Fello have deep respect for organizations with clear objectives, massive impact, and an unshakable passion for their mission. Next Generation Manufacturing Canada (NGen) is one of those rare forces.

NGen has become one of the most effective economic engines in the country—fueling over $7 billion in new sales, helping launch 66 new companies, and creating nearly 4,500 direct jobs through 211 collaborative manufacturing projects. That’s not theory. That’s execution. For every dollar invested, they’ve delivered a 32× return—and generated nearly $6 in federal tax revenue per dollar spent. Learn more here in this report.

Behind that momentum is Jay Myers—a respected leader with decades of experience in Canadian industry, trade, and innovation. As CEO of NGen, Jay is pushing bold ideas forward while staying laser-focused on real-world outcomes. We sat down for an in-depth Q&A with Jay to unpack the true ROI of AI, the story behind Canada’s gigafactory strategy, why “friend-shoring” could backfire, and what it will take for Canada to reclaim control of its industrial future.

Advanced Manufacturing & Growth: A Q&A with Jay Myers

1. On AI and the Productivity Paradox: Where is the ROI?

Q: The latest data shows Canadian business investment in AI is accelerating, yet national productivity remains a critical concern. We’re past the hype cycle. From your unique vantage point overseeing Ngen’s AI for Manufacturing Challenge, where are you seeing the most tangible, dollar-for-dollar return on investment from AI on the factory floor? What is the single biggest remaining barrier preventing a widespread, measurable impact on our national productivity?

A: First, let’s set the story straight. Manufacturing is outpacing the Canadian economy as a whole when it comes to productivity growth. In fact, since 2010, manufacturing productivity in Canada has risen twice as rapidly as in the United States. It’s a good – if often overlooked – reminder of the importance of our manufacturing sector as a generator of economic growth and the role it plays as an integrator of technology.

Much of the productivity growth in manufacturing comes from the use of new and improved technologies. We are definitely seeing manufacturers increase their investments in AI. They are focusing on value-adding applications that enhance design and engineering capabilities, improve the efficiency and flexibility of production processes, heighten quality control, implement predictive and prescriptive asset maintenance, improve materials and energy management, autonomize automation and robotics, and develop smart products and AI-enhanced services.

But investing in AI alone is not enough to guarantee enhanced productivity or financial performance. On the factory floor, AI applications need to be integrated with other technologies – sensors, IIOT, edge computing, automation, and robotics – in systems that can harness high quality, reliable data to deliver value-adding business outcomes. The success of any AI implementation depends on the quality of the data used and how it is collected. It takes a collaborative approach to designing, developing, and deploying AI solutions in manufacturing. It takes a clear view of how companies add value and the processes, products, and services that contribute most to value creation – those areas where AI can be applied to maximum benefit. Companies also need a good understanding of the requirements for the successful adoption and continued use of AI in their systems – the knowledge and skills are required to manage AI training and deployment, best practices in AI governance and risk mitigation, and the costs involved not only of their initial investments but in the maintenance and continual improvement of their systems. Above all they need patience, because it takes time to train systems and benefits do not emerge overnight.

NGen’s AI for Manufacturing Challenge is designed to build the partnerships necessary to ensure successful AI deployment, backed up by project support that helps manufacturers manage the implementation and ongoing use of AI solutions on the factory floor.

2. On the Gigafactory ROI: Are We Fueling a Sustainable Ecosystem?

Q: Canada has committed tens of billions in public funds to attract foreign-owned EV battery gigafactories, sparking significant public debate. Now that construction is well underway on several sites, what specific policy action or industry-led initiative is most urgently needed to ensure these massive investments translate into a truly integrated, innovative, and Canadian-owned supply chain, rather than just benefiting a few large multinationals?

A: We have a tremendous opportunity to build out domestic supply chains around each of the major investments being made in these factories. Canada is lucky. There are few places in the world where there is such a concentration of world-leading research, technology development, manufacturing capabilities, and skills development, let alone access to raw materials. Canada’s advanced manufacturing assets are some of our best kept secrets! Key to our success will be to bring together the right set of industry, technology, research, and workforce development partners to develop and scale up the solutions that the multinationals need.

NGen is helping to build collaborative advanced manufacturing partnerships. What’s needed from government are financial incentives for the small manufacturers and technology companies that make up the majority of our industry sector to do a reset – to find new customers, pivot into new product lines and technology applications, build their capabilities to match commercial scale demand, and work together to develop innovative solutions that can be readily adopted and managed at competitive costs. It’s time for government to do a reset as well. We need to shift from an activity- to an outcomes-based policy mindset. Tax incentives and investment programs need to target real value-adding outcomes, our regulatory system should be geared to defining desired policy objectives rather than trying to prescribe how companies should attain them, and innovation, industry, and procurement policies and programs need to be integrated rather than siloed as they currently are.

3. On Economic Headwinds: A ‘Do More with Less’ Mandate

Q:With economic uncertainty and high capital costs continuing to dominate the 2025 landscape, many manufacturers are focused on short-term operational stability over long-term R&D. How has this ‘do more with less’ reality shifted Ngen’s investment strategy? Are you now prioritizing projects with faster, more certain operational payoffs over more speculative, but potentially transformative, technologies?

A: There’s no question that manufacturers are conserving cash and, of course, investments in anything innovative like R&D, the adoption of new technologies, workforce training, and new market development come predominantly from cash flow. But, at the same time, many companies see current challenges as an incentive to invest in productivity-enhancing technologies, exploit new market opportunities, and build out more resilient supply chains. Our investment strategy hasn’t changed. We’re in the business of building transformative manufacturing capabilities through collaborative partnerships that develop integrated technology solutions for manufacturers. Because manufacturers are involved in all our projects, we always expect to see commercial outcomes upon project completion. While some of our projects have slowed down, our project pipeline has expanded. Our recent AI for Manufacturing Challenge, for instance, was oversubscribed by six times the amount of funding we have available. It’s a good indication that while manufacturers are being cautious with their cash, many see the importance of investing for the long-term not just for the headlines.

