The Impacts of Disruptive Technological Change in the Southern Ontario Automotive Parts Industry

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Authors

Carey, Jeffrey

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thesis

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eng

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Global Production Networks , Economic Geography , Geography of R&D , Canadian Automotive Industry , Disruptive Technological Change

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Abstract

In response to recent challenges facing the Southern Ontario automotive industry, including disruptive changes in vehicle product technologies, federal and provincial Canadian governments have sought to transition the sector’s strategic focus from manufacturing to innovation and new product development. In doing so, they have established numerous innovation programs and formulated a supercluster strategy designed to enhance levels of corporate automotive research and development (R&D). Consequently, several observers suggest that the Southern Ontario automotive industry has embarked on a new developmental path. Employing the GPN 2.0 approach, this study evaluates these claims and the efficacy of current government policy by examining the regional-level impacts of recent technological advancements in the Southern Ontario automotive parts industry. A 2015 plant-level survey of parts producers competitive and innovation strategies and corporate interviews are used to investigate the extent to which the sector is adapting current products and processes, at what scale automotive innovation occurs and the location factors which attract new automotive technology investments. Three primary research findings follow from this analysis. First, regulatory, technological and safety concerns are inhibiting industry advancement and supplier investment in components for electrical propulsion and CAVs. Second, few auto parts producers engage in early-stage innovation or compete based on product differentiation. Third, global parts suppliers continue to locate their primary corporate R&D facilities outside of the province. Subsequent chapters explore the implications of these findings for economic development in Southern Ontario. Corporate interviews reveal that automotive Original Equipment Manufacturers (OEMs) and global automotive suppliers shape which early-stage R&D investments are made, where associated automotive innovation activities occur, and how new product design and engineering information is transferred within the sector. The overwhelming majority of new technology investments are observed to cluster in Michigan and serve to reinforce Southern Ontario's interconnection with the Great Lakes automotive region (GLR). Due to built-up manufacturing skill and expertise in the province, many parts suppliers continue to transfer product specification information both to their own plants in Ontario and those of their lower-tier suppliers. The concluding chapter identifies three pillars upon which the resiliency of Canadian automotive parts manufacturing can be secured.

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