Toronto Global

FDI & Talent Attraction: Is the Toronto Region ready to embrace the (semi-)remote work revolution?

Nadine Oliver — Wed, 11 May 2022 23:40:00 +0000

As the future of work moves toward increasingly common remote/hybrid arrangements – shifting activity away from downtown cores and toward housing-friendly suburbs – strategies for attracting talent, FDI, and overall local development will have to evolve accordingly. Competitiveness here means forward-thinking around how to create a larger regional landscape conducive to that desire for flexible working arrangements that top talent has come to expect. For talent-driven economies, it’s an identifiable advantage to claim their region is equipped to understand, respond to, and support a range of work models – especially, flexible, semi-remote hybrid arrangements.

While individual talent can be quite mobile, the communities and the institutions that support them aren’t. This keeps many workers within a loosened proximity to the city of their employer, but not so far as to prevent the occasional commute. Correspondingly, economic activity shifts away from the downtown to the surrounding municipalities.

Compared to pre-pandemic levels, the City of Toronto has 80 percent less foot traffic to office buildings, according to Avison Young’s Vitality Index. At the same time, census data analyzed by the Toronto Region Board of Trade suggests that a growing number of people are settling outside of the two largest cities in the region – the City of Toronto and the City of Mississauga – while smaller cities within the Toronto Region and larger ‘Innovation Corridor’ region (Brampton, Kitchener, Oakville, Oshawa, etc.) have seen a population growth higher than the provincial average throughout the pandemic.

While the impact of remote work is yet to be fully mapped and the permanency and severity of these shifts still being debated, it’s clear that the future of remote/hybrid work is going to change the regional labour force’s commuting patterns one way or another. This was already a complicated picture, even before COVID-19, since most municipalities in the GTA already had more residents commuting to work in a different municipality than residents commuting within the same municipality.

There are of course various possible approaches to work policies – hybrid, fully remote, and fully in-person – the adoption of which will vary by industry, by company, and where allowed, by individual preference.

Some companies were early adopters of a fully remote strategy, such as Shopify. Yet other companies are now trending toward a ‘best of both worlds’ approach that exemplifies the competing push/pull factors of urban agglomeration vs. remote work. The benefits gained from proximity to innovation ecosystems are pitted against the employees’ desire for flexible work arrangements, lower housing costs, and access to nature. For example, Google’s campus in Waterloo is both expanding its facilities and simultaneously pursuing a hybrid work strategy. Not remote per se, but ‘remote-ish.’

This new pattern also opens up mid-sized cities to participate in the talent economy on a part-time basis. Richard Florida suggests a quarter of remote work happens outside the home. So then are we due for a rise in coworking, coffeeshops, and networking spaces in mid-sized towns? Could bedroom communities now become micro-ecosystems in their own right? There’s a great silver lining opportunity for smaller cities to creatively repurpose unused or underused spaces to attract remote workers.

In any event, a regional cooperation approach is key to monitoring and understanding these new commuting patterns and their long-term impact. Transit service delivery, taxation policies , amenities and land use planning, pro-remote work legislation, infrastructure investments, ‘workcation’ tourism promotion – there’s plenty of public policy impacts and opportunities that stem from this new workforce reality. This then falls on governments to develop plans to observe and adapt as the re-distribution of their citizens’ live-work-play patterns evolves.

The Toronto Region’s global competitors for tech talent have already begun to strategize how to leverage remote work trends to improve their FDI attractiveness, and are channeling that energy toward reducing regional economic disparities. For example, Ireland is calling on its regions to introduce ‘bespoke offerings’ to encourage remote and hybrid working arrangements and distribute talent away from central Dublin. Of note, in each of the last two years, approximately 40 percent of jobs created by companies Toronto Global has worked with to expand into the region are located within the region’s 905 communities.

For the Toronto Region, where much of these changes are being most acutely felt, these new patterns of regional economies should trigger a rethink on regional strategies. For the many opportunities that remote work offers, it challenges the existing system that ties success and impact of investment attraction efforts to physical real estate footprints. To better understand these issues, there is a need for new or improved metrics, methods, and data to track the impact of remote work in the long term across the Toronto Region – something that can only be thoroughly achieved with intentional, regional effort.

While not all workers can or will adopt a semi-remote arrangement, the more options the Toronto Region can credibly offer employers, the greater its appeal to inbound investment. Those, like Ireland, who are quick to mobilize around this opportunity will enjoy a first mover advantage and lead the discovery of new best practices for regional development.

About FDI

There is a critical need for coordination across the Toronto Region to support and promote FDI and talent mobility on the global stage. Amenities, quality of life, broadband access, and regional transportation mobility will continue to be cornerstones of the FDI attraction toolkit. Yet, newly emerging remote work patterns call for a regional approach to understanding, monitoring, and guiding the impact of remote work for the long-term global competitiveness and resiliency of the Toronto Region.

Doubling Down on the Toronto Region’s Talent Advantage

Ellen Mitchell — Wed, 05 Jan 2022 22:58:00 +0000

Touted as North America’s fastest growing tech market, Toronto continues to attract talent innovative companies from around the globe. Over 81,000 new tech jobs were added to our region between 2016-2020, and there is no indication of that slowing down any time soon. Talent remains the primary factor impacting corporate strategy and is a key driver for location decision making. In the last two years, it has become evident that there is, in fact, a global war for expertise, with companies competing heavily for highly skilled people, especially when it comes to engineering and new technology.

