Silicon Valley has a second address, and it’s becoming much more than a summer cottage these days. Welcome to Toronto, the hottest new venue for the North American tech industry. For starters, this Silicon Valley cottage residence has lured in Intel Corp, Uber, Microsoft and Silicon Valley Bank, among others.
As reported by the Wall Street Journal, Intel Corp. is planning to build a graphics-chip design lab in Toronto. Uber is opening up an engineering hub. Alphabet, the parent company of Google, is establishing a campus in Toronto for its Lake Ontario “smart city”. Microsoft is working to significantly expand its Toronto labor force, too.
That means that there is also a lineup of startups preparing to go public in Canada, following on the coattails of the successful IPOs of Shopify Inc. and Lightspeed POS Inc earlier this year.
According to the Canadian Venture & Private Equity Association, the amount of money invested in VC deals in Canada in the first quarter of this year was up a whopping 48 percent, and of that, more than half were in the tech industry, the Financial Post reports. In total, $1 billion was invested in 142 VC deals in Canada in Q1 2019.
With Toronto fast becoming a second Silicon Valley, the potential for new IPOs is mouth-watering.
But it’s not just because Toronto is a great city for tech. U.S. immigration policies are playing a big role in Toronto’s Silicon Valley-style rise.
Related: How Investors Are Playing Uncertain Markets Permits for skilled tech workers are becoming such a problem that the industry finds it easier to operate in Canada. That’s a huge loss for the United States, especially when you consider that around half of the U.S. annual GDP growth is chalked up to technological innovation.
Last month, Marketa Lindt, president of the American Immigration Lawyers Association, testified at a House hearing, saying, “Increasingly, talented international professionals choose destinations other than the United States to avoid the uncertain working environment that has resulted directly from the agency’s processing delays and inconsistent adjudications.”
Canada is the key beneficiary of America’s arbitrary and dynamic anti-immigration push. That’s because Canada is ready to welcome talent, especially in the tech industry, while the United States is focused on making it increasingly difficult to cross any border.
According to Time magazine, “research shows that high-skilled foreign workers are highly productive and innovative, and tend to create more new businesses, generating jobs for locals.”
At the other end of this spectrum, in the past five years, Toronto has added more than 80,000 new tech jobs to its roster for a 54-percent increase. That puts it in third place among North American tech talent markets, behind the San Francisco Bay Area and Seattle, in CBRE’s Scoring Tech Talent Report.
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The trend points to more benefits to come from Canada, with CBRE noting: “More than 6 million highly skilled workers across the U.S. and Canada comprise the tech talent that is leading global innovation. The shrinking availability of tech talent in leading markets has spurred a spillover of hiring momentum in small and upstart markets in the U.S. and Canada as expanding tech employers seek additional labor pools”.
But with the U.S. on its anti-immigration rampage, those high-skilled foreign workers are increasingly likely to seek out the much more accessible Canadian innovator.
By Michael Kern for conil.me