For many years, Silicon Valley has been the epicenter of tech. Computer scientists, engineers, and techy entrepreneurs flocked to the area in search of the next great thing. Without a doubt, Silicon Valley remains the mecca when it comes to startups in the tech sector. But that doesn’t mean it stands alone in this regard. Quietly, and in some cases, not so quietly, other areas are luring major tech companies to establish strongholds. In this regard, it’s becoming apparent that the future of Toronto looks to involve tech in a big way. Already, the number of Toronto tech companies has increased substantially.
There are many reasons why major technology firms are looking to escape Silicon Valley these days. In some cases, these companies appreciate a more favorable tax environment when they choose a new destination. In others, they are attracted to states favorable to startups and business. (Have you checked out Bold Business’ list of states favorable to startups?) But Toronto tech companies see advantages from a much broader point of view that includes much more. This is why many foresee the future of Toronto involving a high percentage of tech firms for a long time to come. Indeed, the city has much to offer when it comes to advanced technology.
“Everyone points to Miami as the next tech hub because it offers low taxes. But it offers little else from a tech point of view.” – Mike Volpi, Partner at VC firm Index Ventures
An Influx of Toronto Tech Companies
Going back a few years, some interesting developments took place that laid a path for the future of Toronto. The city is well known for its role played in the boom of artificial intelligence and neural networks. As a professor at the University of Toronto, Geoffrey Hinton and his students published much to the sentinel work in this subject matter. This led to a revolution that utilized the technology in a number of areas that ranged from chatbots to autonomous cars. And Hinto subsequently founded the vector Institute for Artificial Intelligence in Toronto to attract top research talent. These events were critical in attracting new Toronto tech companies.
Among the first of such companies was Google. In 2016, Google established a research lab in the city, aware of an abundance of technology talent. Likewise, in pursuing self-driving cars, Uber also was among the first Toronto tech companies to appear. Since that time, many other technology forms have followed suit. This not only includes major technology corporations like Microsoft, Apple, and Amazon. But it also involves others like Pinterest, Stripe, Klarna, and DoorDash. Based on these more recent developments, it’s clear that tech is going to play a large role in the future of Toronto. And it’s something the city is fully embracing as it moves forward.
“The one thing that was clear for me is that I did not want to go anywhere. The talent is here.” – Raquel Urtasun, Professor of Computer Science, University of Toronto and CEO/Founder of Waabi
A Better Bottom Line and Much More
Several Silicon Valley companies have made the move to other areas in recent years. Some had relocated to Austin and to Miami for warm climates and better tax breaks. Others have been attracted to specific regions due to their concentration of top talent. But Toronto tech companies realize Toronto offers these benefits and much more. Certainly, some of the most formidable research and engineering talent is located there. But at the same time, recruiting top talent to relocate to Toronto is also much easier and cheaper. All of this adds up to a very appealing situation for tech firms and for the future of Toronto.
Consider the following statistics. Toronto is now the third largest tech hub in North America, only behind Silicon Valley and New York City. It is also the fourth largest city with roughly 3 million in Toronto itself and 6 million in the metro area. But most importantly, Canada has relaxed immigration policies that makes it easy to recruit foreign talent to the region. This, combined with the fact major tech universities are in the area, are highly attractive features. Plus, talent in Toronto is much less expensive than in other cities. Compared to Silicon Valley, the average salary for computer engineers is about 40% less. These are the reasons the number of Toronto tech companies are growing quickly.
“It is infinitely easier to bring that kind of talent into Canada. A lot of companies have given up on immigration in the U.S. There are limits to what’s possible.” – Heather Kirkby, Chief People Officer at Recursion
The Future of Toronto in Tech
From the city’s perspective, Toronto isn’t simply assuming tech firms will continue to find the area appealing. It is actually investing heavily in the future of Toronto as a technology hub. The University of Toronto, for example, recently received $100 million donation for a new complex development. This complex will house new startups in AI and biotech, which will keep new Toronto tech companies expanding. At the same time, Ontario recently passed legislation that prohibited enforcement of non-compete clauses. This too encourages existing hired talent to invest in entrepreneurial pursuits in the area. This will not only fuel continued tech growth but likewise retain top talent in the area.
Based on this, the future of Toronto as a technology hub looks incredibly bright. Of course, it doesn’t come close to rivaling Silicon Valley at the present time. Last year, Silicon Valley received $132 billion in startup investments compared to Toronto’s $5.4 billion. But it’s clear that the number of Toronto tech companies are expanding quickly. Talent, cost savings, research, and regulatory infrastructure all favor technology growth in the area. As such, most believe the future of Toronto will be one involving technology and innovation. Based on recent events, these predictions look to be quite accurate.
Want to leverage offshore capabilities for business process outsourcing? Bold Business has you covered.