Matt Weller Founder, Naviga Supply Chain Related links: Parliamentary Address regarding Supply Chain, SME Manufacturing and Productivity Parliament recommendation #2: Realign investment and build executional knowledge Parliament recommendation #3: Create an active, connected ecosystem for SME Manufacturers On April 30th I appeared before parliament to discuss Canada’s supply chain challenges relative to our small and medium manufacturers, and our national productivity. I brought forward several concerns and with those, three recommendations. In this post I will talk about the first recommendation which was that we create a national reindustrialization strategy, and I will expand on the other two recommendations in separate posts. From my remarks at Parliament:
“While industry must inform and lead the solutions to these challenges, a national reindustrialization strategy is needed to coordinate and prioritize those efforts and design a supply chain and business environment that is favourable to productivity. We need to ensure that we can understand, identify, and retain critical manufacturing resources, skills, capacity and capabilities and their complex interactions at the detailed levels which will be needed for both industry and consumers in the much longer term. Taking a whole system thinking approach, we can balance the needs of our economic system and avoid short term benefits to any particular sector or industry at the long-term expense of our overall productivity and economic stability. This is critical for us to survive the societal, economic, and geopolitical challenges that lie ahead, and the recent pandemic has already demonstrated our vulnerability.” Our current environment - lots of effort, no gain. In our economic environment, we have an assortment of efforts at various levels. Industry groups, industry itself, special interest groups, consumers, academia, private and government investment all exist with a disconnected or isolated view of the macro challenges at a system-wide level. They all work to solve the individual problems they were created to respond to, but they do not work to understand the integration of all these efforts collaboratively, at the interconnected macro level. In basic terms, national economic systems are “closed loop” meaning that any benefit gained in one localized area, must necessarily come at the cost of another. Without an overarching alignment or strategy, the result is a net loss to productivity and our standard of living. We are seeing this as our current reality. Our future needs demand a new approach Our future, regardless of if you subscribe to the ideas of a green economy or not, will absolutely require a massive industrial build out – at a magnitude we’ve never seen in this country - simply to retain our current standard of living, never mind improve on it. Yet currently, we are losing the knowledge, capacity and capability required to process resources and produce physical goods. The solution is to create a national strategy for reindustrialization. Such a strategy can: 1) determine what our most pressing needs will be in the future in terms of internal process capability and capacity, to preserve our way of life, national security, and sovereignty, 2) identify all players in the economic system (the organizations I listed previously) and inventory their capabilities and resources, 3) map out which groups align with the needs of the next 50 years and incentivize them to work collaboratively to fill the gaps, and 4) measure progress based on productivity and economic growth once our economic engines are driving towards the same collective goals, instead of working against each other. To be clear, there’s a couple of things such a national strategy cannot be. It cannot be partisan or hinged on a 4 -year election cycle. The needed solutions will take years to build and execute, and we need to commit to them in the longer term. It also cannot be a set of governmental decrees, or regulatory mandates. It cannot be command and control, and this is not something that can be solved with taxes and regulations. It must be voluntary, with collaboration among industry players. Government is necessary to give industry the macro “system wide” insights and incentives that individual industry players on their own can never have, but it’s industry itself that must solve industry’s problems. Which is far easier to do when there is a unified consensus of what needs to be worked on and some sense of how to prioritize the collaborative effort. SME Manufacturers at the core, but benefits for all While my focus behind this suggestion is based on our small and medium manufacturers, there’s benefit far beyond those companies. We have an emerging intangibles/innovation tech sector that is trying to find its place in Canada. Some argue that the future is the intangibles, and that tangibles (physical goods) are no longer economic drivers. The reality is that as long as there are human beings, physical products will be required, and we can either make them competitively, or be at the mercy of someone else for them. But I will argue that the physical goods economy cannot competitively or efficiently survive without the enablement that our intangibles sector can provide. They will be needed to respond to any reindustrialization strategy, to build out in ways that are competitive, efficient, clean, and robust, and enable those buildouts to iterate and ideate faster than ever before. Building a resilient economic engine both for us and for competitive export opportunities. We need our small and medium manufacturers to produce, our innovators can help them to produce better, and faster. In my view, you cannot have one, without the other. Can it be done? Without a doubt, what I am suggesting is a massive undertaking rife with multi-faceted complexities. But it is not impossible. In fact, the United States is already several years into their reindustrialization for all the same reasons, and they are not doing it for our benefit. Canada deserves to have an assured future based on its own capabilities and richness of resources. It needs to determine how to produce for itself, and not simply hope to “rent” its future needs from other nations – especially in these times of rapid de-globalization. Comments are closed.
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