The chatter in the public domain around the technology industry in Canada is increasing by the day. Articles, blogs opinion pieces and tweets debate at length the next location of Amazon’s HQ2, Sidewalk Labs’ investment in Toronto, and the qualities of the iPhone X.
Similarly, the share of voice around the startup community is also growing: the prospect of tech talent moving north across the border to spawn new companies, the increasing prominence of co-location work spaces and incubators, and the various programs focused on funding start-ups continue to get more than their fair share of ink.
There’s a middle ground here, however, that gets less attention, the least share of voice and practically zero press coverage: Canadian scale-ups.
These companies are Canadian-born, are growing organically and do not have acquisition plans. While they are short on press, they are long on IP creation, on their ability to sell their services globally and in refining their innovations at home. Most do not operate out of brick-and-beam locations, but do report considerable payroll numbers to Revenue Canada. And the revenue and staff count of one scale-up is exponentially larger than that of the hottest startup in the market on any given hour.
Toronto area’s York Region is the home to over 4,300 technology companies: the densest tech hub in Canada with the highest percentage of tech labour force in the Toronto-Waterloo corridor.
Most of these firms operate in the enterprise software solutions space; put simply, companies here develop solutions which are sold to other companies. Partly for this reason, the companies lack the name recognition of consumer technologies: Facebook, Amazon and Apple are household names and directly influence our lives.
However, consider companies like…
- Book4Time in Markham, an enterprise software company that develops cloud-based spa & wellness reservation management systems used by top hotels and resorts in over 65 countries.
- Mircom Group of Companies in Vaughan with a headcount of over 500 employees, whose integrated building communications and security solutions are deployed in over 100 countries worldwide.
- Markham FinTech company, Real Matters closed its IPO at $156.7M – only the third firm to raise more than $100M since 2014.
- Compugen in Richmond Hill will be the IT provider for the Mackenzie Vaughan Hospital’s Integrated “Smart” Technology – the first SMART hospital in Canada.
- Markham-based Redline Communications develops outdoor wireless systems solutions for oil fields and other challenging environments globally.
The list can go on, but the story is the same: companies in the mushy middle are the real Canadian technology success stories, and are mostly invisible in the overarching conversation. And despite the different verticals these companies have remarkably similar challenges: talent attraction and retention being the primary source of concern.
In the cluster development work our group does, we are continually asked by FDI agencies, trade commissioners and prospective clients, “Why are all these companies here?”
It’s a multi-dimensional answer, but a large part of it comes down to talent. Generalizing, companies that are at scale up level seek to hire and retain mostly experienced technology, sales and leadership executives. And with the spend on talent consuming more and more of a tech company’s costs, locating where the talent is has become critical to a company’s growth position.
York Region is home to the GTA’s top technology talent, and especially to those employees that have reached a certain level in their careers and lives.This talent is the key driver of the Region’s leadership position in the country, and why this jurisdiction is the preferred location of dozens of Canadian scale ups.
These companies deserve recognition as the beating heart of the technology industry in Canada. And the tech conversation should be re-focused on the eye of the hurricane at home, regardless of where Amazon ends up.