Talent is one of the strongest assets that the Toronto Region has to offer (64 per cent of our population has a postsecondary degree — a higher percentage than any other country in the Organisation for Economic Co-operation and Development (OECD)). Toronto Global is here to help new companies realize that expertise advantage. As we persevere through a global pandemic, our role as an organization is more important than ever. Attracting foreign companies into the Toronto Region ensures that we retain jobs in our community and continue to propel strong economic growth – all with the goal of building a region that is recognized internationally as the best place to live, work, and invest.

Toronto Global’s dedicated team will continue to promote the Toronto Region as the best choice for international business. In parallel, we must also focus on expertise; taking the lead when it comes to ensuring our region’s talent story is front and centre. Canada’s view on immigration remains aligned with globalization and economic sustainability, with nearly 100,000 new people settling in the Toronto Region every year.

Canada welcomes more than 250,000 international students every year. Nearly half of this student body resides in the province of Ontario and upon graduation, this group of international graduates chooses to start their career in Canada – a significant contributor to growing our expertise pipeline. In complement, as a province, we are home to 18 postsecondary institutions that are conducting innovative and ground-breaking work every day, with some of the best researchers in the world. As a region, we stand to compete with other global hubs like London, New York, and Silicon Valley. The goal to bring postsecondaries and foreign companies together will be an important new aspect of Toronto Global’s vision moving forward.

That is why we are thrilled to announce that we are doubling down on expertise. Our aim is to create and facilitate an environment necessary for connecting, attracting, and retaining talent in the Toronto Region. Fostering strategic connections between our organization and the world-renowned postsecondary institutions within our region, we will help to develop the regional talent story, while also ensuring Toronto Global becomes the go-to organization when it comes to talent. Three main pillars will help our clients access the talent they need to succeed:

Connect with postsecondary institutions and internationally recognized researchers

We pride ourselves on designing education programs that deliver job-ready graduates and excel in industry-academic partnerships.

Spark brand awareness and connect with students through Integrated Learning opportunities.

Partner on Research & Development projects.

Co-create learning and upskilling opportunities for students, helping to shape the graduates of tomorrow.

Recruit highly skilled labour

Hire recent graduates and experienced alumni.

Attend roundtable discussions with key players and keep up to date with the latest expertise trends.

Access our open immigration policies. With supportive policies to welcome students and skilled workers from around the world, companies in Canada can access talent that is multicultural, multilingual, and globally connected.

Activate your growth plans

Leverage our research and data, allowing you to select the best location to attract and retain top talent.

Engage our partner networks to enhance your brand, reputation, and ability to recruit top expertise.

Access funding programs to extend your capital runway while onboarding the top talent you need.

Realize the Talent Advantage of the Toronto Region

The entire Toronto Region has a strong expertise pipeline, both in terms of new graduates and experienced professionals. No matter the specialized skill, our diverse and dynamic region gives you exactly what you need to succeed. Whether you are looking to leverage the local talent pipeline, or bring in talent from outside the country, Toronto Global can help guide you through the process.

If you are looking to build or scale a team in the Toronto Region, contact:

Ellen Mitchell
Senior Advisor, Talent Partnerships
emitchell@torontoglobal.ca

Adaptavist continues to grow and attract Toronto’s best tech talent — despite a global pandemic

Erika Lewis — Tue, 10 Aug 2021 22:25:00 +0000

Having doubled the size of its team during the COVID-19 pandemic, agile software solutions provider Adaptavist is now looking to continue the expansion of its Toronto office by onboarding more of the city’s top talent.

Over the past year, Toronto has strengthened its position as a thriving technology hub, attracting tech giants and innovative start-ups from all over the world seeking to benefit from one of the brightest and most diverse talent pools.

Founded in the U.K., global digital transformation leader, Adaptavist was one of the companies that identified the city’s potential early on, expanding to Toronto in 2014. The rapidly growing team doubled in size during the first year of the COVID-19 pandemic, and it’s current goal is to grow even further to support local clients, including the City of Toronto.

Toronto Global worked with it to expand its product development office in Toronto, seeking to capitalize on the technology talent pool in the Toronto Region. Toronto Global provided Adaptavist with introductions to postsecondary institutions for potential partnership opportunities; information on the Toronto Region tech ecosystem, talent availability, tax credits and salaries compared to other Canadian and U.S. jurisdictions; and made introductions within the local business community.

A growing Canada-based team

Since the Toronto office opened five years ago, it has succeeded in attracting some of the best tech talent the area has to offer. “Despite the challenges faced over the last year, we managed to successfully transition to a fully remote working environment, and train and onboard more than 30 new local employees. Our Canada-based team currently accounts for almost 20 percent of our global workforce,” says Harp Athwal, Managing Director of Adaptavist Canada and Global Head of Client Services.

In addition, it‘s Montreal team is still growing and recently moved into a new state-of-the-art office in the bustling Mile-Ex neighbourhood, near many of it’s financial, IT and video game creation clients. Expansion in Calgary, Halifax and Ottawa has begun as well.

“We are a well-supported region within a global team, and in turn, strongly support local talent and professional growth within the company,” says Harp Athwal. “Adaptavist is a great place to build and advance a career in flourishing areas including DevOps, while focusing on our mission to help complex organizations transform and find advantage in a climate of constant change.”

