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The Evolution of Advanced Manufacturing in Canada

There are several factors driving the rapid development of advanced manufacturing in Canada, and it’s worth looking at just a few of them to see why things are happening so quickly, and on such a broad scale.

Industry 4.0 is here

There’s little doubt that Canada is on the precipice of transformational change when it comes to manufacturing. Of course, the country has always had a significant manufacturing sector. But the size of our industrial output has partially hidden the fact that for many decades, the wealth of Canada’s resources prompted a focus on extraction and primary processing, rather than on more complex industrial transformation. From softwood lumber to mineral ores, Canada has a long history of exporting sophisticated manufacturing to other countries. But as we stand on the verge of Industry 4.0 and what has been called the fourth industrial revolution, Canada’s manufacturing sector is embracing growth and change like never before. It’s not just about the technology and processes that are being applied to the production of everything we use and enjoy. It’s an evolution in thinking about what advanced manufacturing means. 

Through our Upskill Canada initiative and along with our industry and education partners, Palette Skills has recently launched several cutting-edge training programs designed to put Canadian workers at the forefront of technological change, and help industry source the talent it needs to compete on a global level. If you are unfamiliar with industry 4.0 and advanced manufacturing, now is the time to learn about the opportunities these industrial and manufacturing trends offer to Canadians, and the world.

What is advanced manufacturing? 

We know that traditional manufacturing was about taking raw materials and transforming them into resources used to make all of the more complex objects we depend on. Generally referred to as primary manufacturing, it’s been a mainstay of the Canadian industrial landscape for years, as we saw above. 

The next step—sometimes called secondary manufacturing—involves processes such as the machining and assembling that are required to make everything from heavy industrial equipment to consumer products. Despite how exacting and complex these processes might be, the strategies and approaches that underlie this kind of traditional manufacturing are not fundamentally different from those that fuelled earlier industrial revolutions. 

So what is different about this new industrial revolution and advanced manufacturing? As it turns out, almost everything. The new fourth industrial revolution brings together the digital, the material, and the biological into a seamless continuity. Advanced manufacturers focus on automation, interconnectivity, machine learning, and the analysis of real time data. At the same time, advanced manufacturing combines the Industrial Internet of Things (IIoT), the cloud, advanced computing, and artificial intelligence.

Reaching a change threshold in Canada

There are several factors driving the rapid development of advanced manufacturing in Canada, and it’s worth looking at just a few of them to see why things are happening so quickly, and on such a broad scale. One of the important factors at play is the environment of connectivity we enjoy. Canada has one of the highest rates of digital connectivity in the world, with rates of internet usage that have shown strong growth. This connectivity became particularly important during the pandemic, when Canadians and Canadian businesses moved online to an unprecedented degree. Partially as a result, industrial and manufacturing leaders quickly sensed the limitations of older and unconnected legacy systems. 

The rapid growth of advanced manufacturing in Canada also owes much to the prevalence of the automotive sector in our manufacturing landscape, which accounts for 10% of manufacturing GDP and as much as 21% of manufacturing trade. Early on, the automotive industry pioneered the use of automation and advanced robotics in car production. The spillover in capacity and skills from such large scale and sophisticated use of automation and robotics has helped make Canada a global leader in the adoption of these key technologies.

Add to this is a focus on advanced materials and additive manufacturing techniques in Canada, with innovations in materials science such as lightweight composites and advanced alloys. These innovations are being deployed in various industries to enhance the performance and durability of products. Additive manufacturing, including 3D printing, has emerged as a transformative technology, particularly because it offers new possibilities for rapid prototyping and customized production.

Another factor that helps set Canada apart when it comes to the adoption of advanced manufacturing systems is that the country boasts the most highly-educated workforce in the Group of Seven industrialized countries. Despite some real challenges, there is a capacity to understand, identify, and implement advanced manufacturing processes that puts the country at the leading edge of industrial transformation.

An ecosystem for advanced manufacturing

One of the key drivers behind Canada’s success in advanced manufacturing is a collaborative approach that brings together industry leaders, scientists, academic researchers as well as policymakers at all levels. Beginning in 2017, the federal government undertook important consultations to understand the future of manufacturing both at home and abroad. This was followed by the announcement of several Economic Strategy Tables designed to coordinate the efforts of government and industry, with a dedicated table for advanced manufacturing. A key result of this work was the creation of several Innovation Superclusters in different parts of the country, including one dedicated to advanced manufacturing in Hamilton, Ontario.

