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2008
Annual Toronto Region
Innovation Gauge
2 Executive Summary
 4 Introduction
 6 At A Glance
 8 Who We Are
18 What We Offer
27 How We Are Performing
32 Conclusion
3...
EXECUTIVE
                                              SUMMARY




1
2008 Annual Toronto Region Innovation Gauge
WHAT WE OFFER
                                                                                                            ...
INTRODUCTION




3
2008 Annual Toronto Region Innovation Gauge
The Toronto Region Research Alliance (TRRA) launched
                                              the Annual Toronto Regi...
ATRIG brings a Toronto Region voice to the growing
chorus of organizations actively working to focus public     HOW ATRIG ...
COMPARATOR REGIONS
                                                                                         The Innovation...
The population of the Toronto Region      The Toronto Region has high levels
is growing rapidly, fueled by an influx   of ...
8
2008 Annual Toronto Region Innovation Gauge




                                              WHO WE ARE
With a population of more than seven million people                                population, however, is a quarter the s...
Annual Net Migration (International and Domestic), 2000-2006


                                                           ...
MOST IMMIGRANTS ENTER THE REGION AS
                       HIGHLY-EDUCATED WORKERS
                                       ...
Immigrants to the Toronto Region, Highest Level of Education,
                                                            ...
Immigrants also add what one researcher calls “knowledge
           spillover,” the learning and transfer of knowledge bet...
Region are performing better than in the rest of Canada.
                                              The X-axis of this ...
EMPLOYMENT OPPORTUNITIES ARE DIVERSE                            MANY “FIRMS TO WATCH”
                  The Toronto Region...
Median Household Income, Constant 2006 USD, 2000 and 2006



                                                             ...
Suscribers to Wireless Communications and Services,
                                         Percentage of Population, 200...
18
 2008 Annual Toronto Region Innovation Gauge




                                               WHAT WE OFFER
Educated residents and funding for Research &                                While the region does not perform well in ter...
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
2008 Annual Toronto Region Innovation Gauge
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2008 Annual Toronto Region Innovation Gauge

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The second Annual Toronto Region Innovation Gauge (ATRIG), a report card on the Toronto Region's innovation performance, examines a range of indicators to assess the strengths and weaknesses of the region's innovation system. We welcome feedback and suggestions for future reports

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Transcript of "2008 Annual Toronto Region Innovation Gauge"

  1. 1. 2008 Annual Toronto Region Innovation Gauge
  2. 2. 2 Executive Summary 4 Introduction 6 At A Glance 8 Who We Are 18 What We Offer 27 How We Are Performing 32 Conclusion 34 ATRIG Advisory Council 36 Appendix 1 – Selection of Comparator Regions 43 Appendix 2 – Methodology/Data Sources 53 Appendix 3 – Selected Sector Profiles 58 Appendix 4 – List of Acronyms 59 Endnotes TABLE OF CONTENTS
  3. 3. EXECUTIVE SUMMARY 1 2008 Annual Toronto Region Innovation Gauge
  4. 4. WHAT WE OFFER The Toronto Region is particularly strong in a critically important area that facilitates innovation – education in the 25-34 age range. Its high and growing overall levels of post-secondary and post-graduate residents include Business, Science and Technology master’s and doctoral graduates ready to become the next generation of managers and entrepreneurs. The region would benefit The Toronto Region has an innovative research base with from even more post-secondary graduates and post- a highly-educated and growing population that benefits graduate degree holders (master's and doctorates) as - Albert Szent-Gyorgyi, from a diversified manufacturing base and other major well as initiatives to encourage entry to these programs Hungarian Biochemist, 1937 Nobel Prize for Medicine advantages compared to its competition – that’s the for even larger numbers of students. good news. The scale of R&D funding from private sources in the However, the Toronto Region faces some significant United States is much higher than in Canada, although challenges to meeting its full potential to become one collaborative private/public sector funding for R&D of the top research capitals in the world. The obstacles in the Toronto Region universities is increasing. to be overcome