Local IDEAs

Local Indicator Database for Economic Analysis

Pathways to Ontario’s Knowledge Economy

Richard Florida, Shade Shutters, & Greg Spencer


Ontario, like many jurisdictions, is currently facing major economic upheaval due to rapid advances in technologies, increasing open borders, and shifting work practices. It is a time of significant anxiety but at the same time there is a sense of possibility. The way forward has been made abundantly clear, in order to succeed in the 21st century economy places must develop vibrant ‘knowledge economies’ underpinned by creativity, innovation, and entrepreneurship. Turning the rhetoric into reality is the stumbling block for policy makers. Exactly how these things are achieved presents a series of difficult choices, which if not taken wisely, can prove to be costly mistakes. In the context of finite public resources the pressures to make efficient decisions with taxpayer dollars is ever increasing. When it comes to economic development strategy the term ‘picking winners’, meaning choosing to support and invest in certain industries and firms over others, is often derided. Yet, governments like Ontario do have to make judgements about where to direct resources if they want to develop their knowledge economies further. This report presents a system for identifying the most promising pathways for economic growth on a region-by-region basis within the Province of Ontario.

The Government of Ontario is well aware of what its economic challenges are. Finding solutions to these challenges is the hard part. To this end it has appointed Ed Clark, former CEO of the TD Bank, to chair the Premier’s Advisory Council looking at how to best use public assets to spark the development of the knowledge economy. In his work so far Clark acknowledges that, “we must avoid a race to the bottom and instead participate in the parts of the economy which pay more but where we are competitive”, while acknowledge that, “we must double down on winners”. The government certainly realizes that a blanket approach of supporting all is not an efficient strategy, but rather attention should accrue the parts of the economy that offer the best prospects in a globally competitive and knowledge-driven economy. The recent change in the Federal Government has also led to a significant policy shift that is congruent with Ontario’s. During his time at the World Economic Forum in Davos Switzerland, newly elected Prime Minister Justin Trudeau sought to rebrand the country as a knowledge powerhouse remarking that, “my predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness”. This approach has also been widely and enthusiastically promoted at the local level by mayors, boards of trade, and institutional leaders such as university presidents. Writing in the Globe and Mail, the presidents of McMaster, The University of Toronto, and The University of Waterloo, recently argued for the creation of a ‘supercluster’ focused between the cities that house their campuses, stating that, “truly innovative economies and ecosystems are anti-fragile. They aren’t just resilient in the face of change — they thrive on it. This is the economy we envision for a Southern Ontario innovation supercluster driven by Toronto, Waterloo and Hamilton”. While much of the will and the rhetoric are now tightly aligned, there remains a great deal of work to be done on constructing actual policies and systems that will help build Ontario’s knowledge-based economy.

Sound economic development strategy pays close attention to context. It is not only specific to existing structure, but also local in nature. A large jurisdiction like Ontario must account for the differences between regions and build on local strengths rather than implement strategies based on the latest alluring trend being sold by faraway futurists. In this report we present a detailed accounting of the existing local strengths of Ontario’s 15 metropolitan regions in order to identify the sectors that are the top prospects for future growth. Provincial policy already formally recognizes the importance of local strategies for economic development through its cluster policies. While these polices take an industrial location approach, this report seeks to meld this with a labour market, or talent-based approach to local economic development. Richard Florida’s insights of the ‘creative class’ highlight the importance of talent attraction and retention in relation to local prosperity. This report presents a system for identifying local industrial strengths and future prospects based on its current stock of talent. The report examines the detailed occupational profiles of Ontario’s city-regions and maps these onto industries that require specific sets of workers. The overall aim is to provide a system for evaluating the quality of potential investments under consideration by the Government of Ontario and its local partners with an emphasis on well-paying, export-oriented, and knowledge-intensive economic activities.


Click here to see the full working paper.

This working paper was presented at the Regional Studies Association 2nd North America Conference in Atlanta, GA June 15-17, 2016. Click here to download the slides..

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