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Nitin Kawale, left, president of Cisco Canada, is joined via teleconference by Rob Lloyd, Cisco’s president of development and sales, during a news conference in Toronto, March 5, 2014. (Fernando Morales/The Globe and Mail)
Nitin Kawale, left, president of Cisco Canada, is joined via teleconference by Rob Lloyd, Cisco’s president of development and sales, during a news conference in Toronto, March 5, 2014. (Fernando Morales/The Globe and Mail)

Cisco boosts Toronto’s tech credibility with $100-million innovation hub Add to ...

In the global race to attract high-tech business, Toronto appears to be pulling ahead.

Cisco Systems Inc. said Wednesday that it has chosen Canada’s largest city as one of its four new global innovation hubs, a $100-million investment. The move, which follows a December announcement by the Ontario government that it will give financial support to help the company expand, adds to a sense of momentum around the province’s tech sector.

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The California company is not the only tech player growing in Toronto: Video game company Ubisoft Entertainment SA is also expanding its Canadian operations, as are Google Inc. and SAS Institute Inc., which sells business software. The growth spurt is defying doomsayers who predicted that BlackBerry Ltd.’s much-publicized troubles would bring down the province’s technology sector.

It’s a coveted area. The tech sector often reflects the degree of innovation or creativity in a city, and mirrors the modern economy where knowledge-based jobs are becoming more prevalent. The Toronto area is now home to more than 12,000 tech sector businesses, most of them small.

Collectively, they employ more than 178,000 people and those numbers are growing, by the city’s count.

“We are seeing competition between cities today around the world for economic growth, for job creation, for opportunities to leverage investments in technology and Toronto has done a great job,” said Rob Lloyd, president of development and sales at Cisco, who is based in San Jose and hails from Winnipeg.

He rattled off Toronto’s attributes: top universities, a loyal and skilled work force, a stable economy and supportive governments. “We think with the construction, development and the vibrancy that we feel and see in Toronto that this is actually the place to go,” all of which he thinks will make the city a hub of innovation, job creation and startups.

Toronto joins Songdo, South Korea, Rio de Janeiro and another as-yet unnamed location in Germany that have been slated as centres for innovation, Cisco said. The move comes after announced investment plans in December for up to $4-billion to build research and development facilities in the coming decade, with the Ontario government agreeing to kick in up to $220-million.

Cisco said its so-called “Internet of Everything” innovation centre in Toronto will bring together startups, tech partners, researchers and industry people to examine new ways of using technology and connecting devices to the Internet. The goal is to “rethink and transform” industries such as those in construction, real estate and life sciences.

The Toronto hub will occupy about 15,000 square feet of office space in Oxford Properties’ RBC WaterPark Place, near the city’s waterfront, where the company is due to move next year. The building will also become Cisco’s new Canadian headquarters.

Mayor Rob Ford said he was upset that he was not invited to the Cisco news conference. “I’m the one that made the environment for these businesses to come here. My administration’s done it,” Mr. Ford said ‎as he arrived at city hall late Wednesday afternoon. “We have 150 cranes in the sky. We have the lowest tax rate, that was all my hard work.”

A Cisco source said Mr. Ford played no role in the process and never met with company officials. Rather, the company’s main points of contact were deputy mayor Norm Kelly and city councillor Michael Thompson.

Cisco’s expanded presence will help Toronto brand itself as a tech hub, which could in turn lure still more businesses, said Joe Mazzei, the city’s senior adviser for the technology sector. Employment is growing in this area and the new jobs tend to be higher-paying than the average, he said.

The city could use it. Toronto’s unemployment rate is 8.4 per cent, the third highest in Canada and little changed from a year earlier. Its economy has grown just 1.9 per cent on average over the past two years, the Conference Board of Canada says, although it expects that will accelerate to 2.8 per cent this year amid stronger global growth.

Toronto became North America’s fourth-largest city last year, and the Toronto Region Board of Trade puts it in eighth place in terms of high-tech employment of its ranking of 24 global cities, the top spot among Canadian cities. Almost 6 per cent of the city’s employment is in the high-tech sector.

With files from reporter Elizabeth Church in Toronto.

Follow on Twitter: @taviagrant

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