Tech Data Points: Waterloo vs. New York

It’s undeniable that Waterloo and New York differ vastly in size. New York City’s population is over 10 times larger – at more than eight million people – compared to Waterloo Region’s nearly 700,000.

But despite the size difference, the vibrant tech sectors in Waterloo and New York are neck and neck. With diverse workforces, proximity to excellent universities and vibrant networking cultures, they should be top contenders on your expansion shortlist.

Consulting comparative data is one of the best ways to determine the best destination for your growing tech company. Comparative data are the numbers that objectively identify a community’s strengths and weaknesses.

Below is an apples-to-apples comparison of Waterloo and New York based on quantitative data pulled from reliable sources, such as CBRE’s 2024 Scoring Tech Talent report and the Economic Research Institute.

The charts analyze tech workforce size and growth, population growth, company costs, payroll taxes and more. We’ve already challenged Silicon Valley, Pittsburgh and Austin – New York is next to battle it out with Waterloo.

Data Point #1: Tech workforce size and growth

At first glance, it looks like an easily won victory for New York in terms of tech workforce. It’s 13x bigger.

However, to critically analyze the comparative data, Toronto’s tech workforce should be factored in, too. Why? At just 105km/65mi away, Toronto is close enough to Waterloo that the two cities function as a single innovation corridor.

Resources, talent and innovation flow easily throughout the larger region. Combined, Waterloo and Toronto’s tech workforces amount to 343,200 – just shy of New York’s total.

Now that we’ve determined Waterloo and New York to be on a more equal playing field when it comes to tech workforce, we can turn our attention to tech talent concentration and growth.

Waterloo’s talent concentration is 9.6%, more than 5% more than New York. Waterloo’s tech talent growth is an impressive 45.5%, nearly 40% more than New York – this is a real tech hub.

Clearly, Waterloo is an attractive destination for growing tech companies, big and small. Our high concentration of tech talent and thriving tech workforce growth are key factors for companies that choose to expand here.

Partner and CTO of Inovia Captial (and former Head of Engineering at Google) Steve G. Woods says, “With a top talent market and a truly unique collaborative ecosystem, Waterloo is one of the best places in North America to grow a tech company.”

Data Point #2: Population growth

While Waterloo’s young population is growing, New York’s is dwindling. The city’s growth in both age demographics (20-30 and 30-40) is actually trending downward. These demographics represent young professionals and millennials, who make up the largest chunk of the workforce.

People want to live in Waterloo. According to Statistics Canada, our community has been one of Canada’s fastest-growing regions for the last five years. The availability of opportunities, quality of life and cost profile all contribute to Waterloo’s exceptional growth.

For business leaders looking to expand, population data is a key factor in finding a location with a strong pipeline of available talent and a quality of life you want to offer your employees.

Data Point #3: Estimated one-year company costs (USD)

This data point comes as no surprise. New York is well-known as an expensive place to live and work. Based on 60,000 sq. ft. of office space and wages for 500 people, it will cost you $30M more to operate for a year in New York than Waterloo. That’s a striking 57% difference.

For companies that need access to talent and a good quality of life without breaking the bank on a physical location, a smaller hub like Waterloo makes more financial sense in the long run.

Data Point #4: Payroll taxes

As a business leader in Waterloo, you’re paying about $4,258 per year in payroll taxes for a Software Engineer earning $82,515. In New York, that cost jumps to $11,646 annually for an engineer earning $144,992 – one of the highest payroll tax rates in North America.

That’s a significant difference when factoring in costs like unemployment insurance, Medicare, and social security. Choosing a location with lower payroll taxes can make a meaningful impact on your bottom line, helping your company allocate resources more effectively.

The financial advantage here is evident. To ensure your company can thrive in a new location, it’s important to determine which area offers cost-effective strategies for every aspect of your business, including taxes.

Data Point #5: Corporate tax rates

Although your primary focus might be on talent, supply chains and ecosystem strength, comparing taxes across jurisdictions is a critical piece of the expansion puzzle. Neglecting to consider taxes can result in a significant ongoing cash burden for your company, resulting in costs ranging from thousands – or millions.

In Waterloo, with a 26.5% corporate tax rate, you can save more than 2% annually. Over time, that adds up. Waterloo offers excellent cost advantages over most American tech hubs, positioning our community as a cost-effective option for expansion.

You won’t be sacrificing quality, either. In their 2024 Scoring Tech Talent Report, CBRE reported that out of all 50 markets analyzed, Waterloo provides the best value when it comes to cost and quality.