The Future of Manufacturing Is Urban: How Local Government Can Support Next Generation Makers

Often the first thing that comes to mind when many think about manufacturing are dirty production plants closing, workers left hanging with no jobs, and communities struggling with their futures.

And while the growth of global supply chains has resulted in manufacturing job losses in many communities, there is a resurgence of local manufacturing happening across Canada.

Manufacturing Reborn

Toronto is not often associated with manufacturing, but it is home to the largest concentration of manufacturing operations and jobs in Canada. It’s larger than both the second and third biggest centres, Montreal and Edmonton, combined.

Like many communities, Toronto saw large job losses in the sector through the 1990s and 2000s with shifting manufacturing supply chains and the scramble for lower-cost jurisdictions. However, over the past number of years, there has been a re-emergence of the sector.

According to the City of Toronto’s 2018 Employment Survey, manufacturing is a growing sector again, with 180 new firms added in 2018 and an employment increase of 2.6%, adding 3,460 new jobs. Demand for industrial space is at an all-time high with the vacancy rate at 0.8%. Overall, 135,710 people are employed in manufacturing in Toronto.

The growth in the sector has been focused in two specific areas — the development of technology hardware solutions, such as medical devices, IOT and smart city solutions, as well as micro- and artisan manufacturing, in verticals like food processing, furniture manufacturing and breweries.

Places for Making

There are many drivers behind this re-emergence of making. Government support for entrepreneurs through incubators and funding programs. Post-secondary institutions focused on supporting prototyping and collaboration with entrepreneurs. Market demand for locally produced products. But what has opened the door is that technology is making it easier and cheaper for creators to prototype, pre-sell and manufacture products for markets.

In communities across Canada makerspaces — places that provide shared access to 3D printers, laser cutters, and a range of other tools for manufacturing — have been popping up in libraries, community centres and industrial condos. This shared access has made manufacturing more accessible, and the creating process much cheaper.

When combined with online platforms like KickStarter that allow pre-selling of products and the ability to tap into global manufacturing networks that facilitate drop shipping from the supplier right to the customer’s door, anyone can create, manufacture and sell, their ideas.

Support for Entrepreneurs

The re-emergence of manufacturing in Toronto has been supported by municipal programs to support entrepreneurs. The Toronto Public Library has included makerspaces in several of their branches. The City of Toronto, in partnership with the Province of Ontario, launched a grant program to support small scale manufacturers. And, to support food producers, the City worked with the private sector to launch District Venture Kitchens, an incubator that provides shared production space and programming focused on helping early-stage companies bring their food products to market.

Entrepreneurs in the region also have access to a range of government-supported programs for early-stage manufacturers. Whether it be business support through MaRS Discovery District, industry research opportunities through local colleges, or production support via Celestica’s ReMAP Network, local, provincial and federal government investments have created an ecosystem to support the growth of manufacturing.

Mixed-Use Manufacturing Neighbourhoods

A challenge for manufacturing’s growth in Toronto is that production and artisanal space in the downtown core is being pushed out by high-rise residential and office development. Many early-stage manufacturers prefer to be in the core, given its access to young creatives and top engineering. However, space comes at a premium and is increasingly hard to find.

An example of this challenge was a proposed residential condo tower development at the corner of Queen Street West and Dufferin Streets in Toronto’s west end. The developer proposed replacing an old 60,000 sq. ft. industrial building with three residential towers. Following the typical trend, creatives were being pushed out of the neighbourhood to make way for gentrification.

The proposed plan went against the City’s Official Plan policies of protecting employment lands. The existing industrial building had been subdivided into smaller spaces and was teaming with small scale manufacturers and artisans. The surrounding community, along with the tenants of the building, opposed the new development. City Council denied the proposal and their decision was appealed to the Ontario Municipal Board.

Negotiating with the developer and continuing to engage with the local community, the City aimed to try and balance both needs — the need to bring much needed rental housing stock to the city, while keeping manufacturing and artisanal production space in the downtown. The solution identified was to create the first mixed-use residential manufacturing building in North America.

The collection of three buildings currently under construction will all feature residential rental units, whereas two of the buildings will feature retail at their base; the third will feature residential units above 60,000 sq. ft. and five floors of light manufacturing space.

While the pre-existing industrial building still had to come down, displacing its tenants in the interim, the mixed-use development was welcomed by the community and illustrated that modern manufacturing can co-exist with residents, providing creative jobs close to home for residents.

Supporting Next Generation Manufacturing

Of the 60,000 sq. ft. of manufacturing space, 14,500 sq. ft. has been set aside as a manufacturing incubator to support the next generation of manufacturers. The City negotiated the space as part of the development approval process and then did a competitive request-for-proposals to identify an operator.

Through that process, a public-private partnership comprised of MaRS Discovery District, George Brown College, and ReMAP, was selected to operate the incubator. Expected to launch later in 2020, Factory 6 and will provide access to plastic and metal 3D printers, CNC milling machines, laser cutters, a clean room and micro-electronics production line, all with the focus of supporting technology startups that are building hardware.

Factory 6 will play an important role in the manufacturing ecosystem for early-stage companies. While it is easy to find prototyping support, the real challenge is for companies that are commercializing and need space to do their first production runs. Finding contract manufacturers locally is often hard given the smaller product runs and even smaller margins. This means many products that are getting ready to commercialize end up being produced overseas. Once production has gone overseas, it often does not make it back.

Factory 6, with its network of support for entrepreneurs, alongside a clean room and production line, will mean these early-stage companies will be able to do their production locally. And, when the time comes, those entrepreneurs will have the scale and production experience required to work with local contract manufacturers to keep those jobs in Canada.

Overall, Factory 6 will be focused on leveraging product design and local production to support companies that will scale and grow to create the next generation of large manufacturing employers in the region.

Conclusion

There is no doubt manufacturing has faced challenges in Canada. However, thanks to investments from both federal and provincial governments in the future of manufacturing, along with smart and creative policy decisions at the local level, manufacturing is being reborn in Canadian communities.

Leveraging technology, encouraging creativity and entrepreneurship, while providing support for those looking to produce products locally, are the simple ingredients required to help encourage next-generation manufacturers — whether they be a craft brewer or technology entrepreneur.