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Toronto is the technological heart of Canada. The city's vital Information and Communication Technology (ICT) cluster has been contributing more than $20 billion annually to the economy. Globally focused manufacturers and developers create software, hardware, New Media and communications solutions that permeate and act as catalysts in all areas of the economy. With its world-leading R&D, expert talent pool, renowned post-secondary education, supportive government initiatives and high-performance infrastructure, Toronto is a natural hub where information-oriented companies can invest and excel.
 Key facts
Major players
Success stories
Cluster development strategy
Support systems
Size of ICT cluster
New media sub-cluster
Competitive cost structure
ICT markets
Relevant reports
Contact information
Key facts
Toronto ICT Cluster the largest in Canada and 3rd largest in North America
Toronto has the largest concentration of private ICT facilities (100 or more employees) in Canada and the third largest in North America, behind San Francisco and New York respectively.
Source: 2004 E & B Data [ICT Study-Executive Summary (pg. 1)]
Major players
Toronto's Competitive Advantage is its Depth and Diversity of its ICT Operations
Toronto ICT strengths are found in software and systems development; manufacturing; and ICT services. In this cluster, local and international firms undertake one or more of the following: software, computer services, professional services, end-user equipment, computer systems, semiconductors, communications equipment, wireline services, wireless services and creative and content development (New Media).
N.C. = 'Not Classified'
Source: 2004 E & B Data [2004 ICT Study (p. 4)]
Alliance Technologies
Allstream
Bell Canada
Celestica
CGI Group
IBM Canada
IDC Canada
Nortel
Motorola
Oracle Canada
Rogers
Sprint Canada
SAS Canada
Xerox Canada
Success stories
Many world-leading high tech companies are drawn to Toronto to invest and grow their operations. SAS Canada, the world's largest privately held software company, recently opened its $30 million new Canadian corporate headquarters on King Street East. The new 110,000 square foot facility stands eight storeys and features the latest advancements in environmental and architectural design, allowing it to become the first building in Toronto to be LEED (Leadership in Energy and Environmental Design) certified.
Many of our companies have a global focus. For example, Autodesk recently took a major step to expand its presence in Toronto. It is now one of the world's top leading innovators of 3D graphics software for film, video, electronic games, interactive media, visualization, architecture and industrial design. Its programs have won numerous awards including an Oscar from the Academy of Motion Picture Arts and Sciences for scientific and technical achievement for their development of Maya software.
Cluster development strategy
Over the past few years, the City of Toronto together with other orders of government, has been working closely with ICT industry stakeholders to produce a Strategy for this strategic sector with the goal to become and be acknowledged globally, as one of the 5 most innovative, creative and productive locations in the world for ICT research, education, business, and investment by 2011. ICT Toronto, a multi-stakeholder partnership was created to serve as an advisory and reference group and potential ICT think tank to implement the ICT Strategy.
Support systems
Association of Internet Marketing & Sales (AIMS)
Canadian Advanced Technology Alliance
Canadian Information Processing Society (CIPS)
Centennial College (Centre for Creative Communications)
Computer Animation Studios of Ontario (CASO)
Greater Toronto Marketing Alliance (GTMA)
Industry Canada
Information Technology Association of Canada
Innovation Synergy Centre in Markham (ISCM)
Interactive Ontario
International Trade Canada
MaRS Discovery District
Mississauga Technology Association
Ontario Ministry of Economic Development and Trade
Rotman School of Business
Toronto Board of Trade
Toronto Regional Research Alliance (TRRA)
University of Toronto (Munk Centre)
York Technology Association
Size of ICT cluster
| |
City of Toronto |
Greater Toronto Area |
|
Number of Companies |
1,685 |
3,362 |
|
Number of Employees |
75,000 |
148,000 |
Source: 2004 E & B Data [2004 ICT Study (p.4,10)]
IT Employment
In terms of employment, the service side of the ICT cluster is the largest, followed by development and manufacturing. However, most of the facilities are found in the development sector.
