Toronto ICT industry third in North America

A lack of political recognition and big business backingthreatens to stunt the growth of Toronto’s $35 billion informationand communication technology (ICT) sector, according to a reportreleased Wednesday.

Toronto’s ICT industry “lacks political recognition and isflying below the radar screen,” according to Ron Freedman,principal of Toronto-based consulting firm Impact Group. Torontocan’t be competitive if it remains in Chicken Little mode or staysin a Pollyanna state of mind.David TicollChief executive officer oftechnical and strategic consulting firm ConvergentStrategiesText

Financing problems in the early stages of development plague ICTstart-ups, said Freedman, one of the speakers at the presentationof the report, called An Information and Communications TechnologyStrategy for the Toronto Region.

The report was developed by ICT Toronto, an organization oftechnology-based businesses in the area that is acting as anadvisory group for the city, and was financed by the federalInternational Trade Canada, the provincial Ministry of EconomicDevelopment and Trade, and the City of Toronto.

The report ranked the city’s ICT sector third in North America,behind San Francisco and New York in terms of numbers of workersemployed.

Toronto’s ICT industry employed over 92,500 workers in 2003,compared with New York’s 120,000 and San Francisco’s 191,000 techworkforce. A Statistics Canada survey in 2004 placed the number ofICT employees in Toronto at 148,000.

With a core of some 3,300 firms, Toronto’s ICT sector generates$30 to $35 billion in annual sales and exports about $6 billion,the report said.

But Toronto could lose this edge due to a lack of an aggressiveand focused strategy involving all three government levels and thebusiness sector, according to the report.

The city is facing competition from a number of globalcompetitors who offer knowledge-based workers at lower costs,according to David Ticoll, chief executive officer of technical andstrategic consulting firm Convergent Strategies.

Ticoll said that Canada, which ranked sixth in exportinginformation communication business services in 1995, has dropped to13th place in 2002.

Toronto “can’t be competitive if it remains on Chicken Littlemode or stays in a Pollyanna state of mind.”

“We need big industry to pitch in. They need to put money inthis thing,” Ticoll said. Frank Maw, head of Alexander Consultantsand former president of Motorola Canada, said India, China and somedeveloping Eastern European nations threaten to overtake Toronto inthis sector.

“Because of their low labour costs and aggressively focusednational policies, India, China and some countries in Europe willincreasingly capture knowledge-based jobs,” he said. “Many emergingcountries have realized that the best way to improve their economyis to invest in education. China now graduates more engineers thatthe rest of world.”

The ICT Toronto five-year plan, calls for a 15 per cent increasein industry-university research and 25 per cent increase in ICTresearch by 2011.

The plan advocates a more vigorous effort to pitch Toronto as aleading technology hub and putting mechanisms in place to ensurethat businesses get equal access to government support.

A more robust wireless infrastructure and an assessment offuture bandwidth needs are also essential to attract new investors,according to the report.

ICT Toronto hopes the strategy will place the city among thefive top locations in the world for communications technologyresearch, education and business by 2011.



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