A new study examining the state of foreign investment in the Toronto region—Roadmap to Revizalization—includes some important calls to action for spurring local economic development. The Greater Toronto Marketing Alliance (GTMA), a public-private partnership, released the study last month. Among its members: all the municipalities and regions that make up the GTA, along with private and public sector partners.
"Foreign Direct Investment (FDI) is accelerating as a key driver of economic growth," reports the Roadmap. "Over the period 1990 to 2011, FDI globally grew 75 per cent faster than Gross Domestic Product (GDP). When foreign firms open up shop here they create jobs and capital investment, and generate tax revenue that feeds back into the Canadian economy."
There are also knock-on effects: an influx of talented workers, and a more dynamic, innovative economic environment in general. And crucially, these benefits spill across municipal borders: it's not a question of pitting one city in the region against another in an attempt to attract a new office HQ, for instance, but understanding that as soon as one foreign investor sets up here, the benefits will be distributed, which is why the report's key conclusion is so crucial.
"The GTA currently lacks effective regional coordination," writes the Roadmap, in attracting FDI. Multiple organizations and levels of government all try and tackle this issue, but they are not working in concert, and in some cases find themselves at odds. If the Toronto region is to strengthen its capacity to attract foreign investment, in short, we need to start pulling together in a coordinated and organized way.
"The Toronto region is the primary engine for FDI attraction in Ontario and in Canada, representing 52 per cent and 24 per cent respectively of all FDI activity," the Roadmap explains. We perform relatively well compared to other North American regions, but globally we are ranked 18th of 27 cities. And this, says the report, has a lot to do with how we pitch ourselves.
It isn't that the Toronto region lacks the relevant, appealing qualities foreign investors look for: "This performance is at odds with the Toronto region’s relative attractiveness as a destination for foreign direct investment. For example, on a global basis the Toronto region ranks high in terms of key FDI drivers such as size, location, demographics, economic growth, skilled labour, infrastructure, ease of doing business and the provincial and federal fiscal policy environment."
So how do we improve? Among the recommendations:
- Increased resources in attracting FDI. (The study found that Toronto spends considerably less, per capita, on attracting foreign investment than many other comparable cities.)
- Coordinated, clearly planned out strategies which give all stakeholders defined roles in attracting FDI. This should include agreement on strategically selected "target sectors and markets"—ideally about 9 or 10 of them.
- More extensive private sector involvement, which is lower here compared to many other regions.
"The Toronto region is significantly underperforming relative to its potential," the report concludes. "The opportunity is significant, and the ROI is clear. But money alone will not be enough to fix the current situation. Significantly improved collaboration and coordination of efforts across a broad range of organizations is needed."
Writer: Hamutal Dotan
Source:Roadmap to Revitalization