Supporting leading Adaptavist global businesses

Established as the number one Atlassian partner in Toronto and the whole of Canada, it delivers services, products and support to businesses that want to improve how they design, develop and manage their software. Adaptavist’s team helps businesses, including half of the Fortune 500, gain competitive advantage from their software and IT, using tools such as Atlassian’s Jira, Confluence, Trello and Bitbucket, as well as Slack and frameworks such as Agile and SAFe. Additionally, Adaptavist also announced within the last year its partnership with platform GitLab, reaffirming its commitment to digital transformation through streamlined DevOps solutions.

With 50 full-time employees and rapidly growing, Adaptavist’s team in Toronto supports some of the leading organizations across sectors including financial, healthcare, travel and retail, such as Sun Life Financial, Sick Kids Foundation, NDI, and Air Canada.

If you’re interested in joining Adaptavist in Toronto, visit www.adaptavist.com/careers to view the latest job opportunities.

moneycorp Breaks into the Canadian Market with Expansion into the Toronto Region

Erika Lewis — Thu, 13 Aug 2020 19:32:00 +0000

Since 1979, the moneycorp Group has served the growing foreign exchange and payment needs of global businesses, online sellers and personal clients.

moneycorp offers a state of the art online payments portal, while providing its customers the ability to mitigate their foreign exchange risk through a sophisticated suite of FX hedging solutions.

With operations across the globe, this
Online Money Transfer is a leading provider of global payments and currency risk management, delivering high touch service and customized products that put its customers’ business first.

moneycorp’s North American operations has served clients in the U.S. for over two decades, focused on private clients’ money transfers, corporate risk management and global payments solutions.

The company’s recent expansion into the Toronto Region marks a major step in this
Online Money Transfer’s global expansion plans to provide a comprehensive and unique offering to the market.

The Canadian market was attractive to moneycorp for a number of factors. Over 80% of businesses in Canada have some form of foreign exchange requirement and Canadian businesses are particularly savvy in mitigating and eliminating currency risk exposure – a core competency of
Online Money Transfer.

Finally, the decision was strengthened by the high caliber of experienced talent in the industry, located right here in the Toronto Region.
moneycorp was referred to Toronto Global through a service provider in the financial services sector and we worked with the company to deliver an overview of the Toronto Region’s business ecosystem. Toronto Global provided

Online Money Transfer with guidance on the process of setting up a subsidiary in the Toronto Region, as well as insights on employee benefits in Ontario and information on relevant local conferences and events.

The company will work with private clients, such as high-net-worth individuals looking for real estate purchases in the U.S. and abroad. For corporate clients, risk management hedging solutions are essential in these volatile currency markets and moneycorp has a team of seasoned FX specialists ready to meet clients’ business objectives by providing strategies that mitigate foreign exchange exposure.

A dedicated payments team will help companies access the intuitive trading platform, moneycorp online, which streamlines and integrates global payment processing.

About moneycorp

“There are some fantastic cities and areas of Canada, and I have been very fortunate to have traveled throughout Canada during my career, but Toronto is easily my most favourite city,” said Bob Dowd, Chief Executive Officer, Moneycorp North America.

“I know it best as I traveled for business for a week each and every month for over twenty years. I am blessed to have worked with colleagues and customers that grew into life-long friends. Those friendships and memories are all based in Toronto.”

The Toronto Region and the United Kingdom’s Exciting Future

Salman Khan — Mon, 04 Mar 2019 18:53:00 +0000

My role over the last two years has been to attract and support U.K.-based businesses in expanding their operations to the Toronto Region. Having travelled to the U.K. on several business missions to pitch the region as a top destination for investment, I’ve had the privilege of seeing the increase in awareness in the U.K. business community about Toronto. No longer do our British friends identify with Toronto as the city where they have distant relatives, or where they went on vacation when they were six years old. Today, the Toronto Region is on their radar as a place to grow and expand their businesses.

Much of this interest is driven by our existing relationships. For instance, did you know that Canada and the U.K. are the only two countries that are members of the G7, the G20, NATO and the Commonwealth? The U.K. and Canada are the 5^th and 10^th largest economies of the world respectively with a combined GDP of just under USD$5 trillion. The U.K. is Canada’s largest and most important commercial partner in Europe and fifth largest globally, with merchandise trade between the economies standing at CAD$26.5 billion in 2017. The U.K. is Canada’s fourth largest contributor to foreign direct investment in several key sectors, including financial services, infrastructure, aerospace, science and technology. Our major pension funds, like CPPIB, OMERS, OTPP and others, have taken large stakes in assets in such as the London City Airport, Canary Wharf, Burton Biscuits, and even the National Lottery operator, Camelot.

Increasingly, though, the U.K.’s business community has come to recognize the emerging strengths in the Toronto Region. My U.K.-based clients are no different. Over the last two years, they’ve come from a variety of industries and sectors including financial services, artificial intelligence, business services, engineering, architecture, pharma, consulting, and even fire suppression. In fact, in our first fiscal year, just over half of the 27 companies that Toronto Global helped expand to the Toronto Region were based in the U.K. Not surprisingly, my client list is tech-heavy, mainly because these companies, many of which are based in London, are naturally attracted to the Toronto Region because it is a financial services and technology hub. The region, which includes Brampton, Mississauga and the regions of Halton, York and Durham, are known for their manufacturing, logistics and pharmaceutical industries and provide excellent expansion opportunities for U.K. businesses in the Northern Powerhouse cities. Add the high quality talent, connectivity to the U.S., and shared cultural and moral values to the mix, and the Toronto Region starts to sound increasingly appealing – despite our snowy winter!

