The unstoppable force: why Toronto's tech boom is not slowing down

February 23, 2022

The Toronto Tech Boom

Source: Frame Stock Footage/Shutterstock

One of the main reasons for Toronto's success in the global tech stage is its investments in deep tech

The hype is real! Toronto is now a go-to place for innovation in technology and has shown signs that it will continue to keep it this way.

That is all very curious as only just a decade ago, Canada was forced to watch its plans to build a tech hub get flushed down the drain due to competition from Silicon Valley. During that period the country also found itself losing out on talent, venture capital investments and startups to its southern neighbour.

But the situation today is quite the opposite. And that is why we are going to explain Toronto's phenomenon and the expectations for its growth.

Toronto is not alone, it is part of an innovative tech corridor

The Toronto-Waterloo Corridor

Toronto has become what it is also because of its neighbour. The city is part of a technology corridor in the province of Ontario along with the town of Waterloo.

The Toronto-Waterloo Corridor charts an impressive 112 km of innovation. This is possible thanks to the incredible figures found along this path.

Numbers of the Toronto-Waterloo Corridor

One of the top 20 global tech clusters

This accomplishment guaranteed the area its title of second-largest global tech cluster, behind only Silicon Valley but the triumph doesn't stop here. The Global Startup Ecosystem Report (GSER 2021), a niche study benchmark, ranked the tech clusters worldwide based on Performance, Funding, Connectedness, Market Reach, Knowledge and Talent.

With all those factors put on the table, the Toronto-Waterloo Corridor ranked globally at the 14th position out of the top 20 tech clusters.

Toronto-Waterloo - Global Startup Ecosystem Report

The Toronto-Waterloo Corridor excels in areas such as Funding, Connectedness and Talent. This means that startups based in the corridor will have easy access to investment and talent, and will be within an active tech community.

However, Toronto-Waterloo still has a lot to improve on the Knowledge and Market Reach criteria. The former refers to the patent activity, while the latter shows the current ability of startups to go global. But it is interesting to note how this matches the characteristics of the technology sector profile that has been developed in Toronto. This leads us to the next reason to believe in the continuation of the Toronto tech boom.

A go-to place for deep tech

Much of Canada's tech ecosystem is populated by companies willing to disrupt the industry. Toronto has become the home of startups focused on deep technology such as blockchain and artificial intelligence. That is why we can say that such initiatives aim for results much more in the medium and long term.

Deep Tech in Toronto Source: Frame Stock Footage/Shutterstock

This characteristic makes Toronto a much more likely place to receive investments; after all, everyone wants to bet on higher expectations. And at the same time, this creates much more motivation in skilled tech workers, as they will be able to encounter more rewarding challenges.

Emerging companies reshaping Toronto's tech sector

Taking a closer look at this scenario, let's highlight the Toronto HQ-based companies that received the most venture capital investments in 2021 below.

Emerging Companies in Toronto

As you can see, most emerging startups on the list are in disruptive technologies such as AI & Machine Learning. Xanadu, for example, is one of the most innovative companies around. Its primary goal is to develop quantum silicon photonic chips bringing quantum computing to today's hardware and users.

STEM Talent is abundant and diverse in the city

The province of Ontario is responsible for an impressive nearly 55,000 STEM grads per year; a top-five result in all North America. Most of these come by way of the University of Toronto, the best-ranked higher education institution in the country.

Top Universities in Toronto

The universities located in the city offer a wide variety of courses and those with a technological profile are very popular. It's no wonder why so many of Toronto’s brightest tech talent boasts an alma mater that comes from its top four colleges, according to The World University Rankings - Times Higher Education (2021):

  1. University of Toronto
  2. York University
  3. Ryerson University
  4. Ontario College of Art and Design University

University of Toronto 

The University of Toronto is recognized for the excellence of its engineering and law schools. 

Ryerson University

Ryerson University has some of the best business programs and recognized master's degrees like the Master of Science in Data Science and Analytics and the Master of Science Computer Science.

York University

York University leads among Ontario faculties as the premier in the Communication and Media Studies field. It is an institution with an image of delivering rapid employability to recent graduates.

Ontario College of Art and Design University

The Ontario College of Art and Design University is the largest and oldest (1876) art university in the country. It is a famous hub for innovation and creativity. Also been highlighted as an excellent incubator for business and research projects.

STEM grads keep increasing

It is necessary to look at the past decade to understand what has happened. From 2010 to 2018, the total number of STEM graduates increased by 51%, according to the country’s Council of Ministers of Education (CMEC).

Improvements in immigration programs to attract skilled tech workers and the excellent quality of life provided in Canadian lands has made the workforce profile abundant and diverse — a positive effect that is vital to the Toronto tech boom.

The cost of living is incomparable

Toronto is comparatively an inexpensive city. This counts a lot when attracting and retaining talent and, consequently, generating new business opportunities. We are even more sure of this when comparing Toronto with the other cities listed below in the Global Startup Ecosystem Report.

Cost of Living Plus Rent in Toronto

According to the data crowdsourcing website, Numbeo, Toronto places only behind Beijing and Shanghai, making it the Western city with the best cost-of-living among today's top tech clusters. This is another good reason why the Toronto tech boom will not end soon.

VC and public investments are strong and consistent

In our latest article on Canada's tech industry success, we show how the country has achieved the best mark in closed deals and venture capital raised. Toronto, as expected, was the city with the best performance, attracting a total of 4.4 billion dollars in investments.

Investments from Silicon Valley

Much of this capital migration to Toronto has been thanks to Silicon Valley companies opening new offices in the Canadian city. Databricks, for example, recently opened a whole new engineering hub in Toronto. Instacart is another company to expand to Toronto with a tech hub focused on research and development.

Canadian headquarters are a way to maintain a bigger presence in North America, without the usual costs of expensive cities like San Francisco, while making it possible to continue competing in the same tech markets.

Public initiatives are helping the Toronto tech boom

These new movements by large companies are also a result of government investments and efforts in facilitating the entry of foreign tech workers into the country.

And yet, it is necessary to recognize the city's efforts to meet the global sustainability agenda, which creates a more cohesive environment for new projects, technologies and funding. Toronto has shortened its deadline to zero carbon emissions by 10 years, expecting to reach its goal in 2040.

We can help you land in this amazing northern tech hub

Toronto has been the new land of opportunity for digital innovation. All the factors discussed play in favour of the city's enormous potential to be the next digital pioneer.

Obviously, this will attract the interest of many entrepreneurs and tech giants. But how can you expand your business amidst Toronto’s tech boom momentum and stay ahead of the competition? One way to do so is by working with an Employer of Record. Here at Airswift, our Global Employment and Mobility team have extensive experience in providing all the services you would expect (and more) from an industry leader in workforce solutions.

Global Payroll Outsourcing, Global HR Consulting and Global Employment Outsourcing (GEO) are some of the many assistances we can deliver within our expertise.

Get in touch with us today so that we can support you in your goals for business growth and work with you to put together a custom strategy for your company.

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This post was written by: Raphael Santos, Content Marketing Coordinator