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Four reasons TD Bank thinks Waterloo is a “rising tech superstar city”

A new report from TD Bank Group's Economics team calls Waterloo a "rising tech superstar" and model for other small cities in Canada.

In a new report from TD Bank Group’s economics office, the Waterloo community is classified as a “rising tech superstar city” that represents a model for jurisdictions intent on avoiding the regional economic and income disparity found in the United States.

The report is called “The Digital Divide Between Canadian Cities” and focuses primarily on whether the distribution of digital services jobs in Canada has created inequality akin to that found in the United States, where tech hubs like New York City and San Francisco have dramatically outperformed cities like Detroit and Cleveland.

The answer is no. American-style regional inequality is not evident in Canada, largely due to the continued strength of Canada’s goods-producing sector. However, Canada is fertile ground for such inequality, especially as the vast majority of digital services employment is concentrated in just five Canadian cities.

This is where Waterloo comes in.

The authors point out that policymakers must work harder to extend the dynamism and efficiency of clustering to more regions, and they highlight Waterloo as the poster child for this sort of development.

As a small city with a strong tech cluster, separate and distinct from the tech industry in nearby Toronto, Waterloo presents a good case study for the development of “rising tech superstar cities” outside of Canada’s big five.

Here are the four reasons TD Economics gave Waterloo “rising tech superstar city” status:

1. Two major universities churning out talent

A significant amount of the credit for Waterloo’s tech strength is thanks to its local post-secondary institutions. Not only do they produce high-quality talent that feeds the needs of our tech industry, but they also produce a huge number of our entrepreneurs, including the founders of BlackBerry, North, Vidyard, Kik and more.

The University of Waterloo is Canada’s top technology school – we just published a piece about its unbelievable tech credentials – and Wilfrid Laurier University produces some of Canada’s top tech business minds.

The report also highlights the importance of strengthening partnerships between tech firms and institutions of higher learning to help ensure students enter the workforce with in-demand skills. Again, Waterloo’s ecosystem fits the bill as the University of Waterloo is home to the world’s largest co-operative education program.

While TD calls out the two universities, it’s important to remember that Conestoga College is also producing high-demand talent in tech-centric programs including applied computer science and engineering and has a strong co-op program of its own.

2. Economic development board with a vision

We’d love to take all of the credit here, but the reality is that Waterloo’s economic development vision started with the community’s business and civic leadership. The business community founded the University of Waterloo and instigated the creation of its world-leading co-op program.

Kitchener’s civic leaders, along with their regional partners, created a plan for building a collaborative tech ecosystem that worked so well we now have Google, Deloitte, a bevy of scale-ups, more than a thousand startups and a several billion dollars in new development in the city core.

Waterloo’s vision comes from its emphasis on collaboration. In fact, the founding of Waterloo EDC and its governance and operational model are perfect examples – we receive funding and partnership from our municipal governments and leadership and guidance from the local business community. Our governance model, which features a private sector board of directors, is considered a best practice and being replicated by other economic development corporations. This makes us uniquely capable of focusing on results.

3. Ability of non-profit organizations to attract venture capital

Organizations like Communitech and the Accelerator Centre – also the products of public and private collaboration – have made a significant contribution to the growth of the Waterloo tech community. Not only do they provide the space and mentorship necessary to grow fledgling companies, but they also advocate on the tech community’s behalf and attract the attention of venture capital. In the last few years alone, companies like North, ApplyBoard, Faire, eSentire and others have attracted hundreds of millions of dollars in investment while appearing on lists of high-potential Canadian tech companies.

4. Expanding infrastructure services

This is a continuing focus area for Waterloo. Just months ago, our community opened a new light rail transit system that connects many of our area’s top tech innovation assets: both universities, the Kitchener and Waterloo cores, companies like Google and Shopify, and support organizations like Communitech and the Accelerator Centre. Waterloo is the smallest community in Canada to launch a light rail system.

Over the last few years, consistent advocacy has seen an expansion in rail service between Waterloo and Toronto, substantial new investment in further expanding this to “all-day, two-way” service in the near future and new options for reaching Toronto Pearson International Airport, including Greyhound buses.

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