Toronto must nurture its fintech environment to keep its commercial market competitive in the 21st century, according to Toronto Finance International president and CEO Jennifer Reynolds.
Consistent growth in tech sector employment – which by Reynolds’s estimates account for one out of every 12 jobs in Toronto – has helped put the city among the top tiers of the world’s leading financial centres and tech hubs.
This is especially crucial, as the tech industry will most likely be Canadian commercial real estate’s strongest pillar in the event of a recession, according to CBRE’s Paul Morassutti.
“Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” Morassutti said in late February. “Tech companies anchoring new buildings is something we have virtually never seen before.”
However, “while our stature as a global financial centre has elevated, sustaining that momentum will require a strong innovation ecosystem to support the competitiveness and growth of the industry in the future,” Reynolds wrote in her recent contribution to The Globe and Mail.
Fortunately, Toronto is especially well-placed to maintain and even ratchet up its pace of tech sector growth, considering the depth and breadth of its pool of new graduates and skilled veterans alike.
“The region is singularly equipped to drive a fintech innovation ecosystem. Not only does Toronto have a deep pool of financial services talent, it is situated in North America’s third-largest tech cluster. The Toronto-Kitchener-Waterloo corridor has the second-highest density of tech startups globally.”
Moreover, expansion is nowhere near stopping, as “investment in fintech has grown at a compound annual growth rate of 118% since 2013, one of the highest growth rates for global fintech hubs.”
Cultivation of this vital industry would require even more investment to promote further innovation, Reynolds stated. Among the most valuable steps would be ensuring “a more co-ordinated approach that incentivizes innovation and drives collaboration among ecosystem participants.”
“Growth in VC funding at both the seed and later stage, along with increased opportunities to partner with the financial sector, are required for a more mature fintech ecosystem to develop. Furthermore, while the Toronto region has a strong presence of globally recognized universities and research teams, heightened focus on commercializing research is required.”