As businesses in the U.K. look increasingly toward the Toronto Region as an attractive business destination, there are a few things they are focusing on.

Toronto Technology Strengths

Firstly and most importantly, our region has been seeing phenomenal growth over the last few years, especially in the technology space. Not only are existing technology companies in the Toronto Region expanding, but companies from around Canada and the world are building new teams across the region and contributing to the flurry of business activity – much of it driven by our abundance of talent. Although a large percentage of it is home-grown, a significant number of international talent is also arriving at Toronto’s doorstep through immigration, the increase in international students studying in Canada and staying to work here as well as the skill-based visa programs offered by the federal government. It was no surprise then that Toronto saw an unprecedented CAD$1.4 billion in investment in Toronto from Microsoft, Uber and Shopify in the month of September 2018 alone. The Toronto Region’s bid for Amazon’s HQ2 also was of enormous benefit as the region received worldwide recognition when it was shortlisted in the top 20 cities, and was the only Canadian location to feature in that list. Toronto Global was the lead organization for the Toronto Region bid and our bid book was downloaded over 20,000 times.

Brexit and Canada’s Trade Agreements

There’s also Brexit (I can’t believe I got this far without saying the “B” word!). U.K. companies with growth aspirations can no longer expect to access the E.U. market as easily and freely. To generate growth, they have to expand internationally, and Toronto offers a great option given its stability, low-risk, proximity to the U.S. market, a renegotiated NAFTA, and the CETA agreement between Canada and the E.U., giving companies preferential access to the world’s largest economic zones. Canada is the only G7 country that holds free trade agreements with every other G7 country. When the CPTPP trade agreement is fully functional, Canada will enjoy preferential market access via 14 trade agreements to 51 countries with 1.5 billion consumers and a combined GDP of US$49.3 trillion!

The U.K. has also identified Canada as a substantial trade and investment market for the U.K. and has appointed Andrew Percy as the Prime Minister’s Trade Envoy to Canada. It is only a matter of time before Canada and the U.K. ink a bilateral trading agreement once the U.K. formally exits the E.U. This will only strengthen the commercial links between the two allies.

Geopolitical Uncertainty

The second half of 2018 was littered with economic, political and regional instability. Trade wars and barriers between major trading partners such as the U.S., China, and the E.U. made headlines on a daily basis, giving rise to uncertainty for businesses. Canada had its fair share of trade drama as well, which it has now put behind us in the form of NAFTA 2.0. Businesses need certainty to grow, and the Toronto Region is recognized for its stable political and regulatory environment. Brexit in the U.K. and worries about the U.S. are turning companies toward the Toronto Region, where businesses can find the certainty and stability they so desperately need to thrive.

Business Costs
The Toronto Region’s business climate offers highly competitive advantages that make it more cost-effective than other major cities in the U.S. or Europe. The cost for hiring talent in Toronto is very competitive and attractive for employers. At the same time, universal healthcare in Canada means employers do not have to spend an extravagant amount on buying health plans for their employees. In the Amazon HQ2 bid we estimated substantive savings to employers from the provision of a single payer healthcare system. The comparison with the US for companies in terms of health care costs is striking. Canada offers a Scientific Research & Experimental Development program to companies doing R&D in Canada – and it is one of the most generous tax incentives in the industrialized world.

Working with companies in the U.K has been a truly rewarding experience. The friendship and commerce between Canada and the U.K. is steadfast and thriving. Our transatlantic relationship stands the test of time.

If you are a U.K. business exploring international markets, connect with Salman Khan to learn more.

Inside Toronto’s AI Ecosystem

Salman Khan — Thu, 31 May 2018 18:33:00 +0000

Recently, a group of international journalists visited the Toronto Region to learn about our AI ecosystem and meet with some of the key players. I had the opportunity to join them and educate myself about the great things happening in the AI space in Toronto.

Despite the constraints of squeezing the visit into a single day, the Toronto Region was able to curate an impressive agenda to highlight the reasons why AI is thriving here.

The journalists started off with an introduction to Toronto Global, the Toronto Region’s investment attraction agency that has taken up the challenge of attracting foreign companies, including AI businesses, to the region.

Two recent wins for Toronto Global in the AI sector include Samsung Research, which just earlier this month launched its AI Centre in downtown Toronto, and online retailer Etsy, which also announced plans this month to setup a Machine Learning Centre of Excellence here.

Dan Silverman, the EVP of Investment Attraction at Toronto Global, gave the audience an overview of Toronto’s technology sector and spoke about the importance of the federal and provincial governments in building and growing the STEM talent pipeline locally.

He spoke about the Toronto Region’s bid for Amazon’s HQ2 and how, instead of offering tax incentives, the Toronto Region, with support from our provincial and federal governments, offered Amazon a steady pipeline of technical talent.

One of the promises of the Province of Ontario to businesses is to graduate 1,000 more AI Master’s students annually by 2022. This is further cemented by the commitment to increase the annual number of STEM graduates by 25 percent, bringing the total to 50,000 within five years.

After introductions, the first stop on the tour was a visit to Deep Genomics, a Toronto-based startup that is using AI to build a new of universe of life-saving genetic therapies.

Deep Genomic’s CEO, Brendan Frey, a former student of Geoffrey Hinton, spoke about his experience studying neural networks at the University of Toronto and how he was involved in lobbying the government into investing in building the AI ecosystem in Canada.