The Hamilton Supercluster is led by NGen, an industry-led nonprofit that helps to identify and coordinate opportunities for collaboration and investment in advanced manufacturing across the country. The organization brings a broad, strategic view to the development of the advanced manufacturing ecosystem, with opportunities for collaboration in everything from ensuring resilient and smart supply chains to building capacity in the application of quantum computing to manufacturing.

NGen is founded on the principle that digital transformation in advanced manufacturing will enrich the lives of Canadians, delivering better products and good jobs while generating the economic growth essential to a better future. It’s exactly the kind of holistic and ecosystem-based approach that the advanced manufacturing sector needs to secure interest and investment from government, industry, and Canadian workers.

The net-zero economy and sustainability

Another element supporting the development of advanced manufacturing in Canada is our widespread and longstanding commitment to sustainability and the environment. This commitment has been secured by ambitious federal legislation aimed at the creation of a net-zero economy by 2050. Policymakers and industry understand that simply phasing out fossil fuels is not nearly enough; instead, report after report into the net-zero future makes the case that technology can and must be used to reduce emissions throughout all sectors of the economy while boosting competitiveness and productivity at the same time. 

Clearly, advanced manufacturing will be a key component for achieving these goals. In 2020 the federal government announced the creation of the Net Zero Accelerator Initiative that identifies industrial transformation as one of three pillars guiding investment under this program. Through this and other policy initiatives, Canada has been actively pursuing green manufacturing initiatives, including the adoption of eco-friendly processes and the integration of renewable energy sources into production facilities.

Challenges ahead: cybersecurity

One of the greatest challenges for building the hyper-connected smart factory will be ensuring that cybersecurity is built into every aspect of operations. A recent report on the state of advanced manufacturing in Canada found that in 2022, 83% of manufacturers experienced some kind of cyber breach or attack. It’s a significant increase from the year before, and shows not only that manufacturing in this country is more connected than ever, but that the level of threat has also evolved. To protect assets and advanced manufacturing capacity, everyone from technicians on the shop floor to the highest levels of management must understand that cybersecurity is not just an add-on, but a core part of doing business.

The same report reveals that attitudes toward investment in advanced manufacturing capacity is changing, with more and more industry leaders making plans for investment. The willingness to invest signals a shift from the rapid and tactical adoption of smart connectivity and manufacturing to cope with the pandemic, to an appreciation of the need for more strategic and long-term investment. Nevertheless, there is still a tendency to look at investment in technology as something separate from what a given business is providing. Going forward, companies will have to develop more integrated ways of seeing how software and technology impact business models. Ultimately, to remain competitive, both industry and the country as a whole must boost R&D spending significantly.

Talent and the skills shortage

While Canada boasts a highly educated workforce, it’s also true that the number of Canadians holding certifications or apprenticeships in key industries such as construction and precision production is falling. An indication of the looming skills gap can be seen in the record number of job vacancies in these and other related Industries in 2022. The impact of this lack of specialized talent is profound, and has serious implications for advanced manufacturing in Canada. Without skilled personnel, manufacturers may lack the capacity to understand and adopt the kinds of sophisticated technologies critical for industry 4.0. Indeed, with a reported 47.4% of businesses in the manufacturing sector struggling to find employees, it’s clear that traditional talent pipelines aren’t enough.

Addressing the need for talent is a necessity. Along with our Upskill Canada partners, Palette Skills is doing its part, launching five unique rapid training programs to get workers ready to step into the world of advanced manufacturing, and help shape the cutting-edge technologies that will define modern manufacturing in Canada. 

Upskill Canada is strategically targeting employers located across the country, and in particular, is engaging with small and medium-sized enterprises (SMEs) in high-growth sectors to better address their skills needs. The focus is on strengthening talent and capacity in key growth sectors such as advanced manufacturing, in addition to digital technology, cybersecurity, agricultural technology, clean tech, and biomanufacturing.

Join Upskill Canada

Upskill Canada is a national talent platform that helps fast-growing companies access the talent they need to compete and succeed globally, while creating new career pathways for workers to rapidly transition into high-demand roles. We want your organization to be a part of this project—and getting involved is easy. Find out more about what we’re doing here!

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