include the need for even more post- Unfortunately, the region performs relatively poorly graduate students, stronger governmental support for compared to other regions in government funding for research and development, more private sector R&D, R&D in the sciences, engineering and health related and greater focus on knowledge and technology transfer. areas, and in private sector R&D. It would benefit from That’s the conclusion reached from a review of the Toronto more R&D investment from governments which would HOW WE ARE PERFORMING Region’s research and innovation system conducted by the lead to its R&D facilities and human resources becoming EXECUTIVE SUMMARY Toronto Region Research Alliance (TRRA). stronger, and its universities building a base upon which The second edition of the Toronto Region Research their capacity to train graduate students and attract Alliance’s Annual Toronto Region Innovation Gauge R&D-intense industries as partners. “Research is to see what everybody else (ATRIG) analyzes the current strengths and weaknesses has seen, and to think what nobody of the region relative to other regions with strong else has thought.” research bases, like Silicon Valley in California and The Toronto Region is publishing more and increasing Massachusetts, and to more comparable research its numbers of licenses, inventions and patents. These centres, like the Research Triangle in North Carolina, commercialization and knowledge transfer mechanisms Montreal, Illinois and Michigan. are tangible proof that the region’s universities are These findings will help key decision makers in transferring their R&D to the marketplace. But the region WHO WE ARE IN SUMMARY government, industry and post-secondary education is not matching the competition. It is not performing better understand how the Toronto Region can grow and as well as many of its comparator regions in terms of prosper by focusing attention on building a stronger relative impact – where it publishes and how much research base that will benefit us all. it commercializes. The population of the Toronto Region is growing rapidly, The Toronto Region has a strong foundation – a large and fueled by an influx of skilled, educated immigrants from highly-educated population, diverse industries and high around the world. The region’s economy benefits from employment rates, for instance – upon which it can build diverse industrial sectors outside its traditional to improve its performance. But to compete successfully manufacturing base (including “fast” companies with to become a truly innovative research base will require strong potential for growth), solid employment levels, significantly more sustained efforts – and a collaborative superior wages and healthy household income. Its approach between government, industry and the post- high use of wireless communication is a sign of a secondary education sector. technologically-connected and progressive society. 2008 Annual Toronto Region Innovation Gauge 2
  5. 5. INTRODUCTION 3 2008 Annual Toronto Region Innovation Gauge
  6. 6. The Toronto Region Research Alliance (TRRA) launched the Annual Toronto Region Innovation Gauge (ATRIG) last TORONTO REGION PROFILE year provide an accurate diagnosis of the current strengths and weaknesses of the The Toronto Region, at the western end of Lake region’s innovation system relative to key international Ontario, consists of Durham, Halton, Hamilton, competitor regions. Guelph, Peel, Toronto, Waterloo, Wellington and York. Over seven million people live in the We believe that an annual analysis of the region’s Toronto Region, making it the fourth largest innovation performance, based on a range of urban area in North America after New York, internationally-accepted performance indicators, Los Angeles and Chicago. is helpful to sustain and enhance the Toronto Region’s innovation performance. For the purpose of this report The Toronto Region GDP is $328 billion, we have used the same definition of innovation adopted accounting for 22% of Canada’s GDP. The region by The Conference Board of Canada, “the ability to turn has a wide range of industrial sectors with knowledge into new and improved goods and services.”1 strong employment, including Manufacturing (529,000), Professional and Scientific services We hope that the Innovation Gauge will become an (326,000), and Finance, Insurance and Real increasingly comprehensive measure of the region’s Estate services (317,000). comparative innovation performance, and will help decision-makers undertake the changes needed to move The Toronto Region workforce is well-educated, the Toronto Region into the top R&D and innovation- highly-skilled and growing: every year, 75,000 based economies in the world. university and college graduates and 47,000 immigrants enter a very skilled workforce of The format of ATRIG 2007 was an important first step. more