IT Employment by Sub-Sector in 2003 (GTA)
| |
Jobs |
Percent |
Facilities |
Percent |
|
Communication Equipment |
2960 |
2% |
67 |
2% |
|
Computers |
2960 |
2% |
34 |
1% |
|
Electronic components |
13320 |
9% |
101 |
3% |
|
Other |
2960 |
2% |
34 |
1% |
|
Peripherals |
1480 |
1% |
34 |
1% |
|
Manufacturing Total |
23680 |
16% |
269 |
8% |
|
Data processing |
5920 |
4% |
168 |
5% |
|
Software |
20720 |
14% |
605 |
18% |
|
Systems |
22200 |
15% |
504 |
15% |
|
Development Total |
50320 |
34% |
1311 |
39% |
|
Design services |
2960 |
2% |
134 |
4% |
|
Distribution |
16280 |
11% |
336 |
10% |
|
Internet and other IT-related producers |
2960 |
2% |
101 |
3% |
|
Other |
5920 |
4% |
67 |
2% |
|
Repair and service |
5920 |
4% |
134 |
4% |
|
Telecom |
29600 |
20% |
134 |
4% |
|
Testing laboratories |
1480 |
1% |
14 |
0% |
|
Training |
1480 |
1% |
67 |
2% |
|
Services Total |
68080 |
46% |
975 |
29% |
|
Not Classified |
5920 |
4% |
841 |
25% |
|
Grand Total |
148000 |
100% |
3362 |
100% |
Source: E & B Data [2004 ICT Study (p.5)]
The City of Toronto has over 50% of all ICT companies located in the Greater Toronto region. This cluster accounts for about 5.5% of employment within the Toronto CMA (Statistics Canada 2001 Census). Over 300 foreign companies have subsidiary operations in the Toronto region. Annual sales for the ICT cluster amount to over $32.5 billion, while the annual exports for this cluster is over $6.2 billion.
New media sub-cluster
The New Media sub-cluster, while small with respect to the overall IT cluster, is a rapidly growing sector that is exerting a very strong influence on many clusters such as Film and Television. This industry is made up of those business establishments whose main activity consists of providing technology products and services to the media markets. Firms in this cluster specialize in some of the following: animation, post-production, special effects, website development, graphic design services and CD/DVD production.
| |
City of Toronto |
Greater Toronto Area |
|
Number of Companies |
504 |
803 |
|
Total Employment |
11,741 |
18,113 |
Source: 2004 E & B Data [IDM Study p. 10-11]
Within the GTA, approximately 60% of the firms are located within the City of Toronto. The typical company is small (median employment of 10) with estimated annual sales of $1 million. Overall sales for this sub-cluster are estimated at between $1.5 billion and $2 billion annually. The sales generated by New Media account for about 1% of the revenue produced by the IT sector.
Competitive cost structure
In terms of overall operating costs for ICT operations (manufacturing and/or services), Toronto ranks second lowest amongst the top North American metropolitan areas (2003). The city excels on two key location factors, offering strong competitive advantages including labour force availability and market accessibility. In terms of market access, Toronto businesses have one of the best access entry points to consumers compared to all major metropolitan areas in North America. A market of upwards of 100 million people can be reached within a one-hour air flight of the GTA. In terms of labour force, Toronto is competitive in all key dimensions: creativity, availability, expertise and costs.
