March 4, 2015
Across Ontario, mid-sized cities like London are counting on entrepreneurs in growth areas such as information and communications technology (ICT) to create jobs and economic prosperity.
On the surface, the conditions for growth appear to be in place. Companies have access to highly-qualified university and college graduates and also benefit from a high quality of living relative to Toronto and Ottawa where, despite higher wages, real estate, transportation, and other goods and services are far more costly. London, like many other mid-sized cities, seems to have the potential to court champions for growth, and prevent migration of entrepreneurial firms to already crowded markets elsewhere.
We want to know why some firms choose to stay while others leave; why some experience unprecedented growth while others stagnate. To better understand the economic health of Ontario’s mid-sized cities, we organized an industry roundtable of several ICT executives in London with the help of two experts – Kadie Ward, the Founder of Build Strong Cities, and Darren Meister the John M. Thompson Chair in Engineering Leadership and Innovation at Western University. We asked these executives about their experiences in the city and what they saw as the bottlenecks impeding their growth locally.
“I’ll work in Toronto, but I’m not coming to London.”
Their chief concern is barriers to hiring top talent, which they attribute to a skills shortage. Specifically, they told us that difficulty finding highly-skilled software developers is a major bottleneck to their companies’ growth. Programming experience with certain types of code (iOS, Objective-C and Android) are in demand, but difficult to find locally. On the other hand, these companies said the supply of candidates with sales and marketing experience was good, and they feel the city has a deep pool of talented content creators.
Programming experience with certain types of code are in demand, but difficult to find locally.
Firm leaders all agreed they did not poach candidates from local competitors, citing the relatively small talent-base from which to draw, and noting that such tactics are ultimately counterproductive. In order to find the talent they require, they’ve gone beyond London; but they have only been partially successful at attracting top talent to Southwestern Ontario, losing the competition for talent with what they perceived to be more desirable larger cities, like Toronto. When one company’s recruitment efforts failed, they resorted to opening a satellite office in Toronto, after many potential recruits stated “I’ll work in Toronto, but I’m not coming to London.”
Regarding London’s distance to Toronto, roundtable participants expressed frustrations in travelling from London to key markets as a reason to open offices in other cities that are better-connected nationally and internationally. Specifically, the loss of the United Airlines London-Newark flight was unanimously bemoaned as a net loss to doing business in London.
Given the relative scarcity of experienced developers, newly-minted local graduates are increasingly becoming central to companies’ hiring strategies. Participants commented that despite high quality undergraduate training, it can take an additional two- to three-years of on the job training for junior employees to achieve the necessary skills to thrive in the ICT industry. In general, they believe the pool of students graduating from local degree programs who are willing to stay in London is shrinking. Some executives commented that much of what students learn is more relevant to large corporate IT departments with legacy systems than the needs of start-up firms. They praised Waterloo’s co-op program as well as another local initiative: the joint Media Theory and Production program between the local trade college (Fanshawe) and Western University.
Keeping the Talent You’ve Got
Talent retention was another challenge to firm competitiveness. One executive expressed frustration in having borne the cost of training new hires, only to see several leave for large, multinational firms outside of London after cutting their teeth at a small start-up. Members of the roundtable explained that more and more, when making hiring decisions, they are increasingly weighing the likelihood that a potential candidate will leave the area instead of putting down roots in London.
ICT is not the only growth industry for Ontario’s mid-sized cities, however, talent recruitment and retention, distance to major international and domestic business hubs, and the ability for firms to grow are likely common issues faced by senior leaders of firms in many sectors across the province. If mid-sized cities, once the manufacturing powerhouses of Canada, are to be harnessed as centres of growth, we must first understand barriers thwarting sustained success and also leverage the value proposition they offer the province in stimulating growth and development.
Understanding the myriad ways that key actors (governments at all three levels, the private sector, and others such as universities, colleges and non-profits) can work together to pave a road to prosperity is at the heart of the Mowat Centre’s new research project on mid-sized cities as engines of growth.
Members of the roundtable explained that more and more, when making hiring decisions, they are increasingly weighing the likelihood that a potential candidate will leave the area instead of putting down roots in London.