than 1.8 million. In consultation with the ATRIG Advisory Council, we INTRODUCTION modeled its approach on the Index of the Massachusetts The region is attractive to immigrants. Forty-five Innovation Economy (MA Index) developed by the percent of recent immigrants to Canada choose Massachusetts Technology Collaborative (MTC). to live in the Toronto Region. In addition, 60% of these newcomers have at least one university While the MA Index offered a rigorous and comprehensive degree, which contributes to the region’s highly- framework for measuring innovation performance, we educated workforce. found that the Toronto Region lacked data routinely captured and available in the United States on numerous The Toronto Region is Canada’s largest centre innovation indicators – for the country as a whole and for for research and education, and is home to 9 the comparative regions in particular. With input from the universities, 8 colleges, and 12 research hospitals. ATRIG Advisory Council, we addressed these challenges in the 2008 report by selecting comparator regions and indicators more relevant to the Toronto Region. An understanding of the drivers of the economies of these We will continue to adapt the indicators we use for future regions and what makes them strong will yield important Innovation Gauge releases as the region continues to information and useful models for the Toronto Region. build on its capacity to monitor and assess the key elements of the innovation system. 2008 Annual Toronto Region Innovation Gauge 4
  7. 7. ATRIG brings a Toronto Region voice to the growing chorus of organizations actively working to focus public HOW ATRIG SELECTED THIS YEAR’S attention on critical innovation issues and their COMPARATOR REGIONS relationship to our future competitiveness and prosperity. This report compares the Toronto Region to Reports alone, however, will not produce the changes Illinois, Massachusetts, Michigan, Montreal, needed to strengthen the region’s innovation performance. North Carolina’s Research Triangle and ATRIG is the first step in a broader process of informing, California’s Silicon Valley. engaging and building consensus among the Toronto Region innovation system stakeholders. Together, this We selected these comparator regions or states impressive group of innovation stakeholders can help because they are similar in character, size, shape the development of effective strategies, policies economic base or other attributes to the Toronto and programs to address the region’s weaknesses and Region, or because they have economies – or SPECIAL THANKS capitalize on its strengths. attributes which make them strong research- driven economies – to which we aspire. All TRRA invites readers to participate in this process and we have significant R&D and strong innovation welcome feedback. Please email us at info@trra.ca indicators, including many that show positive trends over time. In most cases ATRIG indicators are presented TRRA is grateful for the assistance and guidance per 100,000 population in order to provide an provided by the members of our ATRIG Advisory Council accurate picture of the scale of the various (please see our acknowledgements, on page 34, for indicators in the Toronto Region relative to a list of members). We look forward to their continued these comparator regions. For more information participation and advice as we adapt and enhance ATRIG about the comparator regions, please refer to in future years. Appendix 1. 2008 Annual Toronto Region Innovation Gauge 5
  8. 8. COMPARATOR REGIONS The Innovation Gauge compares the Toronto Region’s performance to six regions that are – or have been – successful in innovation: Illinois, Massachusetts, Michigan, Montreal, Research Triangle and Silicon Valley. The comparators were selected based on: population, proximity, industrial make-up, strong manufacturing base, research intensity, and innovation performance. INDICATORS ATRIG indicators fall into three broad categories which paint a picture of the Toronto Region’s innovation performance: who we are – a description of the region’s population and economy; The Annual Toronto Region what we offer – factors that facilitate innovation; and how we Innovation Gauge analyzes perform – measures of innovative outputs. IN SUMMARY the region’s innovation performance, based on a range of innovation indicators. It highlights the current strengths and weaknesses of the The Toronto Region has a strong foundation – a large and region’s innovation system relative highly-educated population, diverse industries and high to selected comparator regions. employment rates, for instance – upon which it can build to improve its performance. But to compete successfully to become a truly innovative research base will require significantly more sustained efforts – and a collaborative approach between government, industry and the post- secondary education sector. © 2008 Toronto Region Research Alliance TORONTO REGION AT A GLANCE York Durham Peel Toronto Guelph Wellington Waterloo Halton 2008 Annual Toronto Region Innovation Gauge Hamilton- Wentworth 6
