The Next Generation Manufacturing Cluster (NGen) is a policy initiative implemented by the Department of Innovation, Science and Economic Development (ISED) of the Government of Canada through its Global Innovation Clusters (GIC) initiative. While initiated and supported by public funding, NGen is governed and driven by industry, supporting a diverse ecosystem of firms, start-ups and research organisations in advancing Canada’s advanced manufacturing capabilities through collaborative innovation.
Next Generation Advanced Manufacturing Cluster (Canada)
Abstract
The Next Generation Manufacturing Canada (NGen) Cluster is one of five sectoral clusters that have been established under Canada’s Global Innovation Clusters (GIC) initiative. The GIC programme was first launched in 2017 as the Innovation Superclusters Initiative and renamed in 2022. The aim of GIC is to strengthen Canadian innovation capacities and performance in five areas that were selected by the government through a competitive process as being of national economic advantage and opportunity: digital technologies, protein industries, artificial intelligence (AI), oceans, and advanced manufacturing. The NGen cluster and other GICs are prominent examples of sectoral cluster policy initiative by the Canadian government, a term this case study uses interchangeably with industrial policy.
Each sectoral cluster is designed to empower an industry-led approach to supporting innovation in each of the five areas. While the GIC programme does not dictate the nature and direction of projects undertaken by cluster members, it emphasises collaboration and coalition building between larger and smaller firms within and across industries. This approach aims to support smaller firms developing innovative solutions in each of the five thematic areas to collaborate with and leverage the capacities and infrastructures of larger, strategic industrial enterprises, whether Canadian or multinational enterprises (MNEs). The rationale of the policy instruments deployed by the clusters is therefore in large part to de-risk these industrial collaborations. Projects focus on pre-competitive stages of technological readiness, and each cluster places a strong emphasis on the creation, protection, and commercialisation of its cluster members’ intellectual property (IP).
The objective of NGen is to retain and enhance the competitiveness of Canadian industry, particularly in the tradeable manufacturing sectors and global value chains that are of strategic importance to Canada’s present and future socio-economic well-being and resilience. NGen is industry- and technology-neutral and given the importance of cross-sectoral collaboration for the competitiveness of manufacturing enterprises, many of the projects it supports involve the intersection of one or more industries and technologies (e.g., of robotics and manufacturing, of machine learning and manufacturing, etc.). An overview of key programme characteristics is given in Table 1.
The findings and analysis presented in this case study are based on a combination of interviews and desk research. The OECD TIP Secretariat Team conducted 19 semi-structured interviews with a diverse range of stakeholders directly involved in NGen, including government representatives, cluster management, small- and medium-sized enterprises (SMEs), large firms, and research organisations between July and October 2024 and between July and August 2025. These interviews provided insights into the perspectives, experiences, and challenges faced by each group within the NGen ecosystem. Additionally, desk research was undertaken to review relevant publicly available documents, previous evaluations, and reports on Canada’s GIC initiative. The Secretariat is extremely grateful to the stakeholders in Canada for their time and contributions to the development of this case study.
Source: NGen (2024[1]).
Background: The Next Generation Manufacturing Canada (NGen) Cluster, part of Canada’s Global Innovation Clusters (GIC) initiative, was established to increase Canada’s competitiveness in advanced manufacturing. Since its launch in 2017, the GIC programme has aimed to support innovation in five critical sectors, with NGen specifically focused on strengthening Canada’s position in manufacturing, by enabling SMEs to benefit from collaborative effort, maximising the value of their IP and bringing ideas to commercialisation. NGen aims to strengthen national supply chains and to ensure that the country’s manufacturing sectors contribute to the country’s export-oriented industrial output in a context of rising international external pressures and competition. The NGen cluster also aims to offer support for Canadian firms to pursue opportunities in emerging digitally enabled and environmentally sustainable value chains.
NGen is an industry-led, not-for-profit organisation dedicated to building world-leading advanced manufacturing capabilities in Canada by research and innovation collaboration between larger and smaller firms, within and across sectors. This collaborative approach places a strong emphasis on innovation at pre-competitive technological readiness levels (TRL 4 – TRL 7) and on providing stakeholders with a clear pathway to manage any resulting intellectual property (IP) that the projects produce. The collaborative approach also enables smaller firms, both new and established, to participate in projects with strategic and large industrial partners, and in doing so, to gain access to expertise, infrastructure, networks and piloting opportunities that they otherwise would not have. By fostering a more robust supply chain and strengthening SMEs, larger firms also benefit by reducing their dependence on foreign suppliers and tapping into pools of local expertise and capacity. The NGen cluster also works to support the broader innovation ecosystem by addressing skills and capacities that can facilitate both the development of new technologies and innovations in collaborative projects, but also their diffusion through the broader manufacturing sector.
