When I first began my career back in 1988, Toronto played home to a large pool of software developers and computer engineers working mainly in the IT departments of large organisations such as banks and phone companies. At that time, however, few local opportunities existed in which these professionals could apply their skills to build world-class software companies. Happily, the city has since grown into one of the largest technology hubs in the world, attracting world-class talent, a host of venture capitalists, and even earning the nickname, “The Silicon Valley of the North”. Here are five reasons why Toronto is fast becoming the tech scene to watch:
1. In 2017, Toronto created more tech jobs than the Bay Area, Seattle, and Washington D.C. combined.
Last year, Toronto emerged as the fastest-growing market for tech jobs in North America, according to a survey by CBRE Group Inc. An impressive 28,900 new tech jobs were created, up 14 percent compared to the previous year, which means there are now 241,000 people working in the sector today. Seattle came second with 8,200 jobs created, while the Bay Area only created 1,100 new tech jobs in 2017. In other words, there are more opportunities available in Toronto than there are in established tech hubs such as Silicon Valley and Seattle.
2. The Toronto area is home to a number of world-class universities that act as incubators of talent.
The Toronto-Waterloo Region Corridor might not have a sexy name, but that hasn’t stopped it from playing a significant role in Toronto’s success as a leader in the tech space. A report analyzing start-up ecosystems around the world ranked the corridor as one of the 20 strongest in the world, thanks to “leading research taking place at its 16 universities and colleges.”
On top of that, the report singles out several areas in which Toronto excels, including artificial intelligence and big data, FinTech, and advanced manufacturing and robotics, which are all experiencing significant growth and innovation.
In addition to benefiting from the research and resources of these universities, tech companies also have the opportunity to recruit recent graduates, ensuring a steady influx of new talent.
3. Toronto builds and attracts great talent…
Toronto is one of the best places in North America for tech talent, according to CBRE’s annual Tech Talent Scorecard. The rapid growth of its tech scene, along with the vast number of new tech jobs created, contributed to the city being ranked above New York and Montreal for example. As mentioned earlier, its close proximity to some of the continent’s best universities ensures a steady flow of talented, qualified professionals, as well as new generations of innovators ready to make their mark on the world.
On top of that, the historical brain drain of talent leaving Toronto has now actually been reversed. Toronto-based companies have recently seen an increase in the number of international jobseeker applications, which shows that not only does Toronto create talent, for many reasons, it also attracts it.
4. …at lower costs to companies
Meanwhile, despite continued demand for qualified workers and the relatively high salaries that Bay Area workers command, an increasing number of tech executives are either leaving Silicon Valley or plan to in the near future. According to the Census Bureau, in 2017 several counties saw their largest combined domestic outward migrations in ten years, while a recent survey by the Bay Area Council revealed 46% of local residents said they plan to leave in “the next few years” (up from 34% just two years ago). The reason for this exodus? The increasingly high cost of living.
In a recent survey of employees from 13 Bay Area tech firms, 60 percent of respondents said they couldn’t afford to purchase a home in the vicinity. Not only does this put more pressure on companies to provide higher salaries; it could also reduce the available talent pool.
As a result, Toronto is emerging as a much more cost-effective hub, blessed with a large number of qualified professionals and a significantly lower cost of living. According to the CBRE Group survey, in 2017 the average tech wage in Toronto was USD83,200 per annum, compared with San Francisco, where the average salary was USD125,400 – almost half again. This means the cost of hiring top talent in Toronto is considerably lower than elsewhere in North America.
5. More VCs are investing in Toronto companies.
While a significant percentage of investments being made in Toronto still originates in Silicon Valley, we’re starting to see an increasing number of homegrown venture capitalists are looking to invest in local talent. And, as the number of seasoned tech veterans continues to grow, so will the number of successful companies, until Toronto becomes a hub to rival all other hubs.
There are several new venture capital funds that have taken an interest in local talent in recent years, including Portag3, Diagram, Highline Beta, Georgian Partners, and OMERS Ventures. In addition to providing funding, these VCs also provide much-needed advice and guidance to startups, thereby ensuring companies have everything they need in order to succeed.
When combined, these five critical factors have worked together to transform Toronto into one of the hottest tech markets in North America, if not the world. At OANDA, we are particularly proud of our Canadian roots and we’re excited to watch our home city mature. Toronto has consistently shown itself to be at the vanguard of new industries and innovation, and as local startups continue to access the talent, capital and expertise they need, this will likely be the case for years to come.
Chief Technology Officer, OANDA
Based in Toronto, Warren Faleiro is OANDA’s Chief Technology Officer, responsible for driving the company’s product development strategy and providing technical leadership across all areas of the business. With more than 30 years of experience extending from Toronto to the San Francisco Bay area, he has worked for some of the world’s most innovative companies including FreshBooks, Danal and Verisign. Warren holds a Bachelor of Science in Electrical Engineering from the University of Toronto.