When it comes to global tech ecosystems, the first country that most people are going to think of, for obvious reasons, is the United States; after all, it's the home of two of the biggest tech hubs in the world in Silicon Valley and New York. Others that likely come to mind are the United Kingdom, with London also ranking among the world's top tech hubs, and Israel, which has made its mark in various sectors, particularly in cybersecurity.
After that, though, it could be any number of countries and the next biggest ecosystem might be a surprise to some people: it's Canada, which the StartupBlink’s Global Startup Report 2023 placed in the number four position for the fourth year in a row.
In all, Canada had 39 cities ranked in the global top 1,000, compared to 41 the year prior, and Canadian cities hold global top 25 positions in eight of the report's 11 ranked industries. Within that, the country's top ranked hub is the Toronto-Markham Area, located in Ontario, ranked by StartupBlink as the #23 city globally.
"Generally speaking, on the provincial level, Onatrio’s public sector has been leading the race to develop ecosystems as a core economic development activity. Other provinces, although active, have yet to dedicate significant resources toward startup ecosystem development, which might explain the substantial and relatively recently created gap between Ontario startup ecosystems and those of other Canadian province," it said in the report.
"Other national initiatives, such as Startup Ecosystem Canada and Startup Canada, are also working to connect ecosystem stakeholders in the country."
An ecosystem overview of the Toronto-Waterloo Corridor from innovation policy advisory and research firm Startup Genome, noted that the Ontario-based cities have more than 15,000 tech companies, including 5,200 startups, and around 250,000 tech workers combined.
Toronto, in particular, is growing quickly: in 2022, it had CA$3.7 billion ($2.7 billion) invested, which is more than double the CA$1.5 billion ($1.1 billion) that startups raised in 2019. Waterloo-based companies, meanwhile, raised CA$856.4 million ($632.9 million) in 2022, for a combined total of just over CA$4.5 billion ($3.3 billion).
Some of the Ontario-based companies to raise funding include traffic-tech startup Miovision, which raised CA$260 million ($192.2 million) in April 2023, and PointClickCare Technologies, one of the largest private Canadian software vendors, which was valued at over $5 billion in July 2022, making it the ecosystem’s highest valued unicorn. It's strongest sector, however, is fintech: The Toronto-Waterloo Corridor is home to more than 12,000 Fintech companies and around 360,000 people are employed in the sector. The region attracts more than half of all foreign capital investment in financial services in Canada.
Part of what's behind the growth of tech in Ontario, the report says, is Canada’s immigration-friendly policies, as well as a strong university system: Toronto and Waterloo have 16 post-secondary institutions, including Canada’s largest engineering school, two of Canada’s top three computer science programs, and three of the top five business schools in the country.
"The Global Skills Strategy expedited the immigration process for highly skilled workers to just two weeks, and today over half of all Toronto residents were born outside of Canada," Startup Genome wrote.
"Leading innovation hubs including MaRS and Communitech have built a strong entrepreneurial community and continue to nurture it with dedicated support, and a steady stream of talent comes out of local post-secondary institutions, which include the University of Waterloo, York University, and the University of Toronto."
As with any rich ecosystem, it's not just the startups and entrepreneurs that are important, but all the small-and medium-sized businesses (SMBs) that spring up to service those workers. The startups get all the attention but there are many more small businesses that collectively employ a greater number of people.
As of December 2021, there were 1.21 million employer businesses in Canada; of these, 1.19 million, or roughly 97.8%, were classified as small businesses, while 22,700, or 1.9%, were medium-sized businesses. Only 0.2% were classified as large businesses.
More than a third, 37%, of Canada's small businesses are located in Ontario, with 437,891; the next highest is the 249,480, or 21%, located in Quebec. That makes sense when you realize that, with 13.4 million people, Ontario is the most populated province, followed by Quebec.
Between 2020 and 2021, private sector employment increased in all provinces, and Ontario was among the five provinces showed employment increases across all size categories, along with Nova Scotia, New Brunswick, Quebec, and British Columbia.
Overall, 76% of Ontario SMBs say they have confidence in their current business success; that's higher confidence than the average of 72%. That's being driven by increased revenue, with 24% of Canadian SMBs experiencing more than 10% growth.
SMB resources in Ontario
There a number of programs and conferences for SMBs in Ontario.
For example, there's the Small Business Centre Ontario Network, which provides free support and resources to entrepreneurs and small business, including connecting with an Expert Business Advisor at one their 54 small business centers. They provide guidance on accessing grants and financing, pivoting strategies, business referrals, and the current regulatory landscape.
There are government-funded business grants and loans that are available to small businesses, including federal, provincial, and municipal small business loans and grants. Funding from government sources typically falls into five categories based on what purpose the funding will serve: hiring, training, capital investment, research and development, and business/market development.
The province of Ontario also offers funding programs for specific regions, including the Northern Ontario Heritage Fund, which concentrates on six key funding programs: job creation, technology research and development, infrastructure and community; and the Eastern Ontario Development Fund, which is available for businesses that have at least 3 years of operations/financial statements, employ at least 10 people (or 5 for those in rural Ontario), commit to creating at least 5 new jobs (or 30% increase for companies with fewer than 15 employees), invest at least $500,000 in their project (or $200,000 in rural Ontario), and be located in, or plan to locate in, a community in eastern Ontario.
The Business Development Bank of Canada also sponsors Small Business Week during the third week of October, while The Canadian Association of Women Executives and Entrepreneurs (CAWEE) helps Canadian businesswomen network and build relationships, and the Canadian Federation of Independent Businesses (CFIB) offers business support services to small business owners throughout Canada.
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