  9. 9. The population of the Toronto Region The Toronto Region has high levels is growing rapidly, fueled by an influx of post-secondary and post-graduate of skilled, educated immigrants from education in the 25-34 age range, Like the comparators, the Toronto around the world. The region’s with recent Business, Science and Region is publishing more and economy benefits from diverse Technology graduates poised to increasing its numbers of licenses, industrial sectors outside its become the next generation of inventions and patents. These traditional manufacturing base managers and entrepreneurs. This commercialization and knowledge (including “fast” companies with needs to be sustained. The scale of transfer mechanisms are tangible strong potential for growth), solid private and public R&D funding in the proof that R&D is being transferred employment levels, superior wages U.S. far outstrips Canada, although to the marketplace. The region is not and healthy household income. collaborative private/public sector performing as well as many of its funding for R&D in the Toronto comparators in terms of absolute Region universities is increasing. numbers of technology transfers or More government R&D investment relative impact – where it publishes would strengthen the universities’ and how much it commercializes. R&D facilities and human resources, improve graduate training, making the region more attractive to R&D- intense industries as partners. WHO WE ARE WHAT WE OFFER HOW WE ARE PERFORMING Average Relative Citations, 2000-2006 Silicon Valley 1.846 Massachusetts 1.841 Research Triangle 1.603 Illinois 1.511 Toronto Region 45% Rest of Michigan 1.511 55% Canada Toronto Region 1.409 Montreal 1.296 80,000 + average population increase in the region each year 29% in publications, a trend that matches all 45% of new comparator regions immigrants to Canada 65% of workforce settle in the Toronto 25-34 years of age Ahead of just one Region has a post-secondary comparator in average degree or diploma relative impact factors Ahead of only one comparator in the number of engineers graduating with a Average 14 “fast bachelor’s degree companies” per year over the last 6 years 2x increase in NSERC Collaborative Research 11 industrial sectors & Development project above the average funding (’98-’08), from Improving on total North American $5.1 to $10.2 million licenses, patents and concentration, more invention disclosures than comparator Lowest of all regions (’01-’06); however, the 2008 Annual Toronto Region Innovation Gauge regions in government R&D highest performing funding per capita regions produce 4x more than the Toronto Region 7
  10. 10. 8 2008 Annual Toronto Region Innovation Gauge WHO WE ARE
  11. 11. With a population of more than seven million people population, however, is a quarter the size of the Toronto (Fig. 1), the Toronto Region is the third largest of the Region. In absolute numbers, the Toronto Region grew comparator regions. It has fewer people than Illinois three times more – by approximately 140,000 people – and Michigan, but a larger population than the other than the Research Triangle, which grew by comparator regions. The region’s population growth rate, approximately 45,000 people. at almost 2% over the last 10 years (Fig. 2), is healthy, The Toronto Region’s net natural increase in population fueled by growing numbers of educated immigrants. (i.e. births in the region) has remained steady at THE TORONTO REGION HAS RELATIVELY Household income is relatively high, and many people approximately 40,000 persons per year. As Fig. 4 shows, STRONG POPULATION GROWTH subscribe to wireless services. Its industrial sectors on balance, the population of the region increases by are diverse, and the region fares well in the high more than 80,000 persons annually – largely fueled by technology-related fields. immigration, (i.e. adding births to immigrant numbers and subtracting migration from out of the region). Indeed, the number of immigrants to the Toronto Region has been more than double that of the Toronto Region’s As Fig. 3 indicates, the Toronto Region’s closest closest comparator, the Research Triangle, in each year comparator, the Research Triangle, has a greater between 2000 and 2006. annual net migration. The Research Triangle’s Population, 2007 Illinois 12.9 Michigan 10.1 Toronto Region 7.0 Massachusetts 6.4 Montreal 3.7 Silicon Valley 2.6 Research Triangle 1.6 Population, Compound Average Annual Growth, 1996-2007 0 2 4 6 8 10 12 14 Persons (millions) Research Triangle 3.39% Sources: Statistics Canada, Conference Board of Canada, U.S. Census Bureau, California Department of Finance Fig. 1 Toronto Region 1.92% Silicon Valley 1.04% Montreal 0.82% Illinois 0.55% Massachusetts 0.39% Michigan 0.31% 0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Compound Average Annual Growth Rate Fig. 2 Sources: Statistics Canada, Conference Board of Canada, U.S. Census Bureau, California Department of Finance 2008 Annual Toronto Region Innovation Gauge 9
