Ontario is a global city - and it's taking a global approach to economic development.
The Canadian province made major headlines last year with the announcement of a new state-of-the-art $1.2 billion Toyota assembly facility in Woodstock and the subsequent spinoff supplier investments. (All dollar figures are in Canadian dollars unless otherwise indicated.) Now, the government is looking to strengthen its automotive cluster, as well as other key sectors, with an aggressive international outreach strategy designed to build stronger trade and investment ties in global markets.
Indeed, Ontario is already a major international trading economy. The province exports more per capital than Canada and the other G8 countries. In 2005, total Ontario international exports totaled $201.2 billion. That's close to half of all Canadian exports. Although exports to the United States represent 88.9 percent of that figure, Ontario has developed significant trading relationships with the likes of the United Kingdom, China, Norway, Mexico, Japan, Germany, and France. The province plans to add to that list in 2007.
"The manufacturing world is global in nature and reaching out to global markets to build relationships is the right approach," says Sandra Pupatello, Ontario's Minister of Economic Development and Trade. "The future is in making connections on the ground in countries like Tokyo, Shanghai, New Delhi, and other emerging markets. We already have staff in those countries and we are strengthening our ties."
Taking a World View
Ontario sees the world as its economic development oyster and is establishing international market centers around the world to prove it. Ontario Premier and Minister of Research and Innovation Dalton McGuinty officially opened Ontario's International Marketing Center in Tokyo last summer. It's one of seven centers Ontario currently operates in global markets, with three more set to open later this year. These efforts have helped the province attract significant new investment, particularly in the automotive industry.
In fact, Ontario's global automotive investment strategies have helped anchor 7,000 jobs and attract $7 billion in new automotive investments. Beyond the Toyota announcement, Ontario has wooed Hino Motors, Toyotetsu, Toyota Boshoku, Hayashi Canada, and Aisin. Honda Canada is also expanding its Ontario operations, adding a new engine facility at its Alliston site. It comes as no surprise, then, that Ontario's top-five international exports include motor vehicles, parts, and accessories, which make up 40 percent of the total, according to the Ministry of Finance.
Most Ontario-made vehicles and parts are exported to the United States, as are many other products - one reason the province opened its new Los Angeles International Marketing Center this past March. The Los Angeles office hopes to connect Ontarians to business opportunities in the Western United States. "The U.S. is our largest trading partner," says Pupatello. "By establishing a permanent presence for Ontario serving California, the U.S. Southwest, and Hawaii, we're sending a very positive message to investors and strengthening our relationship with these key markets."
In January of this year, McGuinty led a business mission of 100 Ontario delegates to India. His message: Ontario has what India needs to sustain its rapid economic growth and move its society forward. Ontarians and their Indian counterparts have signed dozens of cooperation agreements, including several reached by universities, colleges, and research organizations.
The Knowledge-Based Shift
The global marketing strategy is bearing fruit in a shifting economy. Research agreements are seen as key to that shift. Like many other regions of North America, Ontario reports a trend toward higher value-added sectors and knowledge-based employment. That trend is aligned with two key goals for the province: building its information and communications technology (ICT) and life sciences sectors, according to John Langley, director of the investment branch at the Ontario Ministry of Economic Development and Trade.
Over the past five years, Ontario's capital expenditure in knowledge-based services has seen a 7 percent boost as the economy migrates from manufacturing to service industries. "The demand for research and innovation is having positive impacts, and our ICT and life sciences sectors are growing," says Langley, noting that aerospace, pharmaceuticals, biotech, fuel cells, and environmental technology are hot investment areas in Ontario.
The sectors are growing, in part, because Ontario offers one of the most favorable research and development tax environments in the world. Only the Netherlands has lower costs, according to a KPMG international survey. Specifically, Canada's R&D cost advantage is 10.9 percent over the United States - and most Canadian industrial R&D is performed in Ontario. About half of Canada's top 100 corporate R&D spending comes from this province. As far as an available labor pool, Ontario's 20 universities and 24 colleges of applied arts and technology generate a steady supply of new graduates.
In a move to develop Ontario into an innovation hub, the McGuinty government is investing $3 million to establish the University of Toronto's first Premier's Research Chair. The chair creates solutions for business achievements that aim to spur the province's future prosperity. Through the Ministry of Research and Innovation, the government is investing nearly $1.7 billion through 2010 through research, commercialization, and outreach programs. "Our government is committed to research and innovation so that everyone in Ontario has a fair shot at success and more opportunities to build a better life for themselves and their families," says McGuinty, promising that Ontario's collective devotion to research and innovation will lead to exciting new products and services.
Commercialization at MaRS
The MaRS Discovery District - MaRS is short for "medical and related sciences" - is not new. But the not-for-profit corporation, founded by leaders from the business and public sectors to foster commercialization of Canada's science and technology innovations, is making major strides toward its goals. "We are looking to expand the MaRS site in downtown Toronto," says Pupatello. "There is real synergy here. If you go down the elevator, you are going to run into scientists, researchers, venture capitalists, and others who have the same goal: to commercialize research."
MaRS inked a deal last October with Biolink Canada-Ireland - a new Enterprise Ireland network initiative linking scientists, industry, academia, and government agencies from the Irish and Canadian life sciences sectors - to share knowledge that could lead to commercialization. And last November, MaRS joined forces with the Stockholm Science City, an initiative that teams Europe's research universities with the City of Stockholm and its surrounding county to share best practices and commercialization knowledge.
The MaRS Discovery District made national headlines in April when it announced a partnership with the Canadian Stem-Cell Network (SCN) to find financing for translational development activities that Aggregate Therapeutics is undertaking in the realm of regenerative medicine. The partnership will also build within MaRS the commercialization capacity in the field, and broker private financing for spinoff companies from Aggregate and SCN member institutions.
This partnership could be paramount, with the U.S. Department of Health and Human Services estimating the worldwide regenerative medicine market will reach US$100 billion by 2010. Regenerative medicine promises to cure previously untreatable chronic diseases and conditions including Alzheimer's, Parkinson's, diabetes, heart disease, renal failure, osteoporosis, and spinal cord injuries. "The creation of Aggregate Therapeutics is a major success story for Canada," says Frank Gleeson, chair of the SCN Board. "The new partnership with MaRS is a further sign of the inclusiveness that characterizes Canada's unique, collaborative approach to commercializing basic science to produce better medicine."