Representatives from the manufacturing sectors in the Quinte, Northumberland, and Peterborough regions gather for a conference at the Travelodge in Belleville Wednesday, October 24/2018.(Photo/John Spitters/Quinte News)
Pierre Cleroux, Vice-President, Research and Chief Economist, BDC (Business Development Bank). (Photo/John Spitters/Quinte News)
“We are in the early stages of the fifth industrial revolution.” That’s what the Vice-President and Chief Economist of BDC told manufacturers at a regional conference in Belleville Wednesday.
Pierre Cleroux compared the technological changes underway now to the changes that came to manufacturers with electrification in 1870.
Cleroux urged manufacturing leaders to embrace technological change, saying the only constant was change and that failure to invest in digital technology would likely lead to business failure over time.
In a brisk presentation lasting the better part of an hour the economist dismissed talk of a looming recession.
Cleroux said the American economy had been very strong and although now levelling off said it would remain robust for the next few years.
He credited President Trump with providing a strong economic stimulus by implementing tax reforms.
While not as strong as the American economy, Cleroux said Canada’s economy would continue to grow at about 2% a year for the foreseeable future.
“Now is the time to seriously research and then invest in digital technology to boost productivity in your manufacturing processes. Software and sensors can make you money by saving you money. Sensors placed throughout your product lines with data being analyzed by appropriate software can tell you know when the parts you are making aren’t up to quality standards and tell you when machinery problems first begin. Businesspeople that use digital technology often avoid expensive downtime and very expensive product line shutdowns.”
“You should invest in technology that your customers can get involved in too. One of our clients is a builder of custom kitchens. People walk in and use software to design their own kitchen. The business takes it from there but the customer can follow the construction process from the comfort of their own home and instantly intervene to make changes as the project moves along. People love this kind of thing.”
Cleroux stressed that many manufacturers were not comfortable with investing significant amounts of money into software, instead preferring to invest even larger amounts of money in hardware such as machinery.
“You need to change your perception about what will move your business forward and so do financial institutions. They will lend money quite easily for equipment but still balk at significant loans for digital technology. We all have to change our thought patterns to stay competitive”.
BDC has just created a fund from which it will loan money to businesses so they can invest in new technology.
After his presentation, Cleroux was asked if he felt the tariffs placed on Canadian steel and aluminum by the U.S. would do serious harm to Canada’s economy.
He didn’t think so and added that he believed the tariffs would be removed in the next few months as a result of negotiations currently underway.
The conference was held at Travelodge.