  12. 12. Annual Net Migration (International and Domestic), 2000-2006 140 120 100 80 60 40 20 0 Toronto Region Fig. 3 -20 2000 2001 2002 2003 2004 2005 2006 Montreal Massachusetts -40 Silicon Valley Research Triangle Annual Components of Population Change, Toronto Region, 2000-2006 Michigan Illinois Number of Migrants (thousands) Sources: Conference Board of Canada, U.S. Census Bureau, California Department of Finance 131 128 100 100 100 93 140 92 120 100 80 60 40 -2 0 20 -14 -17 -17 -20 -26 0 2000 2001 2002 2003 2004 2005 2006 -20 Net International Migration -40 Net Domestic Migration Fig. 4 Net Natural Increase Source: Conference Board of Canada Persons (Thousands) 2008 Annual Toronto Region Innovation Gauge 10
  13. 13. MOST IMMIGRANTS ENTER THE REGION AS HIGHLY-EDUCATED WORKERS Canada, welcoming approximately 400,000 people. This represents approximately. 60,000 more immigrants than the region’s closest comparator, Silicon Valley, and three The Toronto Region has been, and continues to be, a times more than its Canadian comparator, Montreal. magnet for educated and experienced immigrants. Since 1961, more than a quarter of Ontario’s population (26.8%) This influx of immigrants is particularly good news for the has been born outside Canada. This proportion is 33.0% Toronto Region. In the years between 2000 and 2006, the in all city regions, but 43.4% in Toronto.2 Toronto Region welcomed increasing numbers of highly- educated and skilled immigrants as Fig. 6 shows. Of these Large numbers of educated immigrants are symptomatic immigrants, 73% are in the labour force (Fig. 6a) and, of of a national trend. In 1995, 21% of immigrants to Canada this, 88% or approximately 196,000, are employed. had a university degree; in 2000 this percentage had risen to 26%. The percentage of native-born Canadians with The positive contribution of educated immigrants to the university degrees rose at a much slower rate, from Toronto Region is corroborated by national studies, which 16% to 18% over the same period.3 show that a higher percentage of immigrants with post- secondary education are entering the workforce. According Results from the 2001 census indicated that immigration to a recent StatsCan study on immigrants to Canada, “in has continued to be of growing importance to the region’s 2007, the largest gains in immigrant employment were population.4 By 2006, of the 636,500 recent core working- among university-educated immigrants of core working age immigrants who arrived in Canada, the lion’s share age. While employment for immigrants with other levels went to Ontario’s labour market (51.1%), followed by of education was mostly unchanged, those with university Quebec (19.2%) and British Columbia (15.9%).5 As Fig. 5 degrees had an estimated gain of 62,000 (+7.0%), all in shows, between 2001 and 2006, the Toronto Region full time.”6 benefited from almost 45% of the new immigrants to Number of Immigrants as a Percentage of the National Number, 2001-2006 45% 50 40 15% 30 6% 5% 3% 20 2% 0% Toronto Region: 398,980 Montreal: 133,650 10 Silicon Valley: 341,207 Illinois: 279,358 Massachusetts: 178,329 0 Michigan: 119,974 Research Triangle: 17,593 Fig. 5 Percentage of National Immigration Sources: Statistics Canada, U.S. Census Bureau n al y is tts n le lle o a o ng re ig gi se in Va t h Re ia on Ill hu ic Tr on M M o c sa nt h lic rc ro as Si a To M se Re 2008 Annual Toronto Region Innovation Gauge 11
  14. 14. Immigrants to the Toronto Region, Highest Level of Education, Period of Immigration, 1991-2006 180 160 140 120 100 80 60 40 1991-1995 1996-2000 2001-2006 20 0 High School Apprenticeship College Fig. 6 University 2006 Labour Force Status of Immigrants 2 Arriving Between 2001-2006 Years Not in 27% 170 WHY ARE POPULATION GROWTH Number of Immigrants (Thousands) 73% In Labour Force AND IMMIGRATION IMPORTANT? 12 109 86 85 81 Labour Force THE TORONTO REGION IMMIGRANT 59 EMPLOYMENT COUNCIL (TRIEC) 14 36 The high rate of population growth in the Toronto Region Established in September 2003, TRIEC is 26 is widely considered to be a requirement for economic 17 comprised of employers, labour, occupational 15 growth, providing human capital and a constant influx of regulatory bodies, post-secondary institutions, talent. As Dr. Larry Swanson, associate director of the assessment service providers, community Source: Statistics Canada University of Montana’s O’Connor Center for the Rocky organizations, and all three levels of government. Mountain West pointed out, “economic strength follows Its primary goal is to find and implement local population strength: population growth means economic solutions that help break down the barriers growth and diversification; population loss means immigrants face when looking for work in the Fig. 6a economic loss or stagnation.”7 Toronto Region. 