A lack of political recognition and big business backing threatens to stunt the growth of Toronto’s $35 billion information and communication technology (ICT) sector, according to a report released Wednesday.
Toronto’s ICT industry “lacks political recognition and is flying below the radar screen,” according to Ron Freedman, principal of Toronto-based consulting firm Impact Group. Toronto can’t be competitive if it remains in Chicken Little mode or stays in a Pollyanna state of mind.David Ticoll>Text
Financing problems in the early stages of development plague ICT start-ups, said Freedman, one of the speakers at the presentation of the report, called An Information and Communications Technology Strategy for the Toronto Region.
The report was developed by ICT Toronto, an organization of technology-based businesses in the area that is acting as an advisory group for the city, and was financed by the federal International Trade Canada, the provincial Ministry of Economic Development 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 workers employed.
Toronto’s ICT industry employed over 92,500 workers in 2003, compared with New York’s 120,000 and San Francisco’s 191,000 tech workforce. A Statistics Canada survey in 2004 placed the number of ICT 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 aggressive and focused strategy involving all three government levels and the business sector, according to the report.
The city is facing competition from a number of global competitors who offer knowledge-based workers at lower costs, according to David Ticoll, chief executive officer of technical and strategic consulting firm Convergent Strategies.
Ticoll said that Canada, which ranked sixth in exporting information communication business services in 1995, has dropped to 13th place in 2002.
Toronto “can’t be competitive if it remains on Chicken Little mode or stays in a Pollyanna state of mind.”
“We need big industry to pitch in. They need to put money in this thing,” Ticoll said. Frank Maw, head of Alexander Consultants and former president of Motorola Canada, said India, China and some developing Eastern European nations threaten to overtake Toronto in this sector.
“Because of their low labour costs and aggressively focused national policies, India, China and some countries in Europe will increasingly capture knowledge-based jobs,” he said. “Many emerging countries have realized that the best way to improve their economy is to invest in education. China now graduates more engineers that the rest of world.”
The ICT Toronto five-year plan, calls for a 15 per cent increase in industry-university research and 25 per cent increase in ICT research by 2011.
The plan advocates a more vigorous effort to pitch Toronto as a leading technology hub and putting mechanisms in place to ensure that businesses get equal access to government support.
A more robust wireless infrastructure and an assessment of future bandwidth needs are also essential to attract new investors, according to the report.
ICT Toronto hopes the strategy will place the city among the five top locations in the world for communications technology research, education and business by 2011.