As stated previously, I have a number of concerns with London’s aggregate economic development strategy. I find it far too siloed and obscure to be effective. Worse still, I am troubled by the lack of alignment, role clarity, and duplication of effort within the city’s economic development apparatus.
However, one area that does not concern me near as much is London’s development strategy for the manufacturing sector. Throughout my tenure in and around the city’s economic development portfolio, there has been little debate over who has primary responsibility for growing this sector, namely the London Economic Development Corporation (LEDC). And, in my opinion, the LEDC has done a good job clearly defining what it seeks to accomplish in the sector and how they plan to go about doing it. Their new Strategic Plan, which is available on their website, neatly lays out their plans to grow London’s manufacturing base and sustain it.
Specifically, what I liked about the LEDC plan is their approach to clustering – amplifying London’s anchor industrial players such as 3M, General Dynamics, Brose and Trojan Technologies – and then supporting them by identifying, attracting and tethering feeder industries to the region. I also very much like their commitment to the Food Processing sub-sector as evidenced by the growth and maturation of companies such as Labatt, Cargill, McCormicks and The Cakerie. This focus is a natural given London’s proximity to abundant, high-quality farm and fresh water resources. They have also made effective use of the available industrial land (of which we could use much more) and worked effectively with City Hall to cut through bureaucracy when necessary.
The challenge with growing the manufacturing sector is twofold. First, the region is competing with almost every civic jurisdiction in Ontario and the eastern US for the same market opportunities. A quick scan of almost any city and state economic development strategic plan nestled along of Canada-US border lists manufacturing as its number one target sector. Even Ontario’s digitally-biased ‘Tech Triangle’ of Kitchener, Waterloo and Cambridge still depend heavily upon manufacturing as the largest percent contributor to its economic base.
The second barrier to growth is that the sector is highly-influenced by macro-economic factors – volatile currency exchange rates, evolving trade agreements, tightening capital markets, growing protectionism – well beyond the city’s control. Examples of these macro-influences and their impact can be seen almost daily as evidenced by recent news coverage of the Cami plant in Ingersoll and the Firestone plant in Woodstock.
It took London’s manufacturing sector nine long years to reach its 2008 pre-recession levels of 30,000-plus workers, and as trade wars and a rising dollar loom on the horizon, our region may have to work harder and smarter than ever if we hope to retain what we have recovered.
Sector Goal and Current Strategies
In my estimation (and subject of course to what happens with CAMI and the GDLS contracts in the near-term), an appropriate job goal for the manufacturing sector would be to realize a modest increase to 36,000 employees by 2022, equating to an approximate increase of 10% over our current level. I believe that the LEDC should continue to serve as the city’s primary agent for the sector, and continue to deliver the roster of programs and services they provide in support of our largest manufacturing employers. The existing LEDC strategies include continuing to:
- Build new advanced manufacturing clusters in defense, aerospace, materials, building products, and sporting goods.
- Position London as a premier provincial site for food processing.
- Facilitate effective labour matching for employers, through attraction of new talent, retention of skilled graduates and engagement of experienced workforce.
Related to this last strategy and the development of our workforce, I would also like to see London better harness and engage the increasingly larger portion of London’s unemployed by pursuing manufacturing initiatives that still support the working class.
First, I would like London to utilize its central geography, large regional airport and access to the 401 to develop duty-free manufacturing, trade and distribution zones. While this is not particularly sexy or long-term business, the opportunity to use London airport’s 24-hour access and departure flexibility to attract good-paying manufacturing jobs is something that should be at least explored. For example, it would have been a coup for the city to secure the new 250-plus job Sysco distribution centre that now resides in Woodstock. It is not acceptable to see badly-needed employment opportunities head down the road while we debate the net benefits of such opportunities under the guise of ‘managed growth’. When London labour participation rates return to a level at or near the national average, we can talk about ‘managed growth’. Until then, we need to focus on helping find our citizens work.
Second, I would also like to see a much more intensive training regime for our existing workers, with pay. London is fortunate to have some exceptional training resources available through Fanshawe College and the local trades union LiUNA Local 1059. The city can also utilize potential public and private sector partners such as Pathways and North American Trade Schools. Obviously, money is going to be a factor. However, given what our community is already distributing through social services, there has to be enough resources available to properly finance this extensive re-training initiative, especially if London can secure matching federal and provincial investment that is often directed to such industry transitions. The key is to get those Londoners who are willing and able to work, trained with the skills necessary to succeed in our evolving economy and restore their sense of self-worth and value.
One final strategy that I would like to see explored further, ideally in partnership with National Research Council, Western and Fanshawe, and perhaps a company such as IBM, is a more intensive effort in the application of Artificial Intelligence (AI) in the manufacturing sector. Clearly, the increased use of decision-based robotics in manufacturing will continue to be a threat to the sector’s current employment base, and I think it is best for London to play an influential role in this area versus waiting for others to take it away from us.
London’s roots in manufacturing run deep and our economic sustainability as a community relies heavily on the health of this economic sector. Therefore, it follows that London must never relent in its support of our manufacturers and never abandon the workers that make it all work. We must anticipate evolving market needs, respond to quick changes in market conditions, and continually invest in the people, training and infrastructure necessary to ensure the sector’s ongoing success.