73% of immigrants Immigrants – particularly the well-educated “The Toronto Region continues to attract large (221,000) arriving between immigrants who are coming to the Toronto Region – numbers of skilled immigrants who comprise are of particular importance in bolstering labour force 2001-2006 are in the labour virtually all net labour force growth in the region,” growth. Immigrants enrich the Toronto Region with their says TRIEC director Elizabeth McIsaac. “This force. Of this number: skills, training and life experiences, augmenting the offers the local economy a competitive advantage region’s foundation for innovation. In fact, the Caledon if the skills and knowledge of these workers can – 196,000 were employed (88%) Institute of Social Policy points to immigrants as a be effectively leveraged and integrated.” counterpoint to the much-debated “brain drain.”8 – 25,000 were unemployed (12%) 2008 Annual Toronto Region Innovation Gauge 12
  15. 15. Immigrants also add what one researcher calls “knowledge spillover,” the learning and transfer of knowledge between ENCOURAGING IMMIGRATION OF SKILLED AND individuals and firms that precedes innovation. EDUCATED WORKERS “Innovations occur when individuals with high degrees • Ontario now has an uncapped number of work of existing creativity or knowledge make new and novel permits available to foreign workers. For intra- combinations of this knowledge with new insights observed company transfers, the process is fast and or learned through spillovers,” say Brian Knudsen, Richard straightforward: transferees can quickly obtain Florida, Gary Gates, and Kevin Stolarick in Urban Density, a work permit for up to seven years. Creativity, and Innovation. They go on to point out that such (www.cic.investinontario.com/bi) spillovers occur “when one individual’s creativity is transferred to another individual or firm. These creative • Ontario’s Provincial Nominee Program, an spillovers are in part believed to arise due to frequent expedited permanent resident visa program, face-to-face interactions and communication allows employers to permanently recruit high- between individuals.”9 end research staff and other workers within defined occupations. Is the Toronto Region taking full advantage of this (www.ontarioimmigration.ca/english/pnp.asp) latent potential? • The 2007 federal budget created a Foreign Recognition of immigrants’ credentials has been a Credential Recognition office (which has, stumbling block in the past. According to data from however, so far limited itself to giving referrals Status of Women Canada, just over half of foreign-trained to appropriate provincial offices).* professionals are working in professions or trades three years after immigrating.10 In addition, the human capital • In November 2007, Ottawa announced of increasing number of immigrants from eastern expanded foreign credential referral services Europe, south, east and west Asia and Africa who are in India and China that offer orientation EMPLOYMENT IN KEY INDUSTRIAL now arriving (rising from 35% in 1981 to 72% in 2001) sessions for potential immigrants.* SECTORS IS STRONG “may initially be less transferable due to potential issues regarding language, cultural differences, education quality, and possibly discrimination.”11 strong regional focus and expertise in many sectors outside its traditional manufacturing base. Fig. 7 shows The Toronto Region has high levels of employment in key that the Toronto Region has a wide range of industrial non-manufacturing industrial sectors, largely due to its * The Conference Board of Canada, The Canada Project Progress sectors, and that the majority of industries in the Toronto Report 2007: The Roads Not Travelled: Insights You Can Count On, (Ottawa: The Conference Board, 2008) Industry Sectors, by Size, Average Wage, and Relative North American Concentration, Toronto Region, 2006 100,000 90,000 80,000 70,000 60,000 Finance & Insurance 50,000 Utilities 40,000 Health Care & Professional, Scientific Social Assistance & Technical Services 30,000 Public Information & Cultural Industries 0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20 1.30 1.40 1.50 Administration Educational Services 20,000 Retail Trade Construction Wholesale Trade 10,000 Other Services 0 Manufacturing Waste Management & Transportation and Warehousing Location Quotient Remediation Service Agriculture, Forestry, Real Estate & Fishing & Hunting Rental Leasing Arts, Entertainment Fig. 7 Accommodation & Food Services & Recreation Sources: Statistics Canada, U.S. Census Bureau ($) Average Wage 2008 Annual Toronto Region Innovation Gauge 13
