City of Toronto Economic Overview

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From Concept to Action How Cluster Development
is Implemented at the Local Level
www.toronto.ca/business invest_at_toronto.ca
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Presentation Overview
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Presentation Overview

• Cluster Theory - A quick summary
• Torontos Approach to Clusters
• Cluster Activity Updates
• Lessons Learned

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Cluster Theory
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Industry clusters are the focusof competitiveness
Economic Development Economic Development in
the Old Economy in the New Economy
- More jobs the only goal - High Quality Jobs -
Plant Attraction - Globally-competitive,
high-value added companies - Cluster
Development
Goal
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Industry Clusters are the Engines of a City
Economy

• Cluster competitiveness shapes a whole array of
  local economic outcomes
• Focusing on competitiveness needs is a good way
  to prioritize public investments for long-term
  economic development

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Dynamic Regional Economies Support Competitive
Clusters
New companies and industries formed in the region
New people and Ideas drawn to the region
Competitive Clusters
Quality Economic Foundations
Human Resources
Local Goods Services
Financial Capital
Research Development
Physical Infra-Structure
BusinessClimate
Quality Of Life
New firms Attracted to The region
Capital drawn into the region
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Making Location Decisions in a Knowledge Economy

• Economic Foundations
• Human Resources
• Research and Development
• Capital
• Physical Infrastructure
• Business Climate
• Quality of Life

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Making Location Decisions in a Knowledge Economy

• Economic Activity
• Competitive Clusters
• (competitors, suppliers)
• Local Goods and Services
• Institutional Linkages
• Governmental Supports

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Clusters as a basis for strategy

• Identifying local competitive advantages - not
  picking winners
• Reflect the legacies of market realities and
  public investment
• Public sector is a critical partner to
  competitiveness, re foundations
• Public-private collaboration is essential
• Cluster-focused investments follow, and support,
  directions set by the market.

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Torontos Approach to Clusters
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Torontos approach

• Long term view - historical and future
• Cluster geographies are variable
• Ongoing performance benchmarking is necessary
• Sector specialists play varying roles depending
  on industry requirements
• Focus on cross-sectoral issues to advance range
  of clusters

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Toronto CMA Cluster Performance
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Torontos Rank among 10 North American Centres
North American Ranking (2000update)
Ontario RankingSource Toronto Competes An
Assessment of Torontos Global Competitiveness,
Feb. 2000
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Torontos Cluster Program

• Benchmark Competitive Position and Results
• Evaluate Which Clusters to Focus Upon
• Develop Cluster Plans with industry to Advance
  Growth
• Address Cluster gaps and Infrastructure needs
• Support Existing Businesses, attract New
  Companies incubate Startups
• Put Toronto/Canada on the map

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Torontos Cluster Development Program

• Active
• Biomedical
• Financial Services
• Fashion Apparel
• Food Beverage
• ICT
• Tourism
• Film Media
• Developmental
• Design
• Business Professional Services
• Monitoring
• Aerospace
• Plastics Chemical

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Sample Analysis Financial Services
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4th Largest Financial Services Centre in North
America
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Spatial Distribution of Financial Services
Employment, Toronto, 1999
The Financial District, and a corridor running up
Yonge Street, are the major concentrations of
financial service employment in Toronto.
Source Dun Bradstreet
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High-End Financial Services are concentrated in
the City
Educational Attainment in Financial
Services City of Toronto and the Rest of Ontario
City of Toronto
Rest of Ontario
Financial Services
Financial Services
lt 12 Yrs.
lt 12 Yrs.
Univ Deg.
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4
HS Diploma
HS Diploma
Univ Deg.
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20
42
Post Sec
Post Sec
9
14
Certif
Certif
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Torontos Financial Services Sector Growth Rate
Outpaces Other Centres
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We Could No Longer Take the Cluster for Granted

• Bank Merger Debate Highlighted the Need to Become
  Globally Competitive
• Locally, Financial Services
• Produces 28 GDP
• 10 direct City employment
• Major exporter
• Banking/Insurance/Securities Not Used to Working
  Together

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Torontos Role

• Conducted Initial Cluster Review
• Formed the Toronto Financial Services Alliance
  (TFSA) - All Industries, Academia, Business
  Services, Government
• Produced Year One Work Plan and Provided Staff
  Support
• TFSA Developed a Common Action Plan
• Adopted by an Historical Gathering of Industry
  CEOs

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2003 TFSA Work Plan

• Create an information bank, of statistical data
  and competitive analysis.
• Industry competitiveness survey on core strenghs
  and niche opportunities
• Engage all levels of government on common
  issues.
• Raise national and international awareness of the
  Cluster and investment opportunities.

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2003 TFSA Work Plan contd

• HR/Education needs assessment
• Industry and academia forums to increase
  collaboration
• Support improvements of Torontos physical
  infrastructure and quality of life.
• Develop and implement a sustainable TFSA
  Organization.

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Sample Analysis Bio-Medical
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Torontos Bio-medical Cluster
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Bio-Medical Cluster 1st in North America

• 80,000 jobs
• 4 billion in annual revenues
• Areas of Specialization
• Medical Research - 400 million annual
• Generic drug manufacturing
• Headquarters for Aventis Pasteur, Bayer, Eli
  Lilly, Ortho Pharma
• U of T - Medical School
• Downtown Science Park

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Torontos Role in the Bio- Medical Cluster

• Cluster Intelligence
• Identify Leading Niches and Competitive
  Advantages
• Identify Strategic Issues and Opportunities
• Commercialization
• Toronto Biotechnology Commercialization Centre
  (TBCC)
• Bring Sub-sectors and Stakeholders Together
• Develop action plans
• Implement Key Initiatives
• Promote Cluster Capabilities

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Torontos Key 2003 Bio Projects

• Business Development
• Cluster Innovation Strategy
• Bio Finance Conference - May 2003
• Business Networks
• Toronto Biotechnolgy Initiative (TBI).
• Marketing/Promotion
• BIO2003
• Torontos Discovery District Visual Identity
  Program
• Infrastructure
• MARS/Toronto Biotechnolgy Commercialization
  Centre
• Discovery District Capital Program

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Other 2003 Cluster Activities

• Film
• Studio development project
• Film policy issues
• Fashion
• Apparel Industry Development Corp.
• Design
• Tax Credit proposal
• Industry HR needs assessment
• Food Beverage
• Co-packaging study
• Real estate database
• Labour force development study
• ICT
• Interactive digital media study

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Lessons Learned
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Lessons Learned

• Cluster Development is Only One Economic
  Development Strategy
• Not about Picking Winners
• Must be Linked to other Approaches
• Know Your Strengths
• Benchmark and Build Upon Existing Concentrations
  of Business Activity
• Dont Go After What Everyone Else is Doing

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Lessons Learned

• Involve Broad Range of Stakeholders
• Businesses,Suppliers, Associations, Education,
  Govt., Council Champions
• Each Cluster Has its Own Plan and Approach
• Action Plans/Projects Must Meet Industry Needs
• No Cookie Cutter Strategies
• Cluster Development is a Long Term Strategy

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Future Directions

• Dig Deeper into Existing Clusters -
• What are the core competitive advantages
• Refine Action Plans
• Assess Potential of Other Clusters
• Build Linkages with Other Initiatives
• Labour Force Rediness Plan
• Enhancing Design and Innovation Capacity
• Toronto Brand Development
• Assess and Enhace Interelations between Clusters

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www.toronto.ca/business invest_at_toronto.ca