With a deep tech talent pool, Toronto could hit Amazon's 'sweet spot' with bid for new HQ

Toronto faces stiff competition in its bid to court Amazon, but some Canadian tech experts agree that among the 20 cities short-listed as potential locations for the company's second headquarters, Toronto might just hit "the sweet spot."

While there are a litany of socioeconomic factors that the e-commerce powerhouse is said to be considering, one is of particular weight: the availability of talent. This is where Toronto shines, says Shauna Brail, director of the urban studies program at the University of Toronto. 

"It's probably the most diverse economy inside of all of Canada," Brail said of Toronto, adding that she wagers the city is likely among the top five contenders. "It's certainly a centre of attraction and for retention of highly talented and skilled workers."

Last week, the Seattle-based retail giant announced it had settled on 20 possible cities and towns to build its second headquarters. In all, Amazon received bids from 238 jurisdictions, including 10 in Canada. Toronto is the only Canadian city left in the running. 

The considerable pipeline of tech talent that Amazon could tap comes from two primary factors. First, the number of graduates flowing out of the city's top-tier universities is comparable or higher than other cities on the list. Second, a net migration of tens of thousands of people to the Greater Toronto Area each year means the workforce is constantly replenished with highly-trained individuals. 

Furthermore, Ontario has recently made broader investments into the province's tech sector that will likely buttress the highly educated workers already available. Last October, the provincial government committed $30 million to increase the number of post-secondary graduates leaving school with applied master's in artificial intelligence to 1,000 by 2022. 

Sean Mullin, executive director of the Brookfield Institute for Innovation + Entrepreneurship, a Toronto-based tech think tank, says that Amazon CEO Jeff Bezos is focused primarily on long-term sustainability rather than short-term profitability. Trends suggest the potential talent pool in Toronto will only continue to grow for the foreseeable future — a fact not likely to be lost on Bezos. 

'Attracting talent from anywhere in the world'

There are also larger, though related, geopolitical factors that may make Toronto particularly compelling for a multinational technology company. 

"You can make a very strong argument that having a second headquarters — one in Seattle and one in Toronto, outside of the U.S. — would be a great way to position Amazon for long-term success," says Mullin. 

Given the current prominence of anti-immigration voices in the U.S. and President Donald Trump's desire to limit immigration from certain regions of the world, building a second base in Toronto would give Amazon access to a more diverse talent pool.

I think Toronto will continue to grow and prosper regardless of whether Amazon comes here or not.- Sean Mullin, executive director of the Brookfield Institute

"These tech-based companies are really about attracting talent from anywhere in the world, so if you could have half your headquarters be in Canada and use that as a means to attract all the talent you couldn't bring into the United States, that's a very smart strategy," says Mullin. 

There could be political blowback domestically if Amazon were to choose the only Canadian city on the short list, but that's a calculus only Amazon can do for now, Mullin adds. 

According to Amazon's public relations material, its new headquarters could eventually generate some 50,000 jobs wherever it is built. The ultimate veracity of this figure is disputed, but the sheer size of the undertaking necessitates that the winning city offer other benefits for those employees. 

Both Mullin and Brail say the most notable players on the short list, aside from Toronto, include New York City, Chicago, Boston, Atlanta, Miami, Denver and Washington, D.C. Each presents its own particular advantages and disadvantages. 

'We don't need Amazon'

Factors like standard of living, affordability, public infrastructure and potential for growth are all important. While Toronto struggles with housing costs and public transit, it arguably falls into a "sweet spot" in which those drawbacks are tempered just enough by an immense talent pool, Mullin says. 

In addition to Washington, D.C., both northern Virginia and Montgomery County, Md., made the top 20. The three jurisdictions are adjacent and within driving distance of one another. The proximity of the locations has fuelled speculation that the U.S. capitol is the foremost contender, with the possibility of future growth into Virginia and Maryland.

Of course, Brail points out, some tech industry insiders believe Amazon has already made its choice and  the bid competition is simply a clever PR exercise. 

Toby Lennox, chief executive of Toronto Global, the organization fronting the city's bid, says in many ways Toronto is already competing with — and sometimes out competing — many of the prime contenders also on the short list.  

"We have consistently demonstrated that we're able to offer better talent at a much lower cost and with a better quality of life," he said. 

Unlike a number of other jurisdictions, such as Chicago and Newark, N.J., Toronto has opted not to offer any financial incentives as part of its bid, which could mitigate its chances. Similarly, critics of Toronto's fawning for Amazon's attention argue that, among concerns over the company's labour practices and alleged mistreatment of employees, its presence could decimate smaller tech businesses and start ups by poaching their top talent. 

Mullin says no matter what happens, it's important to remember that "we don't need Amazon.

"This was a confident bid by a confident city saying, 'we would like to have Amazon here, but we don't need them.' I think Toronto will continue to grow and prosper regardless of whether Amazon comes here or not."