The following examples illustrate some of the projects funded by NGen across several sectors:
A project led by Distributive, a start-up in software infrastructure, aimed to lower operational expenses for SME manufacturers by providing a more cost-effective solution, including real-time safety and quality monitoring systems in their production processes. Completed in 2022, the project’s software supported productivity improvements and higher reliability in manufacturing through quality assurance by applying AI tools to help automate complex visual inspection tasks.
Initiatives in the biotechnology and health sectors include a project led by Axolotl Biosciences, a Canadian start-up, working with StarFish Medical, Canada’s largest medical device design company, in the area of 3D bioprinting technology, and a project led by Cosm Medical, a Canadian med-tech start-up. The goal of the former project, initiated in 2022, is to created human neural tissues to generate functional brain models from stem cells. The purpose is to support neurodegenerative disease research and facilitate drug screening efforts. As to the latter project, with NGen project funding received in 2023, Cosm Medical is developing custom-fit pessaries for the treatment of pelvic floor disorders, by using advanced 3D printing to offer a wider range of fit options.
In the steel manufacturing sector, ArcelorMittal Dofasco, an international steel company, has led a project aimed at the digitalising metallurgy operations, with NGen funding awarded in 2020. The goal was to improve efficiency, optimising data management, and showcase the potential of digitalisation in heavy industry for future adoption of such tools. The initiative experimented with applying advanced sensing technologies and AI-empowered tools in operations processes.
With NGen funding awarded in 2023, a project led jointly by Martinrea Automotive Inc. and Polyalgorithm Machine Learning (PolyML) focused on integrating advanced machine learning algorithms into stamping machines. The initiative aimed to enable predictive maintenance and AI-driven smart welding, targeting zero downtime, zero defects, and optimised output in automotive manufacturing.
Outcomes: NGen has demonstrated agility in deploying resources to support critical objectives. For example, during the COVID-19 pandemic, NGen quickly mobilised funding to address urgent needs identified by the Government of Canada, supporting projects that can have an immediate impact, such as projects on developing and producing manufacturing products for patients and healthcare workers. Building on this responsiveness, NGen has established a diverse network of over 979 project partners. Among 588 industry partners, almost 90% are SMEs. These projects span a wide range of technologies and industries. In Phase I (2018–2023), funding allocations were directed mainly toward the EV value chain, pharmaceuticals, PPE, advanced materials, and medical devices. Several of these initiatives also introduced AI applications, such as quality assurance tools, predictive analytics, and automation solutions, to accelerate adoption in traditional manufacturing sectors. In Phase II (2023–2028), the focus has shifted toward sustainable manufacturing, materials processing, electric vehicles, biomanufacturing, robotics, and other advanced manufacturing solutions. Here too, AI has become increasingly central, supporting smart process optimisation, predictive maintenance, and AI-enabled design and production tools that enhance productivity and reliability across industries.
NGen has enabled extensive, inter-disciplinary collaboration between private firms, and universities and colleges. Through project funding, infrastructure provision (including testbeds and laboratories), and IP support, NGen has supported the commercialisation of advanced manufacturing technologies and facilitated the diffusion of automation, AI, additive manufacturing, and other digital technologies across the sector.
In consultations with the OECD, several SMEs emphasised that the combination of de-risking instruments provided by NGen and its emphasis on creating neutral spaces for collaboration and clear guidance on IP management enabled them to enter projects with strategic industrial partners. These projects in turn offered pathways for scale-up and commercial viability of advanced manufacturing technologies that they would have otherwise struggled to achieve. In addition, according to NGen’s own assessment, the support it offers through workforce development programmes has directly contributed to increasing the skills and capacities of some 2,900 people in 2023-2024 alone.
Given the importance of external trade to the Canadian economy, NGen initiative has enabled NGen to help firms reach new markets and customers, such as facilitating cluster members’ participation at Hannover Messe, one of the world’s largest international industrial trade fairs. In 2024, for example, NGen supported 75 exhibitors and 150 delegates, with 83 participating firms reporting a combined CAD 72 billion in sales. In 2025, Canadian participation expanded to 244 exhibitors, with 72% of exhibitors reporting promising sales leads. The N3 Summit further provided a venue for the stakeholders in advanced manufacturing for showcases, networking, and industry roundtables. Stakeholder consultations with the OECD consistently pointed to the value added of NGen’s industry-led governance approach – driven by NGen’s leadership – which has enabled flexibility and alignment of the Cluster’s focus with industry needs.
