Having ruled for decades as the undisputed center of the planet’s digital economy, California’s Silicon Valley has collapsed under the weight of fame: wages are too high, the cost of living is too high, competition is fierce, and the giants who have developed in the region are looking for alternatives in other directions. This transition, often buoyed by abundant labor and generous tax breaks, has benefited American capitals such as Austin, Texas and Miami, Florida. But further north, in frigid Toronto, Canada’s largest city, tech companies are targeting tech companies these days.
Practically every major in the industry has already set foot in the metro area, from Apple and Amazon to Uber, TikTok, Netflix and Pinterest. Microsoft opened a new headquarters in a fifty-story tower in February. Google has welcomed a head-to-head return to action at its new downtown facilities. Twitter tripled its home team. The result: The pace of hiring was four times faster than in Silicon Valley — in the past year alone, the Canadian city created 80,000 jobs in the digital market, more than New York, Seattle and Boston combined. Toronto has turned into a frenetic pole of attraction, now has 5,200 startups and 15,000 high-tech companies and has become the third largest main center Technology in the Americas, behind San Francisco and New York, being the fastest growing.
Known for its significant investment in urban planning, the province of Ontario, where Toronto is located, has always had a spur of innovation, which has facilitated the attraction of big technology. The starting point for the current boom was the creation, in 2017, of the Vector Institute for Artificial Intelligence, with $130 million in government and industry funding with the specific goal of retaining talent in the city and stimulating the opening of research centers. In just five years, the city has changed. “It is the effect of sound public policies, which are able to sustain long-term plans,” says Tristan Jung, an engineer at the Canadian office of Twitter. Greater Toronto has 11 top universities that train highly qualified professionals who, together with foreigners recruited thanks to a welcome immigration policy, ensure that 10% of the workforce is connected to the high-tech world, twice as many as other capitals. Another attraction for startups is the average salary of $90,000 per year, influenced by the $165,000 per year average registered in Silicon Valley. “The sector’s growth has been accelerating. In 2021, nearly $3 billion was invested in startups, more than the previous 10 years combined,” says Chris Albinson, director of Communitech, an organization that supports technology companies.
Toronto, like other Canadian cities, benefited from the anti-immigration policy of former US President Donald Trump, who early in his term suspended the granting of essential visas to import professionals from abroad. In contrast, the Canadian government has simplified immigration processes to attract talent. The Canadian population grew by 5% between 2016 and 2021, twice the rate of the United States, and in Toronto, 52% of residents were born abroad. “It is quick and easy to hire talent from all over the world,” says Liran Bellinzon, an Israeli who decided to immigrate to found biomedical AI company BenchSci in 2016.
German scientist Jessica Burgner-Kars, who was invited to teach at the University of Toronto, runs a state-of-the-art laboratory where she develops snake-like robots capable of reaching any point in the human body and working on tumors deemed inoperable. “They can revolutionize surgery,” he explains. The expansion doesn’t stop: The University of Toronto itself, one of Canada’s major universities, has announced that it will start building an artificial intelligence center with a budget of $100 million and fully funded by local companies. “Toronto has spent time and money building its reputation as an up-and-coming business hub, and now it is paying off,” says Martin Passeri, founder of a startup focused on college education. Skillfully balancing well-coordinated public policies, interested companies, and incentives to enter foreigners, the city remains firmly on the path of development for the twenty-first century.
Published in VEJA on May 25, 2022, Issue No. 2790