Toronto's AI tech sector primed to 'skyrocket'

Toronto's artificial intelligence (AI) industry is on the brink of a substantial surge, according to McKinsey, a leading business consulting firm. The city, recognized as one of 16 global hubs focusing on technological advancements, particularly in AI, is rapidly establishing the essential infrastructure to position itself as a global AI powerhouse.

Federico Berruti, a partner at McKinsey, highlighted Toronto's attractiveness for tech entrepreneurs and its historical significance in pioneering various aspects of foundational AI movements. In a recent interview with BNN Bloomberg, Berruti expressed confidence in Toronto's potential, citing the city's rich history of contributing to the AI landscape.

"Canada also is an attractive place to work, and it has grown significantly in this area... it's translated into significant funding from the investment community," noted Berruti. He pointed out a substantial increase in the number of tech workers in recent years, affirming that the foundational elements are in place for Toronto's AI sector to skyrocket.

AI Infrastructure Growth in Toronto

The growth of Toronto's AI sector is closely tied to the expansion of its AI infrastructure and the increasing population of tech workers. The Vector Institute, an independent non-profit organization dedicated to AI research, has been a key player in this regard since its establishment in 2017. Providing training, fostering partnerships, and supporting start-ups and students, the Vector Institute has contributed significantly to the city's AI ecosystem.

Recently, Unilever, a British-Dutch consumer goods company, selected Toronto as the location for its first global AI lab. Unilever cited the city's strategic importance due to its existing concentration of AI expertise. This move by a major multinational corporation underscores Toronto's global appeal as a hub for AI innovation.

Overcoming Challenges for Continued Growth

Despite the optimistic outlook, Berruti emphasized the need for both governmental and business community support for the industry to thrive. He highlighted a potential hurdle in the form of compensation for tech professionals in Canada, which is estimated to be 40 to 50 percent lower than their counterparts in the United States. This wage gap contributes to a "brain drain," where talented individuals may choose to pursue opportunities elsewhere.

Berruti also cautioned against the trend of successful Canadian technology companies relocating as they expand, emphasizing the importance of fostering an environment conducive to growth domestically. To ensure the success of Toronto's AI sector, he emphasized the need for collaboration among institutes, incubators, universities, regulatory bodies, and companies.

"Institutes, incubators, universities, regulatory components, and the companies need to come together to create the right kind of situation for the ingredients to go to the next level if we want it to be a Canadian success story," urged Berruti.

As Toronto lays the groundwork for its ascent as a global AI hub, addressing these challenges will be crucial to sustaining the momentum and realizing the full potential of the city's AI sector.