Why Toronto is the Fastest Growing Tech Hub in North America.
The secret is out — Toronto’s tech scene is no longer under the radar. Year after year, the Canadian city has climbed its way up the tech talent power rankings. Just last month, Bloomberg got out the megaphone and announced Toronto amongst the world’s best tech hubs.
The following post is part of a series that explores the Canadian tech communities where we operate. You can read the first post of the series, which explains why we choose to help companies build remote teams in Canada, here.
The city created 28,900 tech jobs in 2017, 14 percent more than in 2016, and up 52 percent over the past five years. Toronto’s additional tech jobs in 2017 totaled more than the San Francisco Bay, Seattle and Washington, D.C. markets combined.
Such a vibrant tech community cannot be created overnight. The most important component to Toronto’s recent success is the city’s long track record of the right mix of culture, education, diversity, and talent that a tech hub needs to thrive. This complex and unique combination is the reason why Terminal jumped at the chance to work in Toronto. Despite its massive growth in 2017, we believe Toronto will continue to flourish as a tech community. Our involvement aside, here are a few key reasons why:
Dedication to Developing Talent
The Toronto area is like a well-managed football club. Barcelona, Chelsea, Juventus — these are clubs that secure quality and longevity by investing in the development of young players and provide different arenas for them to hone their skills on their way to becoming top-tier pros. Some clubs spend 10 years training young talent. Lionel Messi, for example, started training with Barcelona when he was 13 years-old. The Toronto area is raising the same kind of superstars to compete on the international tech pitch through its universities. The University of Toronto and the nearby University of Waterloo create a 1–2 punch for best computer science programs in the country. Their alumni network is chalk-full of big tech names like Geoffrey Hinton, Alan Cannistraro, and John Baker. At international competitions, the universities trade blows and often beat the best that America has to offer including MIT, Stanford, and Harvard.
Their co-op programs allow students to hone their skills at a professional level early in the game and gain invaluable real-world experience. The UT program is 12 to 16 months, providing students enough time to become involved in large-scale projects, build relationships with employers, and reach professional milestones. Waterloo, which is widely believed to have the best co-op program in the world, requires six semesters in the field. Both programs typically allow students to earn a salary along the way, which helps minimize college debt. The average American leaves school with $39,400 in debt. Less debt eases the pressure on graduates to follow career paths that can help pay off debt faster and choose a path for which they are passionate. It also means they can afford a home or other things that increase quality of life faster.
To help students step into entrepreneurship, both UW and Toronto offer two effective accelerator programs — Velocity and the Creative Destruction Lab. When asked during an interview about the Ontario tech scene, Alan Cannistraro took special note of the added value of the programs. “They nurture entrepreneurs. I am blown away by the drive of people coming out of the program now to start their own companies and I think that’s a direct result of the universities choosing to focus on that.”
Strong university and entrepreneurship support programs create a cycle that fuels growth within the tech community. Local grads start companies and mentor younger entrepreneurs, and the cycle continues. Over the years, Toronto and KW have created an environment that is full of disruptors and innovators whose influence spans the North American tech scene. According to the CBRE report, there was a 60 percent growth in CS degrees last year, which puts the universities in the position to continue and expand the trend.
Quality of Life
While academic and job opportunities may encourage locals to stay put, it’s the quality of life that keeps them there. When you weigh factors such as cost of living, public transportation, business environment, politics, and safety, Toronto is a world-class city. The fourth largest city in North America, Toronto consistently makes the international list of top places to live. In 2017, The Economist ranked it the fourth safest place in the world. The locals, however, will tell you that it’s the plethora of things to do in the area that give Toronto such high marks on the livability and quality-of-life scale.
The city of 2.8 million boasts 177 theaters, 41 museums, 43 registered art galleries and eight concert halls. The average cost of buying a home is $326,000 less than Vancouver, the country’s most expensive city. On top of a vibrant art and music scene, Toronto adds a level of diversity that few cities have. 51.5 percent of residents are considered part of the “visible minority” population.
Local Companies and Investment Provide Opportunities to Grow and Opportunities to Expand the Global Horizon
The Bloomberg piece talks about an influx of new roles, but it doesn’t speak to the local companies that are helping to grow junior tech employees into senior employees.
It’s true — Toronto doesn’t have a unicorn, but that doesn’t mean there aren’t plenty of impressive workhorses. D2L, for example, employs over 750 employees. FreshBooks employs over 250. Wealthsimple raised over $51 million earlier this year and is adding employees at a neck-breaking pace. Outside of making a name for themselves on an international level, these companies are either creating opportunities for younger people to level up to management roles or bringing in outside professionals that further enrich the local tech community.
According to PwC Canada and CB Insights’ latest report, total venture capital funding to Canadian tech companies in Q1 of 2018 increased 52 percent, with $1.28 billion ($1 billion USD) invested. Surprisingly enough, one of the major players in funding these local startups is the Ontario Municipal Employees Retirement System pension fund (OMERS), which manages over 450,000 current and retired civil servants. Most notably, OMERS has invested in companies such as Wattpad and Interaxon. Bottom line — there are well-funded local companies that create the perfect environment to help tech talent grow over time.
As important as it is to have local talent build local companies that are funded by local sources, American investment inevitably adds to the tech environment. Big name companies have allocated investment from home soil and infused it into their northern neighbor cities. Salesforce announced that it will invest $2 billion in its Canadian operations. Amazon is considering Toronto as its second headquarters. Companies like AirBnB, Facebook, Google, and IBM have had satellite offices in Toronto for years. Our company and others like it help round the ecosystem as well. Opportunities to work on projects once reserved for talented individuals willing to move to Silicon Valley are now open to the world. Right now, Toronto Terminal Members are working with cutting-edge companies like San Francisco based facial recognition software company, Ever AI. In general, the fusion of local and global projects creates a complete set that offers tech workers the chance to work with companies of all shapes and sizes. Who doesn’t want those options?
Overall, what you find is a level of cohesion in the Toronto area that you can’t find in many other tech-focused cities in the world. We’re happy to be a part of it. The future is bright.