Smaller companies to benefit from Advanced Manufacturing Supercluster

Small Canadian manufacturing companies and technology firms will reap big benefits from the new Advanced Manufacturing Supercluster, says the chief executive leading the initiative.

The Ontario-based supercluster’s projects are being designed to encourage small businesses, local industry networks and local academic and research institutions to participate, says Jayson Myers, CEO of Next Generation Manufacturing Canada (NGen), an industry-led, not-for-profit that runs the supercluster. The supercluster also will deliver programs to build capacity in smaller manufacturers so they can adopt and manage technology, and in small and medium-sized tech companies and startups so they can scale up their technologies for applications in manufacturing.

“We’re trying to marry up the strengths that we have in technology with the strengths and capability that we have in manufacturing,” Myers told RE$EARCH MONEY. “By bringing together and building collaboration between technology and manufacturing, I think we can achieve exponential growth, on both sides.”

Canada’s manufacturing sector represents more than 10% of the country’s total GDP. Manufacturers export more than $354 billion each year, accounting for 68% of all Canada’s merchandise exports.

Myers, a business economist, says the emphasis on expanding capacity – building on the strengths of southern Ontario’s research, tech and manufacturing cluster – reflects Canada’s manufacturing industry. There are 270 manufacturing operations in Canada large enough to employ 500 people or more, compared with 32,000 such operations in the United States. Productivity and investment in technology is higher in the U.S. mainly because bigger economies of scale allow for greater capital investment, he says.

The Advanced Manufacturing Supercluster’s locally delivered programs are based on identifying and strengthening capabilities and funding technology assessments, to enable companies to offer services as a partner in projects and connect them to technology scale-up centres, Myers says. “What we want to do is to try to increase the amount of operating cash that companies are actually investing in innovation.”

The supercluster also plans to invest approximately $200 million in projects aimed at building long-term capacity, he adds. “The projects need to provide a legacy for the ecosystem and they need to be transformative . . . they are funding platforms that will enable companies in the future to come in, co-invest and continue to develop and adopt technology.”

Project funding to flow early next year

It has been more than six months since Innovation, Science and Economic Development Canada (ISED) announced the five, business-led superclusters that will share up to $950 million over five years. Yet none has signed a contribution agreement with ISED or received any funding. Only two of the five superclusters have secured Treasury Board approval for their operating framework.

Myers says he expects the Advanced Manufacturing Supercluster will get Treasury Board approval next week, and that a contribution agreement with ISED will be completed by mid-October. Although the process is taking time, he says that “ISED is quite right that it wants to make sure the money is going to do projects or fund activities that wouldn’t otherwise be done. . . We really want to drive transformative projects and activities around this.”

Once the supercluster has a contribution agreement with ISED, it will take another couple of months to finalize funding agreements with each of the consortia that will lead the initial projects, Myers says. “I’m expecting project money to begin to flow by early 2019.” Projects will involve a variety of advanced technologies, including digital applications, data analytics, microelectronics and sensors, Internet-of-Things devices, artificial intelligence and machine learning, robotics, vision systems, advanced materials, and additive manufacturing.

“We have accomplished a lot already just by introducing people across companies, technology companies to manufacturers in particular,” Myers notes. For example, a potential project focused on digitizing manufacturing processes involves a couple of steel companies, an auto manufacturer, an auto parts firm, wood product companies and food companies “all coming together to take a look at digital technology to transform our manufacturing system.”

The Advanced Manufacturing Supercluster has secured an $800-million commitment from about 140 investing partners. Work has also started on compiling information from Canadian manufacturers and tech companies to create an artificial intelligence-enabled, online “assets database” that can be used to link and accelerate collaboration by supercluster participants.

Creating more business and jobs

Myers, former president and CEO of Canadian Manufacturers & Exporters and founding chair of the Canadian Manufacturing Coalition, says he’s aware of criticism that many federal programs measure success mainly through input-based metrics. The Advanced Manufacturing Supercluster will use “outcome-based,” project-specific and company-specific metrics, he says. These metrics will be aligned with the strategic priorities of accelerating adoption of technology by manufacturers and scaling up innovative technology for manufacturability. “So we’re focusing on investment in equipment and technology and investment in R&D, but that all has to lead to more business and more jobs.”

Along with the leadership provided by the five superclusters, Myers says, “I see our ability to work across sectors, across technologies and across institutions as very innovative and unique . . . It focuses on building industry demand for new technologies rather than pushing technologies into the marketplace.”

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