Originally published by Graham Warwick for Aviation Week & Space Technology on March 31st, 2017
As aviation embraces digitization, Canada’s aerospace industry hopes to tap into a new government initiative to boost investment in artificial intelligence (AI), advanced manufacturing and other digital-driven technologies that can be applied throughout the life cycle of aircraft.
Already the third-largest aerospace cluster in the world after Seattle and Toulouse, Montreal is aiming to become a “supercluster” in AI—a suite of technologies that the aerospace industry is applying to analyze the vast amounts of data generated during the design, manufacture and operation of aircraft.
The Canadian federal and Quebec provincial governments already support the country’s aerospace industry through various mechanisms, but the Montreal cluster hopes their new innovation strategy will attract the expertise in advanced software and systems design that is needed to be competitive in the future.
Unveiled on March 22, the federal government’s 2017-18 budget proposes establishing a new department, Innovation Canada, that will invest up to C$950 million ($710 million) over five years to support a small number of business-led superclusters with the greatest potential for accelerating economic growth. A competition for the funds will launch in 2017 and focus on advanced manufacturing, clean technology, digital and other sectors as well as transportation, Ottawa says.
On March 28, Quebec followed up with its 2017-18 budget, under which the provincial government plans to invest C$100 million over five years to create a scientific and industrial supercluster devoted to AI. The move is welcomed by Aero Montreal, a group that brings together industry, universities and research institutions to support development of the regional aerospace cluster.
The planned superclusters will not be sectoral and will develop know-how that can be applied across industry sectors, says Suzanne Benoit, president of Aero Montreal. “In its budget, the Quebec government recognizes the importance of developing transformative technologies with investments aimed at creating a supercluster in artificial intelligence and developing the sector of virtual reality,” she says. “These new technologies alone present enormous potential for our aerospace companies.”
Quebec accounts for 52% of Canadian aerospace sales and close to 50% of the industry’s jobs. It is home to Canada’s four largest aviation original equipment manufacturers (OEMs): Bombardier, Pratt & Whitney Canada, Bell Helicopter Textron Canada and CAE. “These four big OEMs are important for Quebec because they drive innovation and help develop an innovation culture in our smaller companies,” says Benoit.
As is the case across Canada, small and medium-size enterprises (SME) make up the bulk of the almost 210 companies in the cluster, and developing the capabilities of the supply base is a large part of Aero Montreal’s purpose. Aerospace accounts for one in every 54 jobs in the Greater Montreal area. “That strong concentration is one reason why we are so tightly knit and work so well together,” Benoit says.
The entrepreneurial and engineering skills it is hoped an AI supercluster will bring to Quebec are expected to play a role in the aerospace industry’s ongoing transition to “Industry 4.0”—which includes virtual design, automation and connected manufacturing—a task that falls heavily onto Aero Montreal because of the high proportion of small companies in the cluster.
Illustrating its closely knit organization, the cluster also includes educational establishments. Aero Montreal works with the region’s trade school, technical schools and universities, to ensure a supply of engineers and technicians. “When we know that the industry is booming, we do a big campaign to get students enrolled,” she says. “When there is a slowdown, we adjust the flow so everyone will get a job.”
The region’s aerospace sales slipped in 2016, to C$14.4 billion from C$15.5 billion a year earlier, the downturn in business aviation and commercial helicopters affecting all the OEMs. Bombardier has been shedding jobs as part of its five-year turnaround plan, but Benoit says Aero Montreal has a strategic working group in which the OEMs cooperate in an effort to minimize the impact of cyclical layoffs.
Quebec continues to work to attract aerospace companies to the region. The most recent addition was Airbus company Stelia Aerospace, which in 2013 set up in Mirabel, near Bombardier Aerospace, to assemble fuselage center sections for Global 7000/8000 business jets.
“Where we have a gap is in system engineering and system integration capability,” says Benoit. “This is really important, and we are trying to build on this, because with the big artificial-intelligence projects for Quebec, which will play a key role in AI in Canada, we need system and software engineers.”
The challenge the Montreal cluster faces “is to stay at the front of the parade in terms of innovation,” she says. “The Canadian government understands that, and the Quebec government is matching what the federal government is doing to reinforce the innovation capability of Quebec. We will be the hub for Industry 4.0, artificial intelligence, etc., and this will be key for our industry to thrive internationally.”
Canada does not spend as heavily on defense research and development as the U.S. does and, in the absence of a major research organization like NASA or a major research program like Europe’s Clean Sky, federal and provincial governments support industry through different mechanisms. In February, Ottawa announced it would provide C$372.5 million in repayable contributions to Bombardier for the C Series and Global 7000 programs.
The funding is being provided through Ottawa’s Strategic Aerospace and Defense Initiative and follows the Quebec government’s $1 billion investment in a C Series limited partnership with Bombardier. Quebec’s investment arm now holds a 49.5% equity stake in the program, in return for a commitment that engineering, manufacturing and assembly work will remain in the province for at least 20 years.
In October 2016, the federal government invested C$54 million in the development of next-generation aircraft technologies by a consortium of 15 Canadian companies led by Bombardier. This is funded by Ottawa’s Technology Demonstration Program, which makes nonrepayable contributions to large-scale R&D projects.
The following month, Quebec invested C$40 million in the second phase of an environmental aircraft research program, SA2GE. Subprojects include advanced cockpit, rear fuselage and vertical tail structures with Bombardier; virtual and connected training technologies with CAE; new navigation technologies with Esterline CMC Electronics; photonic modules for airborne communications with TeraXion; and a flight-critical controller for nonavionics systems with Thales.
The Quebec government is also supporting Aero Montreal’s efforts to increase the international competitiveness of Montreal’s smaller suppliers. Now entering its fifth year, the Mach Initiative is a supplier-development program that now involves 60 SMEs, with OEMs providing mentorship for projects to improve supplier processes and make them more productive.
“We want to reach 70 SMEs, so we plan to take on 10 more this year,” says Benoit. Quebec is providing another C$4 million in public money, to be matched by C$4 million in private investment to fund the program for another three years. “We have done more than 600 projects up to now and want to do another 300 over the next three years,” she says.
As a next step in developing supplier capabilities, Aero Montreal will in April begin the Mach Fab 4.0 Initiative, a five-year program, with C$19 million in public and private funding that will support 50 SMEs in transitioning to digital companies. The program will fund projects involving areas such as automation, robotics, Internet of Things, simulation, additive manufacturing and cybertechnologies.
Benoit says examples of the types of projects that will be funded under Mach Fab 4.0 include digitization of the shop floor to enable real-time management of manufacturing; optimizing the production cycle by using simulation to determine the best sequencing of machines; using data collection for preventive maintenance of manufacturing equipment; and connecting to customers’ enterprise resource management systems to allow the real-time exchange of information.
Benoit says the federal government is watching the initiative with interest as it wrestles with how to help industries across the country with the transformation to digitization and automation. One challenge, she says, is identifying reliable consultants with relevant experience that can help Montreal’s aerospace SMEs make the transition to Industry 4.0. The bigger Tier 1 suppliers have yet to make that shift and are unable to help the SMEs, she says, adding: “We can’t have the blind leading the blind.”
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