Manufacturers in Alberta are lagging in digital investment, study indicates

Alberta manufacturers are lagging behind the rest of the country when it comes to investing in digital technology, a new study by the Business Development Bank of Canada shows.

While 39 per cent of Canada’s small and medium-sized manufacturing companies have introduced advanced equipment to improve production and customer satisfaction, just 35 per cent of their Alberta colleagues have taken this step, according to the report released Monday.

Quebec, with its large aerospace industry, leads the way at 45 per cent.

“The Alberta economy has been suffering a recession for the last two years and a large part of the manufacturing sector is related to oil and gas,” bank chief economist Pierre Cleroux said in an recent interview.

“Probably it was not a good time to invest more in technology. They were just trying to get through the recession.”

As well, much of the province’s manufacturing is in the food and beverage field, the slowest to adapt to what’s being called Industry 4.0 or the Fourth Industrial Revolution following mechanization, electrification and automation, Cleroux said.

They should act soon. Flexible, highly automated factories in Europe and the United States can now compete against low-cost Asian operations, and Canadian firms that have jumped into the digital age claim higher productivity, lower costs and better quality, the report says.

The technology includes wireless sensors on equipment to track production and correct problems, machines that analyze their own data to predict when maintenance is needed, analytic software to identify the best ways to improve work, and items made with sensors to monitor usage.

“The way the world is moving, in five or 10 years, if you don’t have this type of technology, you won’t be able to compete,” Cleroux continued.

“The technology monitors every step of your production, so you can really … make corrections very quickly.”

The report, which was based on telephone surveys done last winter with 960 leaders of companies employing 10 to 499 people, found on average the firms invested $261,000 in Industry 4.0-related projects over the last two years.

Almost 41 per cent put in less than $50,000. Cleroux said that while firms should invest regularly in technology, the cost is going down.

The total value of Alberta manufacturing has decreased about four per cent from five years ago, dropping heavily along with the price of oil before recovering over the last year, according to figures from ATB Financial.

However, the value of wood products rose 53 per cent during this period, chemicals were up 39 per cent and food products gained 18 per cent.

Cleroux thinks manufacturers working in the province’s energy industry will boost spending on digital technology as the economy improves.

“I think they’re going to catch up,” he added.

“They’re a very solid manufacturing sector and they’re a sector making equipment that can really benefit from the technology.”