Total Operating Costs for Selected Cities in the Software Sector
|
City |
Labour |
Facility Lease |
Electricity |
Total Taxes |
Operating
Costs |
|
Montreal |
98.7 |
80.1 |
78.8 |
87.7 |
97.5 |
|
Toronto |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
|
Atlanta |
119.8 |
97.5 |
90.9 |
56.1 |
117.9 |
|
Washington D.C. |
122.8 |
133.5 |
90.9 |
48.2 |
122.4 |
|
Average |
123.7 |
113.0 |
131.0 |
46.9 |
122.8 |
|
Philadelphia |
124.7 |
119.9 |
154.5 |
45.9 |
124.3 |
|
Dallas |
127.4 |
104.3 |
90.9 |
41.9 |
125.2 |
|
Boston |
129.4 |
112.1 |
171.2 |
33.1 |
128.4 |
|
Los Angeles |
131.2 |
83.3 |
203.0 |
32.1 |
129.0 |
|
Houston |
130.2 |
114.9 |
148.5 |
32.8 |
129.1 |
|
Chicago |
130.8 |
119.9 |
118.2 |
30.1 |
129.4 |
|
Seattle |
131.5 |
117.4 |
89.4 |
29.3 |
129.8 |
|
Detroit |
135.4 |
122.8 |
131.8 |
25.8 |
134.0 |
|
New York |
136.2 |
176.2 |
201.5 |
15.9 |
138.4 |
|
San Francisco |
142.8 |
118.5 |
209.1 |
10.9 |
141.7 |
Source: 2004 ICT Study (p. 24), based on KPMG Competitive Alternatives 2004
Total Operating Costs for Selected Cities in the Manufacturing Sector
|
City |
Labour |
Land & Build-
ing |
Trans-port |
Electr-
icity |
Total
Taxes |
Operat-
ing Costs |
|
Montreal |
97.9 |
83.9 |
106.5 |
81.2 |
86.7 |
98.0 |
|
Toronto |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
|
Atlanta |
117.6 |
72.3 |
107.3 |
96.4 |
87.5 |
115.9 |
|
Washington D.C. |
121.0 |
83.4 |
109.1 |
88.5 |
84.8 |
118.9 |
|
Philadelphia |
122.9 |
86.4 |
111.7 |
150.9 |
73.6 |
122.3 |
|
Average |
123.3 |
110.0 |
115.3 |
133.3 |
77.5 |
122.4 |
|
Dallas |
128.4 |
69.4 |
110.1 |
93.3 |
82.1 |
125.4 |
|
Boston |
127.9 |
100.4 |
115.3 |
163.6 |
63.4 |
127.6 |
|
Chicago |
130.4 |
102.8 |
104.2 |
141.2 |
69.1 |
128.2 |
|
Houston |
132.2 |
78.4 |
115.6 |
139.4 |
74.4 |
130.4 |
|
Seattle |
131.9 |
133.0 |
145.7 |
87.9 |
75.0 |
130.5 |
|
Detroit |
135.8 |
103.0 |
104.4 |
118.8 |
73.0 |
132.3 |
|
Los Angeles |
88.2 |
130.5 |
136.9 |
237.6 |
60.6 |
132.8 |
|
New York |
134.4 |
279.6 |
110.9 |
203.6 |
78.0 |
133.9 |
|
San Francisco |
187.1 |
143.8 |
144.4 |
210.9 |
43.1 |
144.5 |
Source: 2004 ICT Study (p. 24), based on KPMG Competitive Alternatives 2004
ICT markets
Fully Integrated ICT Cluster
The ICT industry is fully integrated with the rest of the economy. This industry supports the economy by enhancing productivity through the application of information technology. In turn, the Toronto economy provides a market for ICT products and the services developed and offered locally. Toronto region ICT firms target three distinct markets:
- Other ICT companies driving industry growth, innovation and export development;
- Consumer markets (e.g. gaming) in response to market demands and opportunities; and
- Financial services, business services and industrial markets driving increased productivity and the creation of new business applications (e.g. e-banking).
ICT Technology Markets in the Toronto Region
Source: 2004 E & Data [ICT Executive Summary, p. 3]
The IT and New Media cluster benefits from the success of other clusters in the city. The city's film and television industry creates spin-off opportunities for New Media, especially in the areas of animation and special effects. One example of a company leading in this sub-cluster is Autodesk. Autodesk's Maya software has gained the distinction of being the world's largest 3D animation, modeling and rendering tool for the entertainment market. In 2003, Autodesk was honored with an Oscar from the Academy of Motion Picture Arts and Sciences for scientific and technical achievement for their development of Maya software.
Relevant reports
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Contact information:
Rob Berry
Manager, Sectors
Tel: 416-392-3387
Fax: 416-392-3374
rberry@toronto.ca
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