4. On Strategic Autonomy: The ‘Friend-Shoring’ Dilemma

Q: The “friend-shoring” strategy presents a massive opportunity but also a risk of deep dependency. As Canadian companies integrate more tightly with U.S. supply chains, what must they do to avoid becoming ‘branch plant’ operations for a new generation? How can they leverage this integration to build their own unique intellectual property and global product mandates, ensuring Canada’s long-term strategic autonomy?

A: A very large part of Canada’s manufacturing sector is made up of suppliers to multinational OEMs either in Canada or offshore, mainly in the United States. We have relatively few Canadian companies that control product mandates and their associated innovation investments. At the same time, our technology companies are highly dependent on international customers and capital. The reality is that we have already become a supplier of the raw materials of the 21st century – IP and talent – to the world. Our record of growing companies in Canada has not been stellar. Transitioning to a less dependent, more resilient industrial base will take time and a highly intentional and strategic policy approach by government and businesses alike.

Yet there are now significant opportunities to build back manufacturing capabilities in Canada and develop more resilient domestic supply chains. Essentially, it’s about matching our industrial and technology capabilities with domestic customers that can sustain their commercialization and scale-up. Procurement requirements for defence, infrastructure, homebuilding, Arctic development, and health care can and should be mobilized to favour and grow Canadian companies and supply chains. Canadian companies can look to pivot into new product lines to fill gaps in the market created by US policies – to displace US imports, develop new international partnerships, or for instance in the case of biomanufacturing seize the day in the face of regulatory and funding uncertainty in the United States. It will take significant public and private sector investment, a lot of collaboration among businesses and the public sector, and much greater attention by smaller companies on protecting and commercializing their IP. The development of IP strategies is a critical service that NGen provides to all our project partners. The provision of refundable tax credits for the acquisition of IP is another mechanism that could be deployed to help commercialize Canadian IP in Canada.

5. On NGen’s Evolution: What is the Next Mission?

Q: The Supercluster Initiative was designed as a catalyst. Eight years in, the ecosystem has evolved significantly, in part due to Ngen’s work. What do you see as the next great, unsolved challenge for Canadian manufacturing that requires a national, collaborative effort? If you were to define ‘Ngen 2.0,’ what would its mission be, and how would it differ from the one you’ve pursued so far?

A: NGen has demonstrated the effectiveness of our collaborative approach in building advanced manufacturing capabilities that generate significant economic, environmental, and social benefits for Canadians. To date, every dollar we have invested in completed projects has generated over $37 dollars in sales and close to $6 in federal tax revenue. Our projects have created 55 new companies and close to 4,500 new jobs. Of course, we are aiming to do more. We will be taking a more targeted approach to raising capital and investing in projects that address Canada’s economic challenges. We are already supporting transformative projects that will accelerate and lower the cost of homebuilding. We are aiming to play a similar role in facilitating solutions for defence, emergency preparedness, infrastructure, and health procurement. We will continue to invest in transformative capabilities and strengthening collaboration across Canada’s advanced manufacturing sector. At the same time, we will be taking a more active role in attracting customers, capital, and talent to help scale and commercialize the solutions arising from our projects.

6. On a Strategic Pivot: What is Canada’s ‘Plan B’?

Q: Given the staggering cost of entry in the EV battery race and weakening global consumer demand, a narrative is emerging that Canada may have arrived too late and paid too much. Looking past the current focus, what adjacent green technology sector—be it hydrogen, advanced biofuels, circular economy solutions for manufacturing, or specialized components—do you believe Canada has a more realistic chance of achieving global leadership in, and should we be strategically redirecting our industrial focus there?

A: Patience. We need to keep our eyes glued to the future. Battery science and technologies are evolving rapidly. There are good strategic reasons for Canada to be in the EV battery race. Now we need to leverage our advanced manufacturing capabilities to grow a world-leading innovation supply chain around the investments we’ve made, enabling them to leapfrog the competitors. We are in an excellent position to do that based on our expertise in quantum and new materials development.

There are also great opportunities in hydrogen, biofuels, and materials recycling, as there are in nuclear and carbon capture. But we won’t be a leader in any of these sectors unless we can embed these technologies in Canadian industry and grow out supporting innovation and manufacturing supply chains. That means facilitating greater demand as well as scaling manufacturing production here in Canada. Without domestic customers, it will be hard to build the critical mass needed for industrial leadership in any technology sector.

Fello's Thoughts.

What stood out most from our conversation with Jay Myers is that Canada doesn’t just need investment—we need alignment. AI can’t deliver value without integration into full systems. Manufacturing won’t evolve without patient, long-term strategies. And gigafactories aren’t the finish line—they’re the starting point. Jay emphasized that we need to build ecosystems around these flagship investments: connecting supply chains, IP, commercialization strategies, and SME participation. Without that, we risk becoming a stopover in someone else’s value chain.

Jay also made it clear that Canada’s industrial advantage will come down to owning our innovation. As friend-shoring accelerates, we have a window to protect and scale Canadian IP, not just export talent. NGen isn’t just handing out funding—it’s building blueprints. With a 32× return on investment and billions in economic impact, NGen is proving that focused, collaborative manufacturing strategies work. The playbook is there—we just need the vision and execution to match.