Business talk with Dennis Darby
Dennis Darby is the President and CEO of Canadian Manufacturers & Exporters (CME).
Before serving as CEO of the OPA, Darby spent 24 years with Procter & Gamble, starting his career as a product engineer and rising to director of North American External Relations.
Dennis graduated from McMaster University in 1984 with a degree in Chemical Engineering and Management, and he is a registered Professional Engineer in Ontario.
You’ve been in your current role of President and CEO of Canadian Manufacturers & Exporters for over a year now. How does it feel to be the head of such a great organization?
It’s been an honor and very humbling because of the huge contribution that this sector continues to make in Canada. It’s a 148-year-old organization. And nobody would have predicted that suddenly free trade was going to be such an important and controversial topic. As they say, timing is everything and it’s been quite a ride so far.
Prior to taking on this important role, you had mentioned that you wanted to focus on innovation. In your opinion, why do you believe it’s important to focus on innovation?
If Canadian manufacturers want to compete on the world stage, they have to focus on innovation and on ways to reduce costs. We learned through NAFTA 25 years ago that only the most cost-efficient, scalable manufactures would be alive today. It’s even more important because we signed this free trade agreement with Europe. So more than ever, innovation – which is shorthand for investment, efficiency, technology is more important than ever.
The NAFTA renegotiations taught us that our competitiveness is very dependent on our trade relationships. Canada has always been a trading nation, capitalizing on our ability to convert our resources into wealth. Wayne Gretzky once said: “You have to know where the puck is going” and we have to know where the puck is going by constantly innovating, and finding new ways to improve.
What are some of the steps that CME has taken to focus on innovation?
CME has always acted as the voice and as the spokesperson for this sector. But in the last 25 years, we’ve begun to offer more to SMEs – programs to help them become more efficient, export help and various others. Our role is to be innovative and supportive of free trade (getting rid of tariffs) and to help companies to compete and be successful. I was pleased to learn about the scope of things we do to help SMEs across the country dealing with tax issues, lien training, technology assessments and help them identify things that they never even know. SMEs often don’t pay attention to politics and the latest regulations so it’s our role to assist them in today’s fast-paced world.
You’ve previously mentioned that you wish to work with the government of Canada to help towards the growth of Canadian manufacturers. What is the current status of this? Have you managed to work efficiently with the government and if so, how?
We work with the federal government on a regular basis. In the recent renegotiations of NAFTA, we along with 3 associations assist them in long process.
In 2016, CME released its “Industrie 2030”, and it called for a number of things to help manufacturers be more competitive. We worked with the federal government on tax treatment for capital investment for example. We were able to get the strategic innovation fund expanded.
If you’re not investing in plant and equipment, you won’t be able to be competitive vis-à-vis the US, Europe, etc. We work on helping ensure that we are attracting and training the people we need for the next 25 years.
In your opinion, why do you believe manufacturing plays such a crucial role in the Canadian economy?
It’s more than my opinion. Manufacturing contributes 650 billion dollars a year of GDP – that is 10% of GDP. It’s 2/3 of our exports. It’s the way that Canada benefits from its natural resources. Manufacturing is the sector that supports the service industry. Canada gains when it processes its raw material, rather than just selling raw materials to other countries. We’re not a country like Japan with very little resources and we have historically taken advantage of our resources.
Why is manufacturing important? Because that’s where technology is commercialized. Manufacturing has everything from its systems, to robotics, to automation. It will always have the role of commercializing our technology and basically taking advantage of our resources.
What are some of the resources that CME is providing to small business owners when it comes to helping them grow their business?
It really relates to what do they need to become efficient and effective, and dealing with government regulations, taxes, etc. They need somebody to be their voice for all levels of government. We think that we do a good job of being the singular voice for manufacturers. We, therefore, help them on the practical and policy level.
For entrepreneurs who are looking to start their small business, what advice can you give them in terms of manufacturing and exporting?
Join CME! Because it’s the largest network of businesses, suppliers. Talk to CME and we can point you to all the programs that exist. This is a message to SMEs in manufacturing – you are a trade-exposed industry. You’re not just competing with manufacturers across the road but with manufacturers in all the countries that we trade with. The resources are available here for you.
What are the top challenges that SME owners face when it comes to manufacturing and how can they overcome them?
It’s a universal challenge to find skilled labor. 69% of companies said they’re facing immediate labor and skilled workers shortages. It’s most acute in production. Not enough students are choosing to manufacture. Not enough women are going into the industry. We hear companies say: “We would expand but we can’t support the equipment that we want to buy”. The big challenge is access to skilled labor. To give you some background: In terms of participation – our country has done a good job of having post-secondary trained individuals. The workforce is aging and there aren’t enough young people joining the manufacturing industry. It has been a male-dominated industry for most of history. When we’ve surveyed women, they previously would say that it wasn’t an inclusive culture but that is certainly changing.
Everyone wants to work in high tech now. We’re at a point where we have something to say – the tech space you wanted to work in is now in manufacturing and we need to get skilled labor. And we need to get women leaders and mentors to spread the message for more women to join the manufacturing sector. These are good, high paying jobs. When people think of manufacturing, they often think of the dirty, tough work being done in the Hamilton steel mills. The manufacturing jobs have changed but the public image hasn’t changed a lot with it.
What does the future of Canadian Manufacturers & Exporters look like? What are some of the projects that you are planning that can benefit Canadian business owners?
Our management survey was completed in October. We’re really working on the idea of how to develop skills. We’re investigating what other countries have done to develop that workforce. The second area is how do we help them access the new markets and increase export development. Canada is very dependent on the US. 75% of trade is done with the US. How do we help identify the opportunities with our big partners in Europe and Asia?
On a final note, how would you say your past experience has prepared you for your current role as head of Canadian Manufacturers & Exporters?
I spent 25 years with one of the biggest manufacturers in the world, Proctor, and Gamble, in various different roles. I understand the complexity and the degree of change manufacturing has to go through. Before this role, I ran a trade association for 9 years. The combination of working in both sectors has prepared me to understand what it takes to make a member origination run smoothly.