In the afternoon, we headed to the Vector Institute, located directly across from the first international Uber self-driving research lab. The Vector Institute is based in MaRS, also known as the Discovery District, the world’s largest urban innovation hub that is home to a diverse set of not-for-profits, start-ups and corporations, including AirBnB, JLABS, Autodesk and Facebook.

The Vector Institute recruits AI Master’s and PhD students from affiliated universities to work on the business problems of its corporate sponsors. One of the key purposes of the Vector Institute is to grow, attract and retain AI talent in the region as part of its larger objective to make Toronto a global hub for AI.

Graduates in the AI field from Canadian and international universities now have the opportunity to work on interesting AI problems in Toronto rather than having to make their way to the Valley. The Vector Institute is sponsored by both government and private sector corporations. Founding partners include Google, NVIDIA, Uber, Shopify and Thomson Reuters. The Chief Scientist Officer at the Vector Institute is none other than Geoffrey Hinton, the Godfather of Deep Learning.

About AI Ecosystem

Last but not least, Jordan Jacobs and Tomi Poutanen, founders of artificial intelligence start-up Layer 6 AI, shared why they believe Toronto is the best place to build an AI company. Layer 6 AI works with enterprises who want to predict the needs of customers in real time: for example, a customer looking for a mortgage.

They explained the reasoning behind Layer 6 AI being sold to TD, a Canadian bank, rather than to foreign investors: they wanted to remain a Canadian company and use this opportunity to support AI in Canada and make it a dominant AI player. Both Jordan and Tomi are also co-founders of the Vector Institute.

To learn more about the AI ecosystem in Toronto, come visit Toronto Global at the Canada Booth at the AI Summit on June 13/14. Toronto Global is a not-for-profit government agency that helps international companies expand their businesses to the Toronto Region.

Collaborating for Investment Attraction Benefits Us All

Toby Lennox — Tue, 08 May 2018 18:35:00 +0000

Earlier this year, Toronto Global released the results of an excellent study we commissioned on the regional impacts of foreign direct investment. The study, written by Dr. Richard DiFrancesco and Dr. David Wolfe of the University of Toronto, examined both quantitative and qualitative benefits associated with a greenfield investment made by a company in the Toronto Region.

A copy of the study, which I would encourage anyone interested in urban and regional development to read, is available on our website.

As I discussed in a presentation at a recent Conference Board of Canada conference on regional economic development, while there are many lessons to be learned from the work of Drs. DiFrancesco and Wolfe, three stand out. The first is that an investment in any part of the Toronto Region benefits the entire region in one way or another.

The second is that roughly 75-90% of the value of the investment stays within the region. And finally, international companies are looking for jurisdictions that can match their increasingly complicated and involved international supply chains.

In other words, in order to land an investment, a regional approach by organizations like Toronto Global or Montreal International are better positioned to draw upon the resources of all the municipalities within their respective areas rather than an approach driven by any one single municipality.

These conclusions may seem obvious, and reflect what many already know – the staggering growth of our municipalities has resulted in the blurring of jurisdictional boundaries that were developed many years ago. International business no longer understand or respect these boundaries and simply look to an entire region to provide them with the support, the talent and the resources that they need to succeed.

But does this mean that we simply can ignore the individual attributes and characteristics of individual communities and municipalities as we pitch to multinationals? Does the regional value proposition crush the benefits of a particular city within the region?

In my view, this is certainly not the case. A region is made up of individual municipalities, each of which have created their own culture, their own ethic and their own unique set of assets and attributes that, when taken together, present to international investors a range of choice that can and should never be diluted. If we look at a region through the lens of an international investor, and if the analysis of Drs.

DiFrancesco and Wolfe is correct, then the investor is trying to find a region that mirrors, in all its complexity, its own international supply chain. Therefore, a diverse, variated and multi-faceted regional value proposition grounded in the assets and attributes of all the communities in the region is just the ticket.

This was brought home to me recently as I drove 155kms through the Toronto Region – to a breakfast in Brampton, a stop-off at the office in Downtown Toronto, and off to a lunch in Pickering. Each stage of my journey reminded me of the fundamental value of the assets of the differing municipalities in the region.

Mayor Jeffrey of Brampton, together with the Brampton Board of Trade, was holding what was, in effect, a celebration of the announcement of a long awaited new university in Downtown Brampton. To be developed in conjunction with Ryerson University and Sheridan College, the new campus will be a hotbed of cybersecurity research and development.

This unique endeavour makes a singular contribution to the overall strength of the Toronto Region, Ontario and Canada in cybersecurity, while providing students in the western Toronto Region with a centre of excellence close to home. (As an aside, the announcement in Brampton marked the second of such announcements by the government of Ontario.

As a measure of their commitment to raising the talent bar in Ontario, the province announced a new campus for Wilfrid Laurier University in Milton. Congratulations to Ontario, Halton and Milton on this initiative.)

A few hours later, Mayor Ryan of Pickering hosted what could only be described as a boisterous business lunch featuring a local musical act celebrating the charms of Pickering. But aside from the tunes, Mayor Ryan made a robust statement about the vigorous present and future of Pickering and the Durham Region.

He announced a new entertainment complex – Durham Live! – which promises to change the face of the eastern Toronto Region. He announced new investments by Kubota Industries and a new innovation corridor, all with the promise of more to come. (And we all took home toy Kubota tractors that my young neighbour loves!)

About Investment Attraction

New university campuses. Cybersecurity research innovation centres. New hotel and entertainment complexes. Multinational investments in new industrial parks. All of these are not possible without the individual drive and commitment of each municipality.

