Canada's New Economy Geography

For those of you interested in the locational pattern of new economy businesses, this article may help. The news is not good for rural and small town locations. The findings are not especially surprising, but they put some numbers on how much of the knowledge sector is concentrated in large cities.

Canada's high-tech revolution is disproportionately a "big city" phenomenon, according to a new study. During the 1990s, Ottawa cemented its position as a high-tech city. But Toronto was the true employment center for firms in information and communications technology (ICT) industries. Calgary and Montréal enjoyed strong employment gains in research and development-intensive science industries.

During the 1990s, employment growth in Canada was fuelled by job gains in the technology sector. One out of every six jobs created during the decade was in the ICT sector. In Canada's largest cities, ICT industries accounted for 4 out of every 10 new jobs.

In 1990, Canada's largest cities, those with over a million people, were home to about 63% of Canada's ICT workforce. ICT employment growth in these cities was rapid. By 2000, the largest cities accounted for almost 70% of ICT employment.

In contrast, the share of total employment in these largest centers stood at just under 45% in 1990 and 43% in 2000.

Not only were large cities a magnet for firms in the ICT sector, but these companies were an important source of employment creation in large centers.

During the 1990s, 4 out of 10 new jobs in large cities were created by businesses in the ICT sector. The contribution of such industries to local employment growth in these large cities cannot be overstated. These centers experienced lackluster growth in total employment through the 1990s - an average increase of 8.2% compared with the national rate of 12.2%.

The growth of ICT industries in large cities is consistent with the general tendency for firms in new industries to locate in cities with larger populations. However, the size of the local economy is not the only factor that has a positive influence on the location decisions of ICT firms. The level of industrial diversity in a local economy also has an impact.

Download report here.