  16. 16. Region are performing better than in the rest of Canada. The X-axis of this graph shows its Location Quotient (LQ) – the employment concentration of industry clusters in the Toronto Region compared to the same industry clusters across North America. Industries with a LQ of one are performing at the average level. Those with a score higher The region has high levels of employment in the than one have a higher competitive advantage. The Fig. 7 Manufacturing and Professional, Scientific and Technical also shows that salaries are high in many of the region’s sectors as well as in Finance, Insurance and Real Estate larger and stronger sectors. The relative size of the sector and compares favorably to Silicon Valley and – Meric Gertler, sphere shows the number of people employed in the Massachusetts, in each of these sectors (Fig. 8). This Dean of Arts and Science, University of Toronto sector, and many sectors in the region are quite large. is of particular importance as these regions are strong performers in both R&D and innovation performance. Industrial Employment, Percentage in Key Sectors, 2007 Professional, Scientific and Technical Services 4.6% “…what you’re looking at here is really a 3.0% 2.9% story of diversity versus one of specialization.” 4.3% Toronto Region 5.1% Michigan 8.2% Illinois 4.1% Montreal Manufacturing Research Triangle Silicon Valley 7.6% Massachusetts 6.1% 5.2% 7.1% Toronto Region 3.5% Michigan 6.2% Illinois 4.3% Montreal Research Triangle Finance, Insurance and Real Estate Services Silicon Valley 4.4% Fig. 8 Massachusetts 2.2% 3.4% 3.4% Toronto Region 2.6% Michigan 2.6% Illinois 4.0% Montreal 0 2 4 6 8 Research Triangle Silicon Valley Massachusetts % of Total Employment in Area Sources: Statistics Canada, U.S. Census Bureau 2008 Annual Toronto Region Innovation Gauge 14
  17. 17. EMPLOYMENT OPPORTUNITIES ARE DIVERSE MANY “FIRMS TO WATCH” The Toronto Region has a wide range of specializations The Toronto Region has many successful high-tech and many occupations within the working population “firms to watch.” As Fig. 10 shows, the region fares well (Fig. 9). Approximately 75% of these occupations require among its comparators with fastest-growing technology specialized training and education, indicating the region firms in North America between 2001 and 2007. has a labour force which is “rich” in specialized skills While the region pales in comparison to the numbers and education. in Silicon Valley and Massachusetts, it performs well in comparison to other selected regions, consistently out-performing Montreal, Research Triangle, Illinois and Michigan. Labour Force by Occupation, Toronto Region, 2006 and Utilities 7% A. Management 11% I. Primary Industry 1% J. Processing, Manufacturing and Related 13% and Administrative 21% H. Trades, Transport and G. Sales and Service 22% Equipment Operators B. Business, Finance Sciences and Related 8% D. Health 5% and Sport 4% C. Natural and Applied and Religion 8% F. Art, Culture, Recreation Technology “Fast 500 Companies” Annual Average Number, 2001-2007 E. Social Science, Education, Government Service Fig. 9 62 Source: Statistics Canada 70 60 35 50 40 14 8 8 7 30 2 20 10 0 Fig. 10 Source: Deloitte and Touche Average Number of Companies 2008 Annual Toronto Region Innovation Gauge y ts on al e is n le gl ga o et re gi l in n Va hi us t Re ia on Ill ic Tr ch on M M o sa nt h lic rc ro as Si a To M se Re 15
  18. 18. Median Household Income, Constant 2006 USD, 2000 and 2006 80 60 40 20 WHY IS A DIVERSE ECONOMY IMPORTANT? WHY IS HOUSEHOLD INCOME IMPORTANT? 2000 2006 Fig. 11 Diversity in the Toronto Region industry and multiple Good household income is a sign of overall economic 78.8 employment sectors has contributed to stronger prosperity and can act as an indicator of innovation. WIRELESS SUBSCRIBER RATE IS HIGH 73.3 population growth than in areas that are heavily reliant The Toronto Region ranks high in this category, likely ACROSS THE REGION on a manufacturing base. Furthermore, the region’s due to its diverse industrial sectors, relatively low Sources: Statistics Canada, U.S. Census Bureau, U.S. Department of Labor-Bureau of Labor Statistics diverse areas of specialization add economic stability. unemployment rate, and the consistent growth in Because the Toronto Region is not dependent upon one its economy since the early 1990s. 56.2 54.4 53.6 53.4 sector, its economy may not be as vulnerable when one 50.5 ($) Thousands 50.3 49.3 49.3 48.8 47.1 sector is suffering, because others are available to support the economy. 