And each, in their own way is contributing to the multi-faceted regional offering that international investors will find compelling. Indeed, one hopes that investors will find a place for themselves in this myriad of offerings.

So, while we are inevitably marching toward a more cohesive or integrated approach to building and planning our emerging urban region, it is imperative that each community develops and brings to the table its unique assets, attributes and culture.

And regional organizations like Toronto Global will continue to work to bring these assets, attributes and cultures to the doorsteps of companies around the world looking for a new place to succeed.

Download Presentation

Collaborating for Investment Attraction in the Toronto Region

David A. Wolfe — Sun, 11 Feb 2018 18:40:00 +0000

TORONTO – Feb. 12, 2018 – In partnership with Toronto Global, the University of Toronto’s Munk School of Global Affairs has released a new report, “Collaborating for investment attraction in the Toronto Region,” which outlines the economic benefits of foreign direct investment (FDI) to the entire Toronto Region.

The report was released at an event today, attended by business leaders and economic developers from across the region, with a presentation from the co-authors of the report, David Wolfe and Richard DiFrancesco.

The discussion of report findings was followed by a lively fireside chat with Mississauga Mayor Bonnie Crombie, Former Minister of Economic Development and Growth and MPP, Brad Duguid, and Scott Bradley, Vice-President of Corporate Affairs at Huawei Canada, and was moderated by the Executive Director of the Martin Prosperity Institute, Jamison Steeve.

Please click here to live stream the event beginning at 1pm EST.

The report analyzes a number of FDI projects across the Toronto Region, spanning several industry sectors. The case studies show how firms will often build on their initial investment to broaden their presence across the region and further afield.

Key Findings:

- The model showcases that FDI, regardless of location, benefits the region as a whole. All regional jurisdictions ultimately benefit in terms of employment creation, taxes, the purchase of supplies and services as well as other benefits.

- Between 78 – 98% of the economic impacts of an FDI project (i.e. gross output, employment, wages, and imports) fall within the borders of the Toronto Region, giving some indication that the region truly does operate as an economic entity.

Quotes

“The insights in this report offer strong support for having a collaborative regional approach to investment attraction in the Toronto Region. The scale and depth of the region’s value proposition was a major determinant in its selection as the only location outside of the United States shortlisted for Amazon’s HQ2.

International businesses consider the value proposition of the region overall when making a location decision and, in turn, not only inject jobs and taxes, but more importantly, transform and enhance the regional economy through their connections and investments.”

– Toby Lennox, CEO, Toronto Global

“The leading firms of today weigh location decisions on the basis of what strategic assets regions as a whole – not just particular jurisdictions – can offer them in the context of a highly competitive international marketplace.

Working together to strengthen and promote the region’s business and talent ecosystem will allow each jurisdiction to prosper while creating a winning value proposition for the Toronto Region to attract global firms.”

– David A. Wolfe, Author
Innovation Policy Lab, Munk School of Global Affairs, University of Toronto

About Collaborating for Investment Attraction in the Toronto Region

Toronto Global is an arms-length not-for-profit corporation representing the Cities of Brampton, Mississauga and Toronto and the Regions of Durham, Halton and York. Its mandate is to market the entire region to international investors by promoting the Toronto Region’s diversity of services, sectors and industries, diverse and innovative workforce and strong and stable economy to attract FDI from targeted industries around the world.

Toronto Global’s work will build upon the federal and provincial government’s commitment to growing Canada’s innovation and knowledge-based economies by driving targeted, region-wide economic growth to generate quality skills, jobs and opportunities for Canadians.

Collaborating for Investment Attraction in the Toronto Region – Full Report

David A. Wolfe — Thu, 08 Feb 2018 18:41:00 +0000

Research paper series | 2018-1

February 2018

Executive Summary

Established in February 2017, Toronto Global is a leading investment attraction agency in Canada, and one which is designed to act on behalf of all of the municipalities that comprise the Toronto Region. The underlying rationale for the establishment of this regional agency is two-fold: a belief that foreign direct investment (FDI) in any one part of the Toronto Region stands to benefit all sub-regional municipalities, and an understanding that a collective regional value proposition is stronger than the sum of its parts.

This research paper provides both quantitative and qualitative analysis of the economic impact of FDI into the Toronto Region, providing data-driven support for this rationale. It also contributes to knowledge of how the regional economy operates, as well as an understanding of how both foreign and domestic firms weigh location decisions. These insights highlight how firms at home and abroad view the Toronto Region’s strategic assets, which strengthens Toronto Global’s ability to describe the region’s value proposition to potential investors.

Quantitative Insights

A multi-regional input-output (MRIO) model was used to understand the regional distribution of economic impacts – value added (GDP), gross output, employment, wages, taxes and imports – associated with recent FDI projects in the Toronto Region. The MRIO used in this analysis was specifically designed to consider the unique industrial bases of the regional municipalities that make up the Toronto Region, as well as the inter-industrial interdependencies that exist between them.

The report analyzes seven FDI projects across the Toronto Region, spanning several high value-added industry sectors. These included three investments made in York Region (GM’s Automotive Software and Research Centre, IBM’s Soft-Layer Data Centre and Huawei’s expanded Canadian headquarters focusing on telecommunications infrastructure and networks), two in the City of Toronto (Cisco’s ICT research and development facility and startup incubator and Thomson Reuters’ new Toronto Technology Centre), one in Durham Region (Hans Steel manufacturing facility) and one in Mississauga (Roche’s Global Pharmaceutical Development site). Because large firms rarely announce a specific investment figure as part of a new expansion, the model imputed a value to the investment, based on the number and type of jobs announced by the companies.

