Canadian Manufacturing Needs a Technology Upgrade

Humanity always has been fascinated with the future. Early man watched the stars. Jules Verne and H.G. Wells excited readers with their unique and sometimes amazingly accurate visions of the future. Even mouse-doodler Walt Disney became obsessed with the future when the end of his life drew near.

To call the future of manufacturing in this country murky may be an overstatement, but it’s hard to call it rosy too. Since the 1960s, manufacturing—as stated as a percentage of the nation’s GDP—has fallen steeply.

Our peak hit unsurprisingly toward the end of World War II when manufacturing represented a whopping 29 percent of GDP. Today the number is closer to 13 percent. The number of Canadians working in a manufacturing job also has dropped.

Canada’s manufacturing sector has a problem. Whether you call it a skills gap or a skills mismatch, the truth is the industry is having difficulty attracting young, bright minds at all levels.

So how can this trend be changed? The same way society has changed during many other eras: through the use of technology.

Last year the Science, Technology, and Innovation Council (STIC) issued a report stating that Canada is becoming a laggard in technology, innovation, and R&D. Created by the Harper government in 2007, STIC is an 18-member council of Canadian scientists and business leaders who advise the government on science and technology policies.

Among the findings of this body was that investment and use of new technology are areas in which Canada lags the most. Not enough investment is occurring in IT or venture capitalism. Canadian businesses are investing far less in R&D and new technology compared to other countries, placing it 25th among 41 reviewed nations, according to the STIC report.

This adoption lag, defined as the time between a company’s first awareness of a new technology and the adoption of that technology on the shop floor, is costing Canadian businesses money and Canadian workers jobs.

The National Research Council (NRC) of Canada advises businesses to take seven steps before implementing new technology:

1. Conduct an environmental scan.

2. Develop a corporate technology strategy.

3. Benchmark.

4. Analyze organizational capabilities, capacity, and gaps.

5. Define key performance indicators (KPIs).

6. Monitor KPIs.

7. Adopt technology.

It’s interesting to note that the NRC recommends adopting new technology only after the first six steps have been taken. The problem arises if a company stumbles on any of the first steps.

However, the benefits of adding new technology can have a dramatic effect on any business. The NRC points to lower cost of maintaining and holding inventory; production of faster, more competitive quotes; shorter production lead-times; lower production costs; and the creation of more full-time jobs.

Ask a few young prospects if the solution to the sector’s skills problem can be found in technology adoption. You probably will have to text it to them, though.