Rapid advances in digital technology are revolutionizing how factories operate around the world. A Business Development Bank of Canada (BDC) study has found that 39 percent of Canadian manufacturing businesses have started to implement digital projects. The study also found that, while only three percent of manufacturing SMEs have fully digitized their production, 17 percent are preparing to do so.
The impact of this revolution promises to be remarkable and Canadian manufacturers have a lot of work to do to catch up. The BDC study draws its conclusions from a recent Canada-wide survey of 960 Canadian SME entrepreneurs.
“Our study clearly demonstrates that it pays to embrace the digital shift”, says Pierre Cléroux, Chief Economist and Vice President of Research at BDC. “The Canadian businesses that have been early adopters of digital technologies have increased their productivity, reduced their costs and improved the quality of their products.
“However, 42% of Canadian manufacturing businesses have not yet initiated their digital shift. These businesses will be at a disadvantage against their competitors.”
“We are already witnessing the impact digital transformation is having in Europe and the U.S., where highly automated and flexible factories can now compete against low-cost factories in Asia.”
“In order to survive, Canadian businesses must innovate, because the international competition is on the cutting edge of the digital Revolution,” added Cléroux.
Highlights of the study:
- Businesses in Canada that have adopted the digitization of their production forecast higher growth and enjoy increased productivity and lower operating costs.
- Quebec (45%), Manitoba and Saskatchewan (44%) top the list of provinces that have initiated the digital shift. British Columbia (39%) and Ontario (39%) come in mid-pack, Alberta follows with 35% and the Atlantic provinces trail behind at 32%.
- The overall level of investment in these technologies remains low. The majority of Canadian SMEs have invested less than $100,000 compared with an international average of $261,000.
- The main obstacles to implementation of digital technologies are the lack of a qualified workforce, excessive costs and the difficulty in understanding the benefits.
“The auto industry has strengthened considerably over the past few years. At the same time, digital technologies have become more affordable, user-friendly and robust. This convergence has allowed us to make more investment in the area of digital technologies. This has helped increase our productivity by allowing us to better mine and understand the data which drives our business success,” says AGS’s co-President Joe Loparco.
Ontario’s AGS Automotive Systems is a company using digital technology to gain a competitive edge. AGS is using high tech sensors, monitors, data mining, and plans to use 3D printers. AGS’s head office is in Toronto, with 6 manufacturing facilities in Canada and US.
The full study, Industry 4.0: The New Industrial Revolution – Are Canadian manufacturers ready? can be downloaded here: www.bdc.ca/industrystudy