The results generated by the MRIO model offer several important insights:

The model showcases that FDI, regardless of location, benefits the region as a whole. While the host jurisdiction sees the greatest share of economic benefits associated with any investment project, all regional jurisdictions ultimately benefit in terms of employment creation, taxes, the purchase of supplies and services as well as other benefits, to varying degrees.
The City of Toronto is typically the second largest beneficiary (after the host jurisdiction) of economic impacts in the examples of investment projects undertaken in other parts of the GTA, reflecting its anchoring role within the region. The magnitude of benefits accrued outside the host jurisdiction is generally proportional to the size of the jurisdiction and diversity of its economy. Being well connected to the host jurisdiction also helps to increase the level of economic benefits other jurisdictions receive from an investment project. For example, Peel Region receives the third largest impact for investment undertaken outside its borders, which can be attributed to its diverse industrial base and high degree of connectivity between the City of Toronto and York Region.
The magnitude of the economic return on investment for a project does not depend on the size or location of the initial investment. Investment projects generating more than a 100% return in value added span all jurisdictions and all investment levels.
Between 78 and 98% of the economic impacts of an FDI project (i.e. value-added, gross output, employment, wages, and imports) fall within the borders of the Toronto Region, giving some indication that the region truly does operate as an economic entity. Importantly, the modelling results suggest that over 83% of the jobs generated by the investment projects remained in the Toronto Region.
The federal and provincial governments receive a far greater proportion of the tax revenue generated by an FDI project than do local municipal governments. The tax revenue collected by the province is roughly three times that of municipal governments (makes sense since the Province and Federal governments derive their revenue from a wider tax base, including income and other taxes not available to the municipalities)

Qualitative Insights

While the Multi-Regional Input-Output (MRIO) modelling is useful for analyzing and comparing the distribution of economic impacts of various FDI projects across the Toronto Region, the approach is static and therefore unable to capture the dynamic impacts that accrue to the region from the establishment of these new operations. The model results do not illustrate, for example, the linkages between industries and jurisdictions and how greenfield investment may affect them over time. These structural changes to the regional economy may represent more meaningful effects than changes in income at an aggregate level can demonstrate.

To address this concern, the quantitative findings were supplemented with a qualitative analysis that included: (1) a review of scholarly literature regarding global outsourcing, the formation of global production networks and regional economic development and (2) in-depth firm-level interviews with many of the multinational enterprises (MNEs) examined in the quantitative analysis, as well as a few others to include investments in additional locations and industries.

The purpose of the literature review and the interviews was to explore the factors that may have led these companies to locate specific operations in the Toronto Region and to examine the extent to which these firms are articulating with local domestic firms and ultimately contributing to the functional upgrading of the Toronto regional economy (and, conversely, the integration of the regional economy into the broader global economic system). The scholarly literature on global production networks (GPNs) and strategic coupling offer a conceptual scaffolding on which to develop these ideas.

GPNs are defined as a means of economic organization through which firms coordinate the production of goods and services across multiple geographic locations. GPNs are comprised of many actors and activities that transform tangible materials and intangible inputs into manufactured products and/or services for customers. Controlled by “lead” or “focal” firms which often take the form of large multinational corporations (MNCs), GPNs are international in scope, and the activities contained within them can range from resource extraction and materials processing to conceptual design and high-end fabrication and services.

Lead firms heading GPNs make decisions to “land” particular functions in particular locations based on the potential of said locations to generate profitability and flexibility for the lead firms and their GPNs overall. This “landing” process is referred to in the scholarly literature as “strategic coupling” as it depicts a process whereby economic functions are distributed in space to those locations which offer the lead firms various strategic advantages (e.g., lower costs, faster time to market, quality levels, access to experienced labour etc.). Regional institutions (such as agencies like Toronto Global) play a critical role in aligning the region’s assets to the strategic needs of lead firms and their associated partners and suppliers.

Viewed from the perspective of GPNs, regional prosperity becomes far more than simply optimizing the economic mix of activities within the region itself, and instead involves a given regional economy’s ability to occupy a position in given GPNs that convey to the region the highest possible levels of value creation and value capture. This involves matching the assets of the regional scale with the strategic needs of the GPN. The most favourable GPN value positions are typically those involving highly complex activities such as research and development and investments in data analytics, cloud computing and other forms of advanced information technology, which cannot easily replicated by other regions.

For strategic coupling to succeed, the local subsidiary must become embedded into the local supplier and innovation networks to continually add value to the production process. This relationship benefits the local economy by allowing domestic firms to access markets, capital, technology, knowledge and capabilities beyond their home economies. By tapping into a GPN, firms reap economies of scale by focusing on particular tasks/ functions for an entire GPN as opposed to only those for regional firms. Through the upgrading of skills and production processes or the introduction of new technological capabilities or organizational innovations, a region can improve its position within the value network (i.e., functional upgrading) allowing it to attract even more investment. The MNEs interviewed for this study – IBM, Cisco, General Motors, Huawei, Thomson Reuters, Siemens, Festo – have each located valuable research and development activities in the Toronto Region, embedding a critical component of their Global Production Network (GPN), and in particular high-value-added aspects of their supply chain, in the region.