Challenges: There are a number of areas where additional policy interventions or refinements could enable NGen to both more effectively deliver on the core objectives of the Cluster – developing advanced manufacturing competitiveness in Canada – and complementary government strategic objectives, such as sustainability and resilience. First, while collaboration is a central pillar of NGen’s activities and funding decisions, there remains scope for better, more strategic collaboration within and between other GIC clusters; the rationale also extends to the coordination of NGen with other STI policy initiatives at the federal and regional levels. NGen provides significant commercialisation and scale up support to cluster members – these are key priorities for NGen and a focus on commercial potential is central to funding decisions. Yet firms nevertheless encounter commercialisation and scale up challenges, and cluster participants frequently raised areas where they felt additional support could be impactful, including further development of international partnerships, ensuring alignment with and contributions to international quality infrastructure, and more opportunities for scaling-up mid-TRL projects.
NGen has made considerable efforts to improve the innovation ecosystem for cluster participants. Nevertheless, there remain ecosystem issues where NGen could create additional positive impacts for participant firms, particularly around shared infrastructure and ensuring complementarity with Canada’s vast array of federal and regional innovation ecosystem initiatives. As discussed in the complementary policy paper (OECD, unpublished, n.d.[3]), monitoring the impact of industrial policy initiatives is historically difficult, and doing it effectively is critical to justifying the rationale for policy intervention. The managing authority, NGen, collects numerous indicators to assess its performance, some of which are presented in Error! Reference source not found.. Ensuring that the indicators collected and analysed by NGen captures the full scope of programme benefits, particularly where these do not immediately accrue to NGen’s ecosystem participants but to other government objectives (e.g., lowering carbon intensity of industrial output, circularity, resilience), is a challenge. At the same time, the lack of a robust collection of performance indicators from other federal and regional innovation support initiatives complicates the task of assessing NGen against its own success criteria within the broader policy support framework in Canada.
The GICs were launched as a component of Canada’s 2017 Innovation and Skills Plan, which aimed to position the country as a global leader in innovation. While GICs are not formally part of the many national strategies that have been launched by the Government of Canada in the intervening years, the capacities of GICs have nevertheless been leveraged in the context of other strategic policy objectives. GICs are utilised as institutional mechanisms for the dissemination of funding in key strategic areas. For example, Canada’s National Quantum Strategy has provided funding to NGen and the Digital Cluster to accelerate technological advancements through industry-led collaborative projects; a similar approach with NGen has been taken by the Canadian Space Strategy and the Pan-Canadian Artificial Intelligence Strategy.
In some instances, new government strategies address similar core themes as the GICs but do not directly reference them. For example, the Canadian Critical Minerals Strategy, launched in 2022, highlights the importance of advanced manufacturing as a strategic pillar of a future critical minerals mining and processing industry but does not explicitly reference NGen or other GICs. This does not preclude the ability of industry stakeholders collaborating across both programmes, but it does indicate that the networks and capacities that have been created through NGen do not yet feature as a potential lever for systemically advancing strategic policy objectives that are linked or adjacent to advanced manufacturing.
All GICs are governed by two-tiered governance systems. At the top level, Innovation, Science and Economic Development Canada (ISED) is responsible for the establishment of the programme, providing funding, and overseeing how GICs administer their funding. In addition, they coordinate and explore synergies with other ISED innovation programming, such as the Strategic Innovation Fund (SIF), recently updated as the Strategic Response Fund (SRF), which funds cluster networks in niche sectoral areas. At the second level each cluster operates as an independent not-for-profit entity with its own industry-led board of directors, responsible for strategic direction, governance, and the management of GIC funding. The not-for-profit status of the management entity is shared across each of the clusters and was considered by ISED to be important to the ability of the cluster to establish a space in which different industrial stakeholders, both large and small firms, could collaborate on pre-competitive technology development. However, this status also came with certain costs, including significant lead times in the initial rollout of projects.
The NGen cluster is an industry-led, non-profit organisation. NGen has a private sector board of directors that sets investment priorities based on strategic opportunities defined by industry. This board includes observers from colleges and universities to ensure a comprehensive range of perspectives. NGen's role includes strategic direction of the Cluster’s activities, including through the programming on and decision-making of funding calls; coordinating the activities of NGen with other cluster initiatives and government funding agencies; ensuring effective collaboration among SMEs, large firms, and research institutions; and providing guidance to its members, and project partners in particular, on innovation and commercialisation efforts. NGen’s governance aims to ensure that the Cluster aligns with industry needs and maximises the impact of investments in advanced manufacturing technologies (NGen, 2022[4]).
