1. The Greater Toronto Area “The Silicon Valley of the North?” Analyzing the Toronto Region’s growth as a Knowledge Based economy UP 539 Regional Economic Development. Fall 2004. Bankim Kalra

2. Road Map Research Question Research Question The Context The Context Geographical Geographical Demographics Demographics Economic Economic Moving from Region to Industries- Economic Analysis Moving from Region to Industries- Economic Analysis Cluster Development Cluster Development Recommendations Recommendations Conclusions Conclusions

3. The Context Source: Dropping Canadians: Greater Screening South of the Border Results in 40% Decline in Numbers of Canadian Immigrants Admitted South of the Border in 2003 http://www.acs-aec.ca/Polls/18-10-2004-2.pdf  Canada’s economic and cultural capital  Supports a population of roughly 5 million people  Location: Proximity to the U.S. border  Largest immigrant receiving city-region in the world

4. Research Questions Hypotheses: Toronto’s USP is a ‘global city’ based on the foundations of ethnic diversity and a knowledge based economy. An attempt to conduct a preliminary study of the region’s potential to develop into the “Silicon Valley of the North” employing an empirical quantitative evaluation of the data on the role of information technology in the industry structure. Does the marketing image match with reality? If yes, what strategies would Toronto want to implement in order to capitalize on the dynamic industry clusters? If no, what could be the potential industries the region could capitalize on for its growth?

5. Data and Methodology  Labor market, employment and demographic data obtained from Statistics Canada.  Time: 1986, 1991, 1996, 1998, 2001, 2003  Comparison with the nation- Why?  Two, Three and four digit level NAICS information  qualitative analysis, this research is based on the reports prepared by consultants and academia in the in-depth analysis of the region.

6. What is the GTA?  Greater Toronto Area- Includes the city of Toronto and 24 surrounding municipalities in the regions of Durham, York, Peel and Halton.  Geographically: Situated on the northern shore of Lake Ontario in the province of Ontario The GTA produces nearly one-fifth of the entire nation’s GDP The GTA supports a population of 5 million residents It consists approximately 40% of Canada’s business head offices

7. Demographics

8. Demographics: Immigrants 40% of the GTA’s population is foreign born (1996 Census) 47% of the city of Toronto’s population is foreign born

9. Demographics: Age & Education 11.3% of the total population 65 years and above (2001) Median Age: 36.2 years 1991 2001 Aging population

10. Education The percentage of the population 25 years of age and over who have completed university, increased from 24.1 per cent in 1996 to 32.7 per cent in 2001. (Statistics Canada, Census 1996 and Census 2001)

11. Employment and Labor Force Employment Size: 2.7 million Labor Force: 2.9 million Unemployment Rate: 8% Participation Rate: 70%

12. Industry Share of Employment by Industry Services-71% Manufacturing- 15% Transportation-8% Construction- 6%

13. Summary  High concentration of immigrant population- 40% foreign born  Aging population- in the next decade a labor shortage projected  Well-educated population  Service Industry is the primary employer. Manufacturing still a thriving industry  Within services- Retail, Business and FIRE  Manufacturing- Food, Beverage and Tobacco followed by Computers and Electronics

14. Industry Analysis “Moving from the region to industries” Road Map Shift-Share Analysis Location Quotients Economic Base Analysis

15. Shift Share Analysis Construction, business services, health care and social services, FIRE and education are growing faster than the national average The negative industrial mix component indicates that the local economy grew slower than the national average.

16. Shift Share (contd…) The region added a greater share of employment growth than the nation.

17. Location Quotients Manufacturing Transportation & other utilities FIRE Business Services Accommodation and Food Services

18. Manufacturing Industry Share of Manufacturing Employment (1987-2003)

19. Business Services Industry Share of Services Employment 2001. Source: Statistics Canada, Labor Force Survey 2001; City of Toronto Economic Development Division, Labor Force Readiness Plan. Legal services followed by advertising and related services (LQ= 1.83) were the largest exporter with the third position for computer systems design and specialized design services (LQ=1.55).

20. FIRE

21. Trade- Retail and Wholesale Wholesale Retail

22. Economic Base Non-Basic Industries Agriculture Mining, Oil and Gas Extraction Educational Services Health Care and Social Assistance Accommodation and Food Services Public Administration Other Services (except public administration)

23. Cluster Development Knowledge Based Economy- Information Technology: ICT Cluster Manufacturing Development Services ICT Technology Markets in the Region. Source E&B Data In 2001, there were approximately 170,000 IT workers in the Toronto region. Roughly 7% of region’s total employment The majority of IT workers are employed outside the Information and Communications Technology (ICT) industry. The financial services industry, in particular, is a major employer of IT workers.

24. Competitive Advantages  Low Operating costs- Canadian exchange rate & Lower salaries for skilled workers  Highly skilled and concentrated labor pool  Location and proximity to the U.S. border  Quality of Life ICT Labor Force, 2000 Source: E&B Data, based on Statistics Canada 2001

25. …..the other side of the story The Workforce for this Dynamic Knowledge Based Economy??? Aging Skilled Labor at Managerial Levels and Skills Shortage Sources of labor supply: Immigrants, young population, career changers, internal migration

26. Immigrant Population Industry perspective Lack of Canadian experience Language Barrier Accreditation and Professional Association recognition issues Emigration to the U.S of both Canadians and immigrants Immigrant Perspective Underutilization of talent- Highly educated workforce in survival jobs Claim that they were not shown the true picture

27. Challenges Source: Toronto Labor Force Readiness Plan, GHK International. Lack of A “Focal point for IT”- e.g. Xerox Research Park in Silicon Valley Universities of U.S standards that might attract more international students Aging transportation Infrastructure Under-representation of women in the industry

28. Economic Development Strategy Recommendations  Build on the high skilled immigrant pool On-job training and apprenticeships Ease the procedure for accreditation of qualifications- maybe in the country of origin English language and business communications training Utilize ethnic networks and possibilities for off- shore networks- Self-employment  Strengthen the local clustering in Toronto

29. Conclusions and Further Research  Knowledge based economy in the Toronto region is present but not matured  Given the advantages and influx of high skilled immigrants, the ICT sector should be the focus of economic development strategies while building relationships with other traditional sectors such as services and manufacturing (e-health, e- learning, digital media and films)  Increase the participation and training of women in IT sectors  Promote Universities- Industry partnerships

30. Research  The next step is to qualitatively assess the GTA’s business networks, professions and ethnic clusters- based on Anna Lee Saxenian’s model.  How to capitalize on the Immigrants labor pool and strategies to integrate off-shore networks and sources with the information technology sector?