38.9 HOUSEHOLD INCOME GROWTH IS HEALTHY 34.9 Many strong industrial sectors indicate that the Toronto The Toronto Region is keeping up with or is on par with Region is doing an excellent job of maintaining and the comparator regions with respect to number of growing non-manufacturing related industries and subscribers to wireless communications and services supplying the human capital required for these jobs. (Fig. 12). Since 2001, however, the region has fallen behind relative to its comparators. In 2001, the Toronto WHY IS WIRELESS SUBSCRIPTION IMPORTANT? y ts on le is al n Region had the highest number of subscribers, with a lle ga no ng et re gi Va hi us t i Re ia 10% advantage over its closest comparators, Silicon on Ill ic The Toronto Region’s average household income growth, Tr ch on M M to sa Valley and the Research Triangle. By 2006, the region ch lic n while lower than in Massachusetts and Silicon Valley, is ro as ar Si To had fallen to third in this indicator. M se healthy (see Fig. 11). The Toronto Region’s diverse Re industrial make-up will likely ensure that the region will continue to fare better than the U.S. comparator regions as the economic downturn in the United States begins to The Toronto Region’s high number of subscribers to affect America’s overall income growth. wireless communications indicates a technologically- Michigan and Illinois have already shown declines in connected and progressive society. household income due to the decline of manufacturing in these regions. A more diversified economy has prevented this from happening in the Toronto Region. 2008 Annual Toronto Region Innovation Gauge 16
  19. 19. Suscribers to Wireless Communications and Services, Percentage of Population, 2001 and 2006 82 80 79 75 73 68 100 60 59 49 50 47 45 46 80 41 60 40 20 0 2001 2006 Fig. 12 THE BOTTOM LINE • Toronto Region has a strong and growing population base • Toronto Region attracts and retains skilled immigrants • Toronto Region has a diverse economy, with strong industrial clusters in key areas Sources: FCC, Statistics Canada Percent of Population • Toronto Region is tech savvy and inter-connected • The Toronto Region has “fast companies” with highlighted potential for growth y le on s tts n al lle oi ga ng re gi se in Va hi t Re ia on Ill hu ic Tr on M M to c sa ch lic n ro as ar Si To M se Re 2008 Annual Toronto Region Innovation Gauge 17
  20. 20. 18 2008 Annual Toronto Region Innovation Gauge WHAT WE OFFER
  21. 21. Educated residents and funding for Research & While the region does not perform well in terms of Development (R&D) are essential for innovation. overall numbers of citizens with post-graduate and The Toronto Region has much to offer in these areas. professional degrees in the total workforce compared to The region has high and growing overall numbers the selected comparators in the U.S., there has been a of residents with post-secondary and post-graduate 2% overall increase in this measure (an increase of more degrees. In addition, both government and private sector than 17,000 people) since 2001 (Fig. 14). Only Montreal support for R&D in the region has increased, including has enjoyed comparable growth. Indeed, the dramatic collaborative R&D delivered by universities and colleges. increase in post-graduate and professional degrees HIGH AND GROWING LEVELS OF between 2001 and 2006 shows a healthy positive trend POST-SECONDARY EDUCATION that many of the comparators have failed to replicate. Some of the U.S. comparators experienced a decline in this category, and many showed very small growth. More Business, Science and Technology master’s and doctorate graduates are ready to become the next generation of managers and professionals. The Toronto Region is doing well with respect to overall level of education for the age range 25-34 years. These recent college and university graduates represent the GOVERNMENT SUPPORT FOR “new” workforce. POST-GRADUATE EDUCATION As Fig. 13 illustrates, the Toronto Region comes first The Reaching Higher plan, unveiled in the in college or university education in this age range and 2005 Ontario Budget, targeted 14,000 new within the comparator selection. A larger percentage post-graduate spaces school by 2009/10. of the Toronto Region’s population has a college or It also identified an additional 104 first-year university education than any of the comparator regions undergraduate medical spaces by 2008/09. in this age range, with more than 65% of the population This program was part of the Ontario in 2006 holding at least a college diploma or associate’s government’s $6.2 billion investment degree. This represents an increase from 56% in 2001. in post-secondary education. (www.edu.gov.on.ca/eng/tcu/about/annualreport) Percent of Population 25-34 years with a Post-Secondary Degree or Diploma, 2001 and 2006 EDUCATION 70 60 50 40 30 2001 2006 Fig. 13 65.2 Sources: Statistics Canada, U.S. Census Bureau 60.3 56.8 55.2 % of Population 25-34 56 53.8 53.3 51.9 53 49.9 41.9 40.8 35.6 35.2 2008 Annual Toronto Region Innovation Gauge n al y tts e is n le gl io a o re ig se l in g n Va t h Re ia on Ill u ic Tr ch on M M o sa nt ch lic ro as ar Si To M se Re 19

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