CME sees innovation as key driver for a competitive manufacturing sector

Guest Contributor
February 22, 2005

Canada’s largest manufacturers association is calling for less red tape, more public assistance, specialized skills training and lower taxes to assist in its bid to help make Canada the most prosperous country in the Americas by 2020. In its latest vision document, the Canadian Manufacturers and Exporters (CME) association serves up a dizzying array of recommendations for all levels of government and sectors of society.

The vision document was unveiled earlier this month at CME’s national summit in Ottawa, scheduled in the immediate run-up to the federal Budget in an effort to advocate key policy changes and funding initiatives. The event featured a major policy speech by Industry minister David Emerson, who alluded to a new plan for commercialization, a major overhaul of the Technology Partnerships Canada program and a new program dedicated to major aerospace and automotive projects (see below).

The vision document’s recommendations are being positioned to counter what the CME sees as worrying economic trends in Canada. Among OECD countries, Canada has dropped from the fifth most prosperous 15 years ago to ninth today, while a per capita income gap with the US has widened to 22%.

“We must continue to grow the high-value, high-paying activities that are part of the modern business of manufacturing today,” states the report. “Innovation will be key in driving higher value and productivity improvements. International trade and business partnerships will be an integral part of business development. New investments will be required in a more knowledge-intensive workplace.”


The CME cites capital formation, knowledge capture, market control, access to markets and a high-value production base as key determinants to a robust manufacturing sector augmented by seven critical success factors. In order to enhance innovation, the association asserts that industry must embrace “rapid and flexible systems of product and process innovation” as well as greater collaboration between firms in the areas of research, design and product development. Public support for innovation, it contends, “must be driven more by market opportunities for commercial application and less by research agendas or the goal of pushing technology into the marketplace”.

The CME contends that international business development would benefit from a more integrated framework between Canada and the US and a “preventative maintenance” approach to trade disputes. It also says a strategy is required to maximize benefit from rapidly emerging markets such as China, India, Russia and Brazil.

The 20/20 vision document has plenty of advice for all levels of government, but it saves it most substantial recommendations for Ottawa. Key among them are:

* increased support for investments in new technology, continuous improvement efforts of smaller manufacturers;

* tax credits for investments in new technologies;

* tying R&D funding more effectively to the commercial needs of industry;

* increase investment incentives and improvements to the focus, flexibility and accessibility of programs linked to innovation, technology implementation, skills enhancement and environmental sustainability; and,

* accelerated depreciation allowances for machinery, equipment and automated processes.

The Manufacturing 20/20 report and accompanying background documents are the result of a major consultation exercise — CME claims it was the most extensive private sector consultation in the history of Canadian industry — involving 64 discussion sessions, 36 community roundtables and more than 2,700 participants.


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