Financial Services Clusters

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Financial Services Clusters

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Financial Services Clusters

  1. 1. Financial Services Clusters The Greater Toronto Area MRK625 Victoria George
  2. 2. What is a Cluster? <ul><li>A cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters increase the productivity of participating firms and drive innovation forward. </li></ul><ul><li>Cluster, also known as a business cluster, competitive cluster, or Porterian cluster, was introduced and the term cluster popularized by Michael Porter. </li></ul>
  3. 3. What makes a cluster successful? <ul><li>the availability of venture capital </li></ul><ul><li>critical mass </li></ul><ul><li>technical infrastructure </li></ul><ul><li>presence of higher education and research institutions; </li></ul><ul><li>entrepreneurial drive </li></ul><ul><li>influence of champions </li></ul><ul><li>network </li></ul><ul><li>quality of linkages </li></ul><ul><li>social capital </li></ul><ul><li>synergy </li></ul><ul><li>diversity </li></ul>
  4. 4. About the Finance Cluster <ul><li>The City of Toronto is recognized around the world as Canada’s national centre for financial services. </li></ul><ul><li>Toronto is home to the headquarters of Canada’s five largest banks and to approximately 80% of the headquarters of foreign banks operating in Canada. </li></ul><ul><li>The Toronto Stock Exchange is the largest exchange in Canada. </li></ul>
  5. 5. About the Finance Cluster <ul><li>Financial services contribute significantly to the nation’s total exports, GDP and employment. </li></ul><ul><li>Ontario is the only province with a trade surplus in financial services with inter-provincial trade expanding at an annual growth rate of 7% since 1992. </li></ul>
  6. 6. Issues facing the Finance Cluster <ul><li>The financial services sector is experiencing a period of instability as forces of change with respect to globalization, regulatory changes, consolidations, and advances in technology change the entire context of financial services throughout the world. </li></ul><ul><li>The cluster must push for global recognition. </li></ul>
  7. 7. Areas in which to Grow <ul><li>Strides toward improved post secondary options in financial services will help to sustain further cluster growth. </li></ul>
  8. 8. Mississauga: Cluster Member <ul><li>Mississauga, with strength in a broad range of business sectors, is home to one of Canada’s largest Finance, Insurance and Real Estate (FIRE) clusters. </li></ul><ul><li>Companies in the FIRE sector are attracted to Mississauga due to its culturally diverse labour force and vast pool of highly skilled and knowledgeable people; its well-developed transportation </li></ul><ul><li>net work; its state-of-the-art telecommunication infrastructure; and its </li></ul><ul><li>close proximity to Canada’s financial centre. </li></ul>
  9. 9. Mississauga: Cluster Member cont. <ul><li>These healthy economic factors have </li></ul><ul><li>contributed to the unprecedented growth in the FIRE sector. </li></ul><ul><li>• The City of Mississauga’s FIRE sector is the third largest in Canada </li></ul><ul><li>• Mississauga’s FIRE sector employs more than 23,500 people </li></ul><ul><li>• Direct GDP contribution to the Mississauga region was estimated at $5.9 billion (2002) </li></ul><ul><li>• Combined direct and indirect GDP contribution to the Mississauga region is </li></ul><ul><li>estimated at $10.5 billion (2002) </li></ul><ul><li>• Over 70% of all Canadian banks and insurance companies are headquartered in </li></ul><ul><li>the Greater Toronto Area (GTA) </li></ul><ul><li>• The FIRE sector is the single largest contributor to the Canadian economy </li></ul>
  10. 10. London Financial Cluster <ul><li>London has over 50 per cent of UK employment in management of financial markets, venture capital, security broking and trading, funds and management and bank HQs. </li></ul><ul><li>The financial cluster generates large scale demand for telecommunication services, consultancy, legal services, software, data processing and information </li></ul>
  11. 11. New York Financial Cluster <ul><li>The Financial Services cluster consists of firms in three major sub-clusters – banking, securities and insurance. </li></ul><ul><li>Financial services employment in New York was 500,899 in 2001, about 7.3% of New York’s private sector employment. </li></ul><ul><li>New York City had the greatest concentration of employment in financial services in New York State. Two-thirds of the state’s financial services employment is in New York City. </li></ul>
  12. 12. Advantages of the Toronto Cluster <ul><li>Toronto is a significant economic center with: </li></ul><ul><li>superb universities </li></ul><ul><li>leading arts, </li></ul><ul><li>entertainment design, and </li></ul><ul><li>culture industries </li></ul><ul><li>The most diverse population in the world </li></ul><ul><li>Like London, but unlike most major U.S. cities, Toronto offers schools that work, low crime, and safe streets. Unlike London — or New York, Los Angeles, and San Francisco — Toronto also remains reasonably affordable, which allows it to retain residents from a wide mix of social and economic classes. </li></ul>
  13. 13. The End Thank you sources: Who’s Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life by Richard Florida http://www.berr.gov.uk/files/file21312.pdf http://www.omicc.ca/benefits-2.html http://www.toronto.ca/invest-in-toronto/clusteroverview.htm

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