Who needs Silicon Valley when Toronto’s an option?
All right, we’re not there yet, but we do have a tech cluster that’s growing fast. And our developing ecosystem has a noteworthy support structure that stands to give the other guys – not just San Francisco and Silicon Valley, but New York, Los Angeles, Boston and Tel Aviv – a run for their money.
A tech cluster, of course, forms when a powerhouse of some sort, like a university or an established player, acts like a magnet, drawing startups and other businesses that are eager to continue to test the tech frontiers.
There’s a lot to appreciate about the tech community we’re growing here in Toronto. A variety of recent developments have helped overcome some of the roadblocks in the way. We still, however, have a way to go. Achieving scale may be one of our biggest challenges.
On the plus side, think about our core. Our universities have encouraged a growing number of non-profit incubators and accelerators. Ryerson University, for example, sponsors the Digital Media Zone and the MaRS Discovery District, while the University of Toronto encourages entrepreneurial innovators through nine accelerators. Plus, tech names like Canadians Shopify and Hootsuite and global U.S. giants like IBM, Apple and Google have established footholds here.
Also helping spur growth is our funding boom. Kudos have to be handed to a Canadian leader in tech startup funding, the Ontario Municipal Employees Retirement System pension fund, which raised $210 million in 2011 and another $260 million four years later.
An improved federal regulatory environment with regard to foreign venture capital is another area that has boosted our potential. This broke a long funding drought and has propelled such U.S. venture-funded Toronto startups as Wattpad, 500px, and Nymi Inc. Local government has stepped up as well. Ontario’s provincial government offers grants and financial assistance and has partnered with the federal government on creative programs to foster startups through FedDev Ontario.
Where Toronto far outshines established leaders is in an area that’s outside of the purely economical factors, but is no less important: Our quality of life. You can’t grow great tech companies without smart people to power them. A survey last year of the world’s best tech cities in which to live and work found that on that basis, Toronto ranked in the No. 3 spot, behind only Berlin (No. 1) and Austin, Tex. (No. 2), and ahead of No. 4 San Francisco and cities more traditionally known for their tech-friendly environments. The study by Expert Market, a U.S.-based business-to-business marketplace, gave Toronto high marks for various reasons, including our quick turn to business starts, along with pay and vacation benefits and reasonable rents.
Despite such positives, we’re still not at the point where anyone’s going to dub us Silicon Valley North.
While Toronto has been making significant efforts to expand its tech clusters, particularly in Toronto’s downtown core, we’re still struggling to achieve the kind of scale we need. Bigger cores make for more robust communities, but there’s a shortage of high quality, yet inexpensive space. That’s particularly the case near our financial center. A fix for that problem would set us apart on the world stage for fostering sectors in finance and tech that set the standards for both collaboration and innovation.
Toronto may not yet be a prime alternative to Silicon Valley when it comes incubating the kind of tech innovation that has so dramatically reshaped our world so far, but Silicon Valley didn’t reach its potential overnight. Just wait.