DARBY: Ontario can be at the forefront of Industry 4.0

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Robotic arms weld car parts alongside human workers. Digital factories live in the cloud. Software that predicts when machines will fail or require additional maintenance.

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Although these technologies seem straight out of a science fiction story, they are now a reality for many manufacturers.

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To be competitive, manufacturers around the world are taking advantage of the fourth industrial revolution, or Industry 4.0, which is bringing advanced technologies like the Internet of Things (IoT), robotics, cloud computing, 3D printing, and big data analytics into manufacturing become.

In Ontario, however, manufacturers have been slow to adapt, especially compared to our competitors south of the border – and that’s a problem. Between 2004 and 2021, investment in machinery and equipment (M&E) in the US manufacturing sector increased by 34% overall. In contrast, over the same period, manufacturing M&E investment fell 1.4% in Canada and 14.8% in Ontario.

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In robotics in particular, the trends are even clearer. According to the International Federation of Robotics, 3.5 million industrial robots were installed worldwide in 2021. Of all the new robots deployed in 2021, half (268,195 units) were installed in China. The closest competitors were Japan (+47,182 units), the United States (+34,987 units) and South Korea (+31,083 units). These countries have also been leaders in attracting Organization for Economic Co-operation and Development (OECD) manufacturing investment over the past 15 years.

Meanwhile, despite its strong presence in the high-tech automotive, pharmaceutical and aerospace sectors, Canada installed just 4,257 new industrial robots, less than 1% of the global total.

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Given these statistics, one could easily conclude that we need to spend billions on incentives to get companies to buy more robots. But the broader answer lies deeper. Success not only depends on how big a country is or how much money it can invest in industrial support programs. What countries like Japan and South Korea did years ago was set up a long-term industrial plan and foster deep civil society networks to patiently and tirelessly implement it, regardless of political affiliation.

In order to be competitive in our modern economy, we have to go down this path.

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We know it works. Just look at the historic line of investments that followed Ontario’s Driving Prosperity automobile plan. With supply chain gaps exposed by the pandemic, the constraints of climate change and the challenge to our competitiveness posed by the US Inflation Reduction Act, governments have started to put in place the right stimulus and define a broader industrial strategy. Canadian manufacturers and exporters recently partnered with FedDev Ontario to launch a technology adoption support program for small and medium-sized businesses in southern Ontario. The Ontario government has introduced a comprehensive Ontario Made Investment Tax Credit that is available to eligible businesses across the province. Both measures reduce the costs for business expansion and machine purchases.

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The real test will be to sustain these achievements over time and across all manufacturing sub-sectors. The recent launch of the highly anticipated Ontario Advanced Manufacturing Council provides a unique opportunity for industry, government and civil society to integrate the various incentives and programs into a more coherent plan to grow our businesses.

This work is important. Our ability to offer workers a future depends on it.

— Dennis Darby is President and CEO of Canadian Manufacturers & Exporters, Canada’s largest trade and industry association and the voice of manufacturing and global business in Canada.