The industry-led governance structure is one of the more distinctive characteristics of the GICs, the aim of which is to align the activities and allocation of resources within the cluster with the needs of the sector. NGen operates with autonomy, which has enabled it to adapt quickly and strategically to changing market and technological conditions. For example, NGen was able to pivot rapidly to supporting manufacturing initiatives related to healthcare during the global pandemic. In consultations with the OECD, stakeholders consistently noted that the industry leadership of NGen had fostered a business-oriented focus, ensuring that project selection is driven by practical outcomes and commercial viability. However, the strong industry focus also comes with certain costs. The emphasis on industry-led projects has, at times, limited collaboration with universities and colleges. Academic institutions cannot apply directly for NGen funding, and the funding they do receive as sub-contracted partners in industry-led projects, is subject to industry matching requirements, which can make their involvement more expensive and difficult to sustain.
As with much of Canada’s innovation programming, all five GICs are funded on a five-year funding cycle. The aim of this timeframe is to balance a periodic assessment of the cluster’s objectives and impacts and maintaining accountability; it is not specific to NGen, even if it does create programme-level specificities. The five-year cycle has, for example, been raised by stakeholders as a barrier to long-term predictability, since the inability to plan beyond the five-year mark can hinder longer-term strategic planning of projects and their stakeholders and may lead to a situation where shorter time horizons take precedence over sustainable, long-term goals.
Note: AMHC refers to the Advanced Manufacturing Homebuilding Challenge, PCAIS to the Pan-Canadian Artificial Intelligence Strategy, NQS to the National Quantum Strategy, and ESDC to the Ministry of Employment and Social Development Canada
Source: NGen (2025[2]).
NGen's GIC funding is structured across two main cycles under the Global Innovation Clusters Initiative (GIC) with Phase I (2018 – 2023) and Phase II (2023 – 2028) forming the core of its public funding (83.2% of total funding secured). To diversify its funding sources and ensure long-term sustainability, NGen has also secured additional public funding from funding streams focusing on critical technology areas. These include the Pan Canadian AI Strategy (5.8% of total funding) and the National Quantum Strategy (1.4% of total funding). NGen has also secured dedicated funding from Employment and Social Development Canada, aimed at enhancing skill development and workforce readiness, representing 3.8% of total funding. In the government’s 2024 budget, NGen was allocated an additional USD 36 million (CAD 50 million) from the Homebuilding Technology and Innovation Fund to address housing challenges, such as scaling innovative housing technologies like modular and prefabricated homes. Beyond public funding, NGen also benefits from industry contributions, which are secured through match funding requirements for projects, as well as project management fees. As of March 2025, NGen had secured USD 456.4 million (CAD 636.5 million) in industry contributions, representing USD 1.80 in private investment for every dollar of NGen funding.
The NGen cluster uses a mix of instruments to support innovation and commercialisation of advanced manufacturing technologies, and central to this approach is a focus on funding decisions to target projects with SMEs with strong commercial potential. NGen provides grants and co-investment opportunities, which can de-risk early-stage innovation and encourage firms – particularly larger firms where the alignment between their proprietary R&D objectives and the proposed project may not be immediately obvious. One challenge that may arise in NGen’s approach is linked more to market structure than programme design, in that many of the larger industrial firms in Canada are foreign-owned multinational enterprises (MNEs) rather than Canadian firms, which can complicate the decision-making and incentives for entering projects with locally based SMEs, even if these are de-risked by public financial backing.
While NGen’s members can avail themselves of horizontal innovation instruments, NGen nevertheless provides additional support to members participating in consortia-led projects. These projects, known as Technology Leadership Projects, are awarded through flexible funding calls, which can range from broad thematic areas, such as advanced manufacturing projects, to more targeted initiatives, like moonshot programmes for mining and minerals, or commercialisation efforts for quantum technologies. However, these grants come with certain conditions, including mandatory participation of a SME and matching funding requirements. NGen projects focus on transformative technologies in sectors and technologies such as automation, digital transformation, and advanced materials. In addition to funding, NGen offers strategic guidance and support to help advance technology adoption, develop IP strategies, enhance market readiness, and foster international engagement.
