Boeing Canada injects $4 billion into economy throughout supply chain: study

Boeing Canada's R&D outlays may not be large but the firm has an outsized impact on the Canadian economy, talent and technology development and is a good example of lean manufacturing, concludes a forthcoming study. Titled The Total Economic Footprint of Boeing in Canada, the economic impact study was conducted by Doyletech Corp on behalf of The Boeing Company, Chicago IL, and details its contribution to Canada's status as the world's fifth largest aerospace sector.

The study — which positions Boeing as a lean manufacturer or "agile producer" — found that the subsidiary's contribution to the Canadian economy is $4 billion in direct, indirect and induced impact. It maintains more than 17,500 jobs and boasts higher wages and export ratios than the sectoral averages.

As for its relatively modest $10 million in R&D expenditures this year, the company has an "excellent growth path out of the R&D it does now" and spends another $10 million to develop strong industry-academic ties through several research networks, says Rick Clayton, Doyletech's partner of economic impact and economic development. In addition, the Doyletech study says its $20 million investment in R&D and research networks has a leverage factor of five in terms of "research that would otherwise not be done".

"Five times is conservative. It could be as high as 20. Doyletech will do further study on the leverage effect," says Clayton. "This is research conducted by other companies, post-secondary institutions and governments."

The research networks Boeing has helped to create and/or participate in include the Composites Research Network (Univ of British Columbia), the industry-led, Winnipeg-based Composites Innovation Centre and Canadian Composites Manufacturing R&D Inc (also Winnipeg) which develops and demonstrates advanced composite manufacturing technologies in Canada.

Boeing also has a positive impact on lessening Canada's large trade deficit, particularly in the area of high-tech goods.

"Canada has a huge export problem and Mexico is the big problem, not oil and gas," says Jeffrey Doyle, Doyletech's research manager and partner.

Boeing exports 95% of all products it makes in Canada compared to 80% for the sector as a whole. And spin off firms from the research networks attract additional direct support that benefit Canadian innovation through new products and processes.

As an agile producer, Boeing Canada does not manufacture everything itself. It augments its output with more than 650 contracts with companies in every province except Prince Edward Island.

Clayton points to Moncton NB-based Apex Industries which was awarded a medal of excellence from Boeing and illustrates Agile Producing in action.

"It's not driven by low cost but by innovation and solutions," he says. "Boeing has a supply chain up the line to jet airliners and its Winnipeg plant is a vital part of the whole process, providing body shell parts to its Washington and South Carolina locations."

Clayton says Boeing Canada's activities capture many of the policy thrusts recommended in the Aerospace Advisory Council led by David Emerson (R$, December 6/12) and is "in harmony" with the thematic areas of the forthcoming Innovation Agenda, particularly clusters.

"Innovation is a cultural phenomenon and economic growth in the aerospace sector is highly concentrated in economic clusters like Vancouver, Montreal, Winnipeg and Southern Ontario," says Clayton.

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