Jennifer Reynolds CEO of the Women Corporate Directors Foundation (WCD), and former CEO of Toronto Finance International (TFI) examines why Toronto is shining as a global fintech and innovation hub.
In 2019 Collision, one of the largest tech festivals in the world, was looking for a new home. The festival gathers together entrepreneurs and investors from over 140 countries, along with big names from the worlds of film and sports. It’s not surprising, then, that hundreds of cities entered the competition to host the event. Perhaps more surprising, for anyone unfamiliar with Canada’s largest city, was the organizers’ choice: Toronto.
Four years ago, when I started as CEO of Toronto Finance International, not many people would have associated Toronto with the tech industry. But that is changing fast. Ontario, the province in which Toronto lies, has the second-largest innovation and tech industry in North America, with almost 24,000 tech firms employing over 323,000 technology professionals. Toronto is North America’s fastest-growing tech market, adding over 80,000 tech jobs in the past five years. Technology talent now comprises 10.2% of total employment in Toronto, the third-highest concentration in North America.
Toronto is the second largest financial centre in North America but fintech has also emerged as a particular strength. A 2021 study by Accenture ranked the strength of global fintech hubs by analyzing 46 different data points—Toronto came in eighth. According to the Accenture study, in 2010, 15 new fintech companies were founded in Canada. By 2017 that number was 101. Overall Canada now has over 700 fintechs, 60% of which are headquartered in Ontario, while other sources cite the number of fintechs in Canada at over 1,300. Canada’s global reputation as a fintech hub is further demonstrated by the recent investment in the sector. According to KPMG, total fintech investment in Canada was almost $5 billion in just the first half of 2021.
There is a variety of reasons for the city’s rise. First, we have a huge pool of STEM graduates, thanks to our world-class universities. Second, immigration has been a key component of Canada’s economic-growth strategy. We have taken advantage of that to bring in highly skilled people from all over the globe, which has benefited our tech sector. Third, the cost per workstation is far lower here than in any other major city in North America. This is why the R&D arms of huge global tech companies, like Google and Uber, have come to Toronto in recent years—along with the surge in fintech startups founded in the city.
It is also why the organisers of events like Collision — which has been described as the Olympics of tech – are increasingly seeing Toronto as the right venue. The benefits work both ways. Festival participants are able to network and collaborate with one another, hear from experts in their field, experience the buzz of a fast-growing tech hub and enjoy the perks of a great global city. For the city, the event is an annual opportunity to attract new business from around the world.
That recognition matters. I have close to 25 years’ experience in the financial services industry and have also spent time in the venture capital world. I know that if you are trying to grow a tech ecosystem and improve its competitiveness, innovation is vital. In Toronto, for example, we have organisations like the Vector Institute, an independent not-for-profit that collaborates with government, industry and academia to drive innovation in artificial intelligence. In addition to its research activities, Vector runs a number of programs which aim to help companies improve their AI capability and build it into their growth strategy. Organisations like Vector are one reason why spending on AI R&D in Ontario increased six-fold between 2020 and 2021 and why Toronto has the densest cluster of AI startups in the world.
But raising your profile is just as important. Without being able to show what a city has to offer entrepreneurs looking for a place to start a business or investors looking to fund new companies, it’s hard to attract that interest.
The chance to do so is what makes conferences like Collision so important to Toronto. Domestic conferences are, of course, crucial to the industry. But for the city and its companies, international events have a far broader reach. There were a multitude of business relationships built and sales made after the first edition of Collision in Toronto in 2020. But from the seat I sit in, it’s more about raising our profile globally.
We are now seeing the benefits of that recognition. The pandemic has slowed down foreign investment everywhere, and Toronto is no exception: you’ve got to be able to visit a place to set up a business. But it is coming back with a bang. For the first half of 2021, venture-capital investment in Canada eclipsed all previous full-year totals. Canada’s VC investments are now the second largest among OECD countries.
When Collision returns to Toronto in June 2022, the festival’s participants will be able to see how that investment is powering growth as we navigate our way out of the pandemic. Then they will go back to their offices and around the world and tell their colleagues, “You’ve got to see this”.
Festival participants are able to network and collaborate with one another, hear from experts in their field, experience the buzz of a fast-growing tech hub and enjoy the perks of a great global city.