The focus of NGen support often targets mid-levels of technological readiness and therefore involves many pre-competitive projects. The aim of NGen is primarily to provide the conditions necessary for these projects to be technologically validated, including de-risking the participation of firms in this process. NGen’s approach to commercialisation is complemented by targeted support for technology adoption. NGen assists SMEs in integrating advanced manufacturing technologies such as automation, AI and additive manufacturing into their operations, ensuring a link between the innovation output of the Cluster and the preparedness of industry to absorb new technologies and approaches.
Figure 1 illustrates the sectoral distribution of NGen’s approved project funding across two phases. In Phase I (2018–2023), funding was diversified across various sectors, with the largest allocations going to the EV Value Chain (16%), Pharmaceuticals (15%), and PPE (13%). Other significant areas included Advanced Materials (11%) and Medical Devices (9%). In Phase II, starting in 2023–2024, we can observe some new areas of sectoral focus, with increased percentage of funding allocated to Materials Processing (27%) and Electronic Vehicles (18%), followed by Health Care (14%) and Additive Manufacturing (10%).
Note: "MFG" stands for Manufacturing. This term encompasses various types of manufacturing activities, including General Manufacturing (MFG) and Additive Manufacturing (3D printing and related technologies)
Source: NGen (2024[1]).
The funding provided through NGen has significantly supported the innovation activities of SMEs, which generally face more challenging conditions for internally financing R&D, especially where the commercial viability of the project is not immediately apparent. During Phase I, the projects involved a total of 681 project partners, including 370 industry partners, 311 research partners, and over 300 college and university students. Among industry partners, 328 (89%) were small and medium sized enterprises (SMEs) with fewer than 500 employees. For Phase II, NGen launched funding for additional collaborative projects, its Technology Leadership Projects. By the end of March 2025, NGen had approved investments of USD 278.7 million (CAD 389.1 million) in 252 Technology Leadership projects, with total innovation investments expected to reach more than USD 720 million (CAD 1 billion). These projects bring together a broad collaborative network of 979 industry and research partners, averaging almost four partners per project.
A defining feature of the programme is the strong engagement of SMEs. Out of 588 industry partners involved, 521 are SMEs, representing 89% of industry participants and more than half of all project partners. Collaboration extends beyond industry. A total of 391 academic and research partners were invited to participate, including 282 universities, 74 colleges, and 35 research institutes. Taken together, the Technology Leadership Programme highlights NGen’s capacity to catalyse large-scale innovation through SME-driven collaboration, supported by strong research partnerships.
NGen also provides the participants the framework necessary to commercialise the IP produced and offers IP management services, assisting partners with IP assessment, developing commercialisation strategies, and facilitating technology transfer to enter new markets effectively. These services were highlighted by industrial stakeholders in the advanced manufacturing sector as being of critical importance to their participation. In consultations with the OECD, SMEs noted that NGen’s IP strategies had been particularly important to them entering projects and scaling their innovations; to date, NGen has provided IP support to the consortia partners involved in 219 projects, including 181 SMEs since 2023.
Beyond project funding, NGen supports the commercialisation of new technologies by providing SMEs with testbeds, shared R&D facilities, training initiatives for start-ups and SMEs in biomanufacturing and electric vehicle value chains, and other infrastructure necessary to validate and refine their innovations in real-world settings. NGen offers additional SME support through infrastructure access and training initiatives. In 2023-2024, NGen invested USD 13.7 million (CAD 18.5 million) in eligible costs to enhance building ecosystem capacity.
Ecosystem building and creating collaborative innovation are at the core of the NGen’s activities, and NGen is attempting to foster a network that can lead to coalitions of large firms, SMEs, universities, colleges, and other innovation organisations. The ecosystem building approach aims to facilitate cross-sector partnerships in Canada’s industrial sectors, and to accelerate the deployment and diffusion of advanced manufacturing technologies and approaches therein. In consultations with the OECD, several SMEs emphasised that participating in projects with large strategic industrial partners helped them develop, test and scale technologies and develop their business. Larger strategic partners may not have engaged in those projects without NGen support.
NGen only invests in consortium-led projects, mandating the participation of at least one SME. The focus on matching large industrial firms with SMEs and start-ups has led to a number of projects where frontier technologies have been applied for a first time to new industrial use cases. The role of government in de-risking these technology development and deployment projects is clear here: for the larger, strategic partner, they face lower costs and lower risks in trialling a new technology or process which may not have otherwise been core to their proprietary R&D focus and where the firm-level economics may not have made it attractive to explore; for the smaller firm, they have an opportunity to pilot their innovation in a real world scenario, demonstrating the viability thereof and potentially leading to new commercial opportunities. The role of policy in addressing the market and coordination failures set out in (OECD, unpublished, n.d.[3]) is clear. By facilitating these collaborations, NGen helps SMEs use these partnerships for scaling up and encourages larger firms to broaden their collaborative networks. NGen also invests in matchmaking programmes and offers pre-application support to help applicants develop stronger proposals and connect with suitable partners.
