a short-term report – all it says is that our industry is doing better in the second half of 2015 than it did in the first two quarters.

However, in the Ivey Lawrence Centre report I referred to last month, there is a more somber context: “Since 2000, manufacturing employment has declined by over 500,000 workers…[and] the decline in manufacturing exports has let to an overall decline in exports by Canada. Over the period 2000-2014, overall exports declined by 6.4%, while manufacturing exports declined by 26%.”

So while we may feel reassured by the current uptick in manufacturing, there is clearly much to be done to ensure the recovery and long term viability of our business.

The CME’s theme for Manufacturing Month sums it up in four words: “The Future is Now!”

Yes, it is. And the shape that future will take – the success or the failure it will bring – is entirely dependent on our willingness to change, adapt, and innovate – starting right now.

We have entered an exciting, dynamic, new, world-wide, fourth industrial revolution. A digital transformation is reengineering everything about manufacturing.

However, when I say “we”, I want to stress that unfortunately, our participation is not inevitable. “We” only enter this revolution if and when we opt into the thinking and practices that have sparked it. We have to choose to participate – and to foster the changes that facilitate that participation

The window of opportunity is open

I had the pleasure of participating in two important events in September; both were discussions about the state of Canadian manufacturing.

The first was a panel discussion hosted by Siemens and the Lawrence National Centre for Policy and Management at the Ivey Business School with Linda Hasenfratz, CEO of Linamar, Jayson Myers of Canadian Manufacturers and Exporters, and moderator Paul Boothe, Director of the Lawrence National Centre.

The following day, I gave the keynote address at a CD Howe Institute event. The theme was “Rethinking Canadian Manufacturing”. Both of these events generated lively and thoughtful discussion about the manufacturing landscape in Canada, and we were able to focus on what Canada needs to do to be competitive in our rapidly changing global marketplace.

The discussion at Ivey was sparked by an important new report on the future of Canadian manufacturing, jointly prepared by the Lawrence Centre and Siemens. Click here to download report, ‘The Future of Canadian Manufacturing: Searching for Competitive Advantage’.

The report highlights that the private sector is primarily responsible for growth of Canadian manufacturing, but within a collaborative context. As I said during our panel discussion, we must collaborate with our customers, sometimes even with our competitors, with government entities on all levels, with universities and colleges, and with industry associations.

I was pleased that the report also says Canadian manufacturers need to focus on high value-added, high-quality goods and related services. Today, customers are demanding faster time to market, faster development of innovations. If we are to succeed, we must innovate faster, but we also must bring those innovations to market at record speed.

The report also points out that talent is our most important resource. There is an overwhelming need for a collaborative, innovative approach to training and education, to create a new workforce genuinely prepared to take on the new challenges of advanced manufacturing. Siemens Canada is leading the way in this area, through our Siemens Academy and other initiatives.

In my address at the CD Howe Institute event, I also referred to the same report, which includes some startling insights. It says Canadian “manufacturing was hard hit by the deep and prolonged recession that followed the global financial crisis of 2008-2009. Manufacturing GDP declined by almost 11% over the period from 2000 to 2014, while the rest of the economy grew by 41%.”

During the panel discussion, we agreed that the current challenges are a call to action for all of us. The window of opportunity is open, but will not remain open forever. If we do not act now, it will close, and manufacturing will go elsewhere.

Robert Hardt, Linda Hasenfratz (Linamar) and Jayson Myers (CME)
Paul Boothe (Ivey Lawrence Centre), Robert Hardt, Linda Hasenfratz (Linamar) and Jayson Myers (CME)