Viewed through a strategic coupling lens, the region boasts numerous advantages enabling it to attract R&D investment from top global firms. With four universities and five colleges, the Toronto Region has a steady enrollment of more than a quarter of a million postsecondary students annually. A recent report by PwC report ranks Toronto fifth out of 30 cities in intellectual capital and innovation and tenth in technology readiness, just behind San Francisco, Tokyo and Paris.

Global firms such as IBM, Cisco, General Motors, Siemens or Huawei are looking for an ecosystem of businesses and talent on which they can build to help strengthen their product offerings. Multinational enterprises that choose to locate within the GTA inevitably develop connections across the entire region through university partnerships, talent recruitment and business operations. This makes a regional approach to investment attraction all the more pertinent.

The strength and breadth of the Toronto Region’s universities in particular are key strategic assets for firms looking to invest in R&D. Cisco, GM and IBM all describe the value of building relationships with university researchers and startup firms that can feed into and help grow a local innovation ecosystem. Huawei has committed to investing $10 million annually in university research funding in Canada, with $3 million earmarked for the University of Toronto to collaborate on a diverse range of projects, from cloud computing, biomedical engineering, materials science and theoretical physics.

Developing a world-class research centre is an effective way for a region to boost its cost-capability ratio advantage. The knowledge and capability that comes with a leading university and a community of innovative startups cannot easily be matched elsewhere, giving the region a unique edge in attracting R&D mandates from multinational corporations. Lead firms must be able to tap into many sources of innovation to develop ideas and products that can compete in the global marketplace. By building a world-renowned research and startup community, the Toronto Region has given itself a winning value proposition for multinational corporations looking for top research talent.

Cross-industry partnerships are another big draw for lead firms. In the case of Huawei, the Toronto Region offers the advantage of having both a well-established automotive sector and a strong tech sector. As the company seeks to expand into the field of autonomous and smart vehicle technology, this combination offers significant opportunities for growth. Few regions around the world are as well-positioned to enable a lead firm to develop and roll out new technologies in this field. Cisco also chose the Toronto Region to leverage its stronghold in financial information systems and computing, partnering with IBM and TD Bank to grow its fintech capabilities. And, with a focus on machine automation, Toronto Region’s diverse economy provides Festo with a diverse set of customers for its Industry 4.0 solutions while augmenting the region’s attractiveness to firms who see value in increased productivity through sophisticated automation of production.

Many of the firms interviewed highlighted the GTA’s large technical talent pool as a motivator to locate in the region. Lead firms often examine a region’s ability to quickly and effectively fulfill skill and labour requirements when making location decisions. As IBM notes, Canada has the largest (software) developer population outside of the US, making it a strategic location in which to invest and carry out research. Ontario in particular, it says, boasts a stock of 200,000 highly skilled tech workers, and graduates about 4,500 tech students from its universities each year. Thomson Reuters points to this as the main factor behind its decision to open the Technology Centre in Toronto. The company has a goal of building a 1,500 person research team, which it says few locations in the world could accommodate.

The case studies often show how firms will build on their initial investment to broaden their presence across the region and further afield. Huawei’s early success with its R&D program in Kanata led it to expand its research footprint all across Ontario, taking advantage of the specialized skillsets found in both the Ottawa and Toronto Regions. Siemens Canada located its head office in Oakville, yet it has set up operations, subsidiaries and a distribution network throughout the GTA. The diversity and range of the company’s operations means that an investment in any one municipality is likely to have multiple spillover effects across the region.

The case studies in this report illustrate that lead firms base their location decisions on much more than what any one jurisdiction alone can offer. Global firms such as IBM, Cisco, General Motors, Siemens or Huawei are looking for an ecosystem of businesses and talent on which they can build to help strengthen their product offerings. MNEs that choose to locate within the GTA inevitably develop connections across the entire region through university partnerships, talent recruitment and business operations. This makes a regional approach to investment attraction all the more pertinent.

Conclusion of Collaborating for Investment

The quantitative and qualitative insights provided in this report offer strong support for having a collaborative regional approach to investment attraction in the Toronto Region from the point of view of both foreign firms and (sub)regional municipalities. Foreign firms consider the value proposition of the region overall when making a location decision and in turn not only inject jobs, value added and taxes, but more importantly, can transform and upgrade the entire regional economy through the investments they make and the local (and global) connections they form.

The MNEs interviewed for this report provide evidence that this transformation is underway in the Toronto Region. The decision by leading global multinationals to locate part of their advanced research and development activities in the GTA will offer tremendous economic benefits to the Toronto Region for years to come. While all jurisdictions across the region see a substantial rise in income and jobs as a result of these FDI projects, the most significant outcome of these investments is the transformation that comes with being part of a global production network. These investments signal an intent by these firms to embed critical elements of their business – and the market access, talent and intellectual capital that goes with them – into the fabric of the region. In turn, these projects offer much greater benefits than the sum of their parts.

This report shows that to attract investment from MNEs, city regions must think globally. The leading firms of today weigh location decisions on the basis of what strategic assets regions as a whole – not just particular jurisdictions – can offer them in the context of a highly competitive international marketplace. Working together to strengthen and promote the region’s business and talent ecosystem will allow each jurisdiction to prosper while creating a winning value proposition to attract global firms.

Read the Full Report

Authors

Richard J. DiFrancesco, Ph.D., M.C.I.P., R.P.P.
Department of Geography & Planning, University of Toronto

David A. Wolfe, Ph.D.
Innovation Policy Lab, Munk School of Global Affairs, University of Toronto

Econometric Research Ltd