Moreover, beyond funding partnerships, NGen supports ecosystem initiatives to build advanced manufacturing capacities across Canada. NGen’s Technology Leadership Projects focus on ecosystem capacity, including shared R&D facilities, testbeds, and specialised training initiatives in fields such as biomanufacturing and electric vehicle production. Additionally, NGen’s Future Ready initiative (that focuses on skills and competencies, approaches to onboarding new workers into manufacturing, including recognition of the existing skills of newcomers to Canada) and the Additive Manufacturing Industrial Demonstration Programme provide direct support to SMEs, helping them explore advanced manufacturing techniques like additive manufacturing.
NGen also developed the NGenCAN cluster accelerator network, which connects 32 advanced manufacturing clusters across Canada. This network facilitates collaboration among cluster members, amplifies the activities of individual clusters, and shares best practices, industry insights, and tools. The network is designed to enhance the innovation capacity of clusters and promote Canadian manufacturing capabilities on an international level. In 2023-2024, NGen also launched a Cluster Accelerator Programme to provide financial support to new and existing clusters, focusing on innovation, commercialisation, sustainability, and workforce development projects. Additionally, NGen’s efforts align with other networks supported by ISED, such as those facilitated through Canada’s Strategic Response Fund (SRF). These innovation networks support collaborative business-led projects in specific sectors like agri-food, mining, and aerospace. For instance, NGen has helped three SIF clusters start up - in food, aerospace, and semiconductors. Their project selection and financial processes are modelled on NGen. ISED has worked to capture synergies between clusters and networks to foster broader collaboration.
NGen aims to address the critical skills gap in Canada’s advanced manufacturing sector through a range of targeted initiatives. Central to this effort is the Future Ready programme, funded by Employment and Social Development Canada (ESDC), which focuses on training, certifying, and placing individuals – particularly from underrepresented groups – into manufacturing jobs. In 2023-2024, the programme enrolled 2,929 individuals, including 1,948 from equity-deserving groups, leading to 2,558 full-time job placements. NGen also engaged 418 companies in its Transformation Leadership Programme (TLP), which helps executives and employees enhance strategic management skills. To address skills gaps identified in the TLP, companies were offered upskilling grants under the Future Ready.
NGen’s talent attraction efforts also extend to young people, Indigenous communities, and newcomers. Through partnerships with organisations like the Student Commission of Canada and Youth Culture, NGen’s Careers of the Future initiative reached over 476,000 students and 1,672 educators to raise awareness of career opportunities in advanced manufacturing. NGen also supported the development and delivery of the Martin Family Initiative programmes that aim to support Indigenous students by enrolling them in entrepreneurship and financial literacy courses. Additionally, NGen partnered with newcomer support agencies and Tech Access Canada to offer recent immigrants the opportunity to demonstrate their skilled trades expertise.
NGen promotes international collaboration by facilitating the participation of Canadian companies in global trade shows and connecting them with international partners at international trade fairs such as Hannover Messe and Formnext in Germany. NGen also organised a national roadshow to recruit Canadian exhibitors for Hannover Messe 2025, and SMEs in consultations with the OECD emphasised the importance of this proactive approach from NGen in creating new commercial opportunities in external markets. NGen also secured partnerships with foreign institutions through its role in international initiatives such as the Pan Canadian AI Strategy (PCAIS), launched in 2017, and the National Quantum Strategy (NQS), launched in 2023. These collaborations focus on scaling and commercialising AI and quantum technologies within the global advanced manufacturing landscape.
NGen has also established a range of international partnerships that support market access, technology collaboration, and ecosystem connectivity. These include partnerships with SENAI São Paulo (Brazil’s Serviço Nacional de Aprendizagem Industrial), the European Innovation Council through the Enterprise Europe Network, Germany’s it’s OWL (Intelligent Technical Systems OstWestfalenLippe) network, Deutsche Messe, the Korea Technology and Information Promotion Agency, and Innovate UK under its international collaboration framework.
NGen’s approach to M&E is embedded in the overarching GIC programme-level framework, it incorporates both quantitative and qualitive indicators tailored to the specificities of each cluster. NGen produces a range of indicators to capture potential impacts, ranging from direct economic outcomes – such as job creation, revenue growth, and IP licensing – to more intangible measures, including skill enhancement, leadership development, and international reputation. NGen utilises internal reporting from participating companies and clusters with external data from Canada’s national statistical agencies.
