Advanced mfg is booming in Ontario, says Innovation Economy Council
Incubator coalition releases whitepaper detailing current state of advanced manufacturing in Canada's industrial heartland
The Innovation Economy Council (IEC) has released its second white paper: Factory Forward: How Advanced Manufacturing is Retooling Ontario’s Industrial Heartland.
The Innovation Economy Council is a coalition of tech-sector incubators dedicated to shaping Canada’s industrial innovation policy. Led by MaRS, Ontario Centres of Excellence, Communitech, DMZ (Ryerson University), Invest Ottawa, CCRM (Centre for Commercialization of Regenerative Medicine), Spark Centre, CENGN and NGen, the IEC says it works with active members of Canada’s innovation ecosystem to identify areas for in-depth analysis and offer timely insights to increase Canadian productivity and growth.
The IEC’s report examines some of the successes among advanced technology manufacturing in Ontario and offers potential approaches to drive further innovation, collaboration, investment and commercialization. Despite the nearly 250,000 manufacturing jobs lost following the 2008 recession, Canada’s GDP in manufacturing continues to rise, and the report asserts that Ontario is a manufacturing powerhouse — one in 10 of the province’s jobs are in manufacturing.
Economic growth in Canada
The whitepaper notes that a clutch of advanced manufacturing sectors are contributing an outsized share of factory job creation and economic growth in Canada. These sectors — identified as advanced because they invest more in R&D and employ more high-skilled workers than other manufacturers — accounted for half of the roughly 45,000 factory jobs created in Ontario since 2010, according to the IEC.
However, advanced manufacturing is not exclusively about new technology. The IEC says advanced manufacturing has overtaken and transformed existing industries — particularly as technology becomes infused into almost every product or service Canadians consume. As an example, the report says that Canada has all the tools to be a major player in the technology side of the automotive business — which is increasingly important as cars become more technologically complex, AI-powered and autonomous machines.
Pent-up manufacturing capacity
The IEC argues Ontario has plenty of pent-up manufacturing capacity, both established manufacturers who are looking for new products to build at scale, and advanced manufacturers who can out-innovate and out-think global competitors on complex and highly technical products.
The white paper explores how Canada’s manufacturing community can bring the aforementioned two streams together to build new manufacturing power.
Advanced manufacturing by the numbers
- More than one in 10 of Ontario’s jobs are in manufacturing.
- Advanced manufacturing accounted for half of the more than 45,000 factory jobs created in Ontario since 2010.
- Over the past decade employment has grown 98% in agricultural chemicals, 45% in aerospace, 42% in industrial machinery, 22% in auto parts, 17% in electronic components, 17% in medical equipment, and 14% motor vehicles. This compares to an average of 7% job growth across all manufacturing industries.
- The auto industry generates $20-billion a year in GDP, directly employing 125,000 people and driving billions of dollars in exports.
- The Greater Toronto area now has the highest concentration of AI startups in the world. And nearly 80,000 people in the region work for 1,750 knowledge-based businesses, including multinationals such as Microsoft, Oracle, SAP, IBM and EMC-Dell.
– According to IEC modeling.
The IEC says innovation leaders need to raise the profile of new potential manufacturing champions and celebrate established firms.
It is also critical to nurture today’s manufacturing rather than yesterday’s, according to the report. As a greater share of manufacturing jobs in Canada shift to design and prototyping that means growing the pool of post-secondary educated talent and providing incentives for companies to invest in research, development and innovation.
Lastly, the IEC notes that shifting geopolitics and COVID-19 are driving supply chains to be more local. Canadian firms need to increase their collaboration with each other to increase their supply resiliency and to leverage complementary competencies to further cement our position as a global manufacturing leader.