Tech boom risks creating starkly rich and poor Canadian cities

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An ongoing tech boom has the potential of creating very rich and very poor cities across Canada. As the economy shifts towards high tech and away from manufacturing, the differences in economic outcome will accelerate and become quickly apparent.

The report, titled “The Digital Divide Between Canadian Cities,” notes that high-paid tech jobs in Canada have been concentrated in just five cities: Toronto, Montreal, Vancouver, Ottawa and Calgary, which together have 70 per cent of digital services jobs.

Meanwhile, in Canada’s smaller cities, the manufacturing base has been eroding for years, particularly since 2010, the report found. Those relatively high-paid factory jobs are being replaced by lower-paid retail jobs.

Toronto has been creating more tech jobs than Silicon Valley recently, and Montreal, Vancouver, Ottawa and Calgary are all among the top centres for tech hiring in North America.

But the downside of this concentrated boom is that Canada risks becoming economically segregated like the United States, where a small number of tech-oriented cities have booming job and housing markets, while other cities struggle with economic decline, the report’s authors warned.

“The poster children of this impact include the likes of New York, Washington, San Francisco and San Jose, which have captured the spoils of employers at the expense of cities like Detroit, Cleveland and Kansas City,” they wrote.

There is a thing called a City Skills Trap which means when a person wants to move to one of the “winner” cities face a higher cost of living “and that makes it harder to advance financially and professionally.

Meanwhile, the people who are stranded in declining cities cannot advance themselves because they get trapped in these areas that don’t offer opportunities beyond lower skilled jobs.

Proper planning now is required in order to avoid or minimize such a fate. One example being thrown around is the development of the Kitchener-Waterloo-Cambridge area now an internationally recognized tech powerhouse, its two universities offer STEM (science, technology, engineering and mathematics) which is spurring on the development of well-paying jobs and economic growth in the region. Something other Canadian cities can only dream about.

For some places, it may be as simple as being near one of the “superstar” cities, and selling yourself as an accessible, more affordable alternative to that city, Mississauga comes to mind, Milton even.

Hitching the fate of declining cities to the tech superstars is more realistic in Canada than in the U.S., the report noted, as 60 per cent of Canadians live within 200 km of a tech hub, compared to 26 per cent of Americans.

Planning now for the future based on the American experience will help Canadian cities to avoid the problems and inequalities they’ve faced in their cities. -CINEWS

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