Ed Clark, former CEO of TD Bank, is business adviser to Ontario Premier Kathleen Wynne. This is adapted from a speech to the Canadian Club in Toronto on Oct. 18.
Amazon.com Inc. unleashed a bit of a frenzy in September when it announced its unusual search for a new head office. The competition resembled a fantasy sports league for economic development agencies, with prospective locations touting everything from their transit systems to tax levels.
But when Premier Kathleen Wynne asked me to co-ordinate the province's approach to supporting Ontario's bidding cities, the first question asked was whether we wanted Amazon to choose an Ontario city at all.
That might sound odd. We're talking about one of the world's largest and fastest growing companies promising to add of tens of thousands of jobs to a local economy. But there were voices – with thoughtful arguments – suggesting we pass on Amazon altogether and focus entirely on developing our own global companies.
The concern is real. Amazon plans to hire 50,000 workers over a decade or more. Would that spike in demand vacuum up every available technology worker in the province? Would it drive up salaries in the tech sector, ruining Ontario's cost advantage over American jurisdictions and pricing highly skilled workers beyond the reach of many Ontario firms?
There's no doubt we must build sustainable global companies here at home. But it's a false choice to suggest that pursuing Amazon comes at the expense of producing Ontario's own global leaders. We want both.
To have both, we needed a different approach from other jurisdictions to the Amazon bid. No rich inducements like New Jersey's $7-billion (U.S.) offer. Instead, we sought to enhance our already strong competitive position, aware that Amazon is a knowledge company and talent is its lifeblood.
Ontario currently offers companies access to one of the best information and communications technology (ICT) talent pools in North America. And those highly skilled workers cost less here than in the United States – savings in Amazon's case that might be as much as $1.5-billion a year once they reach peak employment.
Furthermore, our welcoming approach to immigration means we can supplement our terrific homegrown talent with energy and ideas from everywhere in the world, something that is getting harder for tech hubs in the United States to claim. And we've built an inclusive society that works to ensure opportunity for all, in cities with appeal to millennials.
So we set out to make further investments that would be attractive to Amazon, while reassuring our existing firms that Amazon's arrival would not undermine them.
The core of the province's support is a push to increase the number of science, technology, engineering and math (STEM) students that will graduate every year from Ontario's universities. We already produce 40,000 STEM graduates a year, the second highest number per capita of any jursidiction in North America. The commitments announced by the government would boost that to 50,000. That's 10,000 more STEM graduates every year, a 25-per-cent increase over where we are today.
Meanwhile we know that all companies, not just Amazon, face an acute shortage in the number of artificial intelligence (AI) engineers, designers, data scientists and researchers. So the government set another ambitious goal. Working with universities across the province, the aim – in five years – is to be graduating 1,000 masters students in applied AI every year.
We made clear that these commitments would occur whether Amazon came to Ontario or not. With the government's announcement, based on today's numbers, no state or province on the continent will produce more STEM graduates per capita than Ontario.
It turns out that the province's best response to Amazon is to offer what we offer everyone, from companies established here to those thinking of coming.
In the knowledge economy, companies want to locate in jurisdictions that invest in educated work forces, have livable cities and put out a welcome mat for the best global talent.
No special deals. Highly skilled talent, with even more to come. All at salaries that make a real difference in a business's labour costs.
Those are the values that matter to the companies of tomorrow. And they will be the source of Ontario's future prosperity.