Short-term outcomes, such as participation rates in programmes like the Future Ready initiative or Transformation Leadership Programme (TLP), are monitored regularly to identify skill gaps, and lessons are reintegrated into the programme design. Meanwhile indicators such as sustained revenue growth, intellectual property (IP) commercialisation are tracked over multiple years to measure lasting economic benefits. Evaluation results directly shaped significant decisions during programme renewals, including increased emphasis on cross-cluster collaboration, enhanced internationalisation strategies, and alignment with key government priorities such as quantum technology and artificial intelligence.
AI has become a central enabler of innovation within NGen’s portfolio. While NGen is technology-neutral in its design, AI has emerged as a cross-cutting capability applied in areas ranging from automotive production and metallurgy to health technologies and additive manufacturing. Stakeholder consultations conducted by the OECD underscored that AI is not only being integrated into specific funded projects but is also shaping how Canadian manufacturers approach productivity, quality, and resilience challenges. To support this trend, NGen has introduced a dedicated sub-cluster, AI for Manufacturing (AI4M), that connects SMEs, large firms, and research partners around AI adoption. Together, these efforts demonstrate how NGen is positioning AI as both a driver of advanced manufacturing competitiveness and a bridge across Canada’s broader GIC initiative.
AI has become a cross-cutting enabler in NGen’s portfolio, supporting quality assurance, predictive maintenance, process optimisation, and design automation across multiple manufacturing contexts. NGen integrates AI by:
Funding collaborative, industry-led projects at mid-TRL (TRL 4–7) that apply machine learning and advanced analytics to concrete production challenges;
De-risking adoption by SMEs through matched co-investment, IP strategy support, testbeds, and access to partners and facilities;
Connecting with federal critical-technology priorities, including funding routed via the Pan-Canadian Artificial Intelligence Strategy (PCAIS), and aligning with Phase II GIC priorities on AI-enabled commercialisation.
To convert AI pilots into production outcomes, NGen couples project funding with:
IP strategy and data-governance support (e.g. background/foreground IP, data ownership and access, licensing models for trained models);
Testbeds and shared infrastructure enabling safe validation of AI-enabled processes;
Skills and workforce programmes that upskill engineers and operators on data collection, model deployment, and human-in-the-loop quality systems;
International exposure (e.g. Hannover Messe showcases) to connect Canadian AI-manufacturing solutions with global value chains.
NGen has recognised that AI is not only a technological add-on but also a strategic capability for transforming production systems. To this end, it convenes a dedicated sub-cluster, AI for Manufacturing (AI4M), designed to accelerate AI diffusion, foster collaboration, and build capabilities across Canada’s manufacturing base. The sub-cluster serves as a specialised community within the wider NGen ecosystem, bringing together technology providers, manufacturers, and research partners to address shared challenges in applying AI to industrial contexts.
According to an OECD interview with an AI4M board member (August 2025), AI4M plays a distinctive role in the ecosystem by:
Brokering partnerships between SMEs, scale-ups, large manufacturers, and research groups, creating opportunities to apply AI to concrete industrial problems such as predictive maintenance, adaptive process control, and computer vision for inspection.
Codifying and disseminating best practices on AI adoption, including data readiness, model validation, and integration into existing workflows.
Lowering barriers for SMEs by showcasing reference use cases, enabling access to testbeds and infrastructure, and clarifying IP and commercialisation pathways for AI-intensive collaborations.
Positioning Canadian manufacturing within global AI networks, ensuring that domestic firms can learn from and compete with international leaders.
Early evidence suggests that AI adoption in NGen projects advances most quickly where firms can clearly identify a pressing operational challenge, such as reducing scrap, avoiding downtime, or overcoming inspection bottlenecks, and combine it with accessible data and a demonstrable return on investment. NGen’s funding model, which requires SME leadership and matched contributions, has helped concentrate project efforts on these high-value, well-defined use cases.
SMEs have proven to be particularly important drivers of AI adoption, contributing specialised technical expertise and innovative algorithms. Larger firms, by contrast, bring access to production-scale data, established industrial processes, and opportunities for deployment at scale. By providing de-risking instruments and neutral IP frameworks, NGen has reduced transaction costs between these actors, making collaborative contracting and experimentation faster and more feasible.
A further lesson is that durable impact depends not only on piloting novel AI applications but also on integrating them into production at scale. This requires attention to change management, model deployment and monitoring, as well as safety and regulatory compliance. Here, AI4M’s playbooks and reference cases are emerging as valuable complements to funding support, offering practical guidance to help firms move beyond pilot projects toward sustained and system-wide adoption of AI in manufacturing.
