Toronto takes first IT benchmark in five years

Although Toronto ranks as the third-largest technology employer in North America behind San Francisco and New York, issues like tight financing continue to plague the community, according to studies released at Thursday’s TechAction town hall meeting.

One study, “”Toronto Region Information

and Communications Technologies Industry,”” revealed that Toronto has a labour force of 148,000 skilled ICT workers (twice the number of other Canadian cities), and tech companies that have access to a large and fast growing market in the U.S.

Top employers include Accenture, Allstream, Bell Canada, Call-Net Enterprises, Celestica, Cinram, ClientLogic, EDS Canada and Rogers.

Mayor David Miller, who attended the tech town hall, sponsored the Canadian Advanced Technology Alliance, explained that businesses will also be influenced to locate in Toronto because it has invested in the Toronto Transit Commission, has new clean city initiatives, an environmental fund to retrofit city buildings, and has renovated cultural centres like the Royal Ontario Museum.

The first profile of the information and communication technologies sector in Toronto since 1999, the survey looked at privately-owned firms employing at least 100 tech workers based in 14 major cities with a population of at least three million people.

It was conducted by the Greater Toronto Marketing Alliance, the City of Toronto, Ontario’s Ministry of Economic Development and Trade and the federal government’s Program for Export Market Development – Investment.

The report said the city ranked second lowest after Montreal in overall operating costs. It has the third most diverse economy in North America, with an ICT cluster that’s fully merged with the broader regional economy.

Moreover, 65 per cent of ICT firms will invest this year in their Toronto-area operations. Eighty-nine per cent expect to grow at least as fast as the economy in the next five years, and 39 per cent of these firms expect to grow more rapidly. Only 10 per cent anticipate growing slower than the rate predicted for the economy.

Michael Roach, president and chief operating officer of Toronto-based CGI Group Inc., advised the technology community of certain ways to grow the local IT sector. He said there should be more cooperation between industry, government and schools to develop a leading-edge employment pool and centres of excellence, improved quality of life, support of local and Canadian firms so they attain the size to compete globally, and Toronto must become a net importer of outsourcing work.

 

“”Outsourcing offers benefits that transcend the costs . . . and creates a win-win scenario for firms,”” said Roach. CGI, which has been involved in outsourcing since 1985, has 650 employees primarily in India who are involved in outsourcing and by the end of the year plans to bolster this work force to 1,000 labourers.

CGI, which also provides local services for foreign companies, is also “”committed to growing the number of employees”” in Toronto, he said.

As the concept of tech town hall meetings moved across Canada, financing was always cited as a critical issue, explained Peter Doyle, national industry leader, KPMG’s information, communication and entertainment practice in Toronto.

This was also the case in Toronto, according to a CATA survey about global innovation in the city. Grabbing a share of venture capital money and government incentives are the region’s biggest financial hurdles, and these failures have convinced high-tech leaders that their companies will eventually score low points in innovation.

Among the survey’s findings:

  • 42 per cent believe VC firms are unwilling to invest in Toronto;
  • 67 per cent say their bank is not on their side;
  • 13 per cent believe federal tax incentives yield strong benefits;
  • Less than one-third believe Toronto has untapped VC; and
  • Almost half say a company cannot obtain the financing needed here.

Despite the CATA survey’s results on funding issues, the earlier study commissioned by government groups said Toronto has managed to generate annual ICT sales of more than $32.5 billion and annual exports of more than $6.2 billion.

The Toronto TechAction Town Hall is the last of cross-Canada meetings that brought together business, government and academic leaders to spur community growth.

Comment: info@itbusiness.ca

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