Additive Manufacturing Industrial Demonstration Programme: This programme, funded in part by NRC-IRAP, accelerates the adoption of additive manufacturing (3D printing) in Canada. Aimed especially at SMEs, it provides support for feasibility studies, testing, and demonstration projects to foster awareness and confidence in using additive manufacturing.
AI for Manufacturing (AI4M): AI4M is a sub-cluster within NGen that brings together manufacturers, SMEs, and research partners to accelerate the adoption of AI in Canadian manufacturing. It focuses on building capabilities, sharing best practices, and supporting collaborative projects that apply AI to real industrial challenges.
Critical Minerals Strategy: Canada’s national strategy, launched 2022, is a government initiative to secure, develop, and grow a sustainable supply of critical minerals essential for clean technology, high-tech industries, and advanced manufacturing.
Future Ready Programme: Supported by Employment and Social Development Canada (ESDC), Future Ready is a workforce development initiative by NGen focused on skills training, career placements, and workforce diversity in advanced manufacturing. The programme targets underrepresented groups, helping bridge skill gaps and promoting a career pathway into manufacturing.
Global Innovation Clusters (GIC): Launched in 2017 (formerly Innovation Superclusters Initiative), Industry-led sectoral clusters that bring together businesses, researchers, and government to drive innovation in five key areas: Advanced Manufacturing, Digital Technology, Protein Industries, AI (Scale AI), and Oceans.
Hannover Messe: A global trade fair for industrial technology, held annually in Hannover, Germany. It brings together global innovators in advanced manufacturing, digitalisation, energy, automation, and robotics, showcasing cutting-edge technologies and fostering international partnerships.
Innovation and Skills Plan (2017): Strategic framework introduced by the Government of Canada in the 2017 Government budget to foster an innovative, inclusive, and skilled economy. The plan aims to position Canada as a global leader in innovation by supporting investments in science, technology, and talent development while addressing skills gaps.
National Quantum Strategy (NQS): A Canadian national strategy launched in 2023 and focused on advancing Canada’s capabilities in quantum computing, sensing, and communications.
Next Generation Manufacturing Canada (NGen): A not-for-profit organisation responsible for managing the Advanced Manufacturing Cluster. NGen provides strategic guidance and support to foster collaboration and innovation in advanced manufacturing.
NGenCAN Cluster Accelerator Network: A national network comprising 24 advanced manufacturing clusters, NGenCAN promotes collaboration and knowledge sharing among Canadian manufacturers and related entities.
Pan Canadian Artificial Intelligence Strategy (PCAIS): Canada’s national strategy in AI launched in 2023 focusing on research and innovation by supporting talent development, research, and the application of AI technologies.
Strategic Innovation Fund (SIF) : Canadian government programme that provides funding to drive large-scale, transformative projects across critical sectors like advanced manufacturing, clean technology, health, and digital industries through support for research and development, business expansion, foreign investment attraction, and collaborative technology projects.
Strategic Response Fund (SRF): Replacing and building on the earlier SIF, the SRF is a new Canadian federal programme, managed by ISED, that provides large-scale investments to help industries innovate, adapt and compete in a changing global economy by strengthening domestic capacity, managing trade and tariff pressures, and supporting transformative projects in strategic sectors.
Transformation Leadership Programme (TLP): Part of NGen’s Future Ready initiative, the TLP is a strategic leadership development programme for Canadian manufacturers. It offers management and leadership training to help manufacturing executives address critical business challenges, enhance operational efficiency, and align their organisations for sustainable growth.
References
[2] NGen (2025), 2024-2025 Annual Report, https://www.ngen.ca/hubfs/NGen_Annual-Report-25.pdf.
[1] NGen (2024), 2023/24 Annual Report, https://www.ngen.ca/hubfs/AR24/NGen_AR24-EN.pdf.
[4] NGen (2022), Five-Year Strategy, https://www.ngen.ca/hubfs/Documents/NGenFiveYearStrategy_EN_V1.0.pdf?hsLang=en.
[3] OECD, unpublished (n.d.), Re-assessing sectoral cluster policies for science, technology and innovation: Historical, https://one.oecd.org/document/DSTI/STP/TIP(2024)11/en/pdf.
This case study was developed in the context of the Working Party on Innovation and Technology Policy (TIP) project “Frontier technology development and diffusion” and with the support of Innovation, Science and Economic Development, Canada.
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