As technology increasingly dictates how the world evolves, big cities will profit while other locations fall behind.
A report from TD Bank has analyzed the digital divide between Canadian locales. It predicts that superstar cities which attract highly paid tech workers will leave their smaller counterparts struggling: a trend that’s already become apparent in the U.S.
The study notes that high-tech jobs are already clustering in a handful of cities. Five urban centres—Toronto, Montreal, Vancouver, Ottawa, and Calgary—account for approximately 70 percent of all digital services. Until 2005, the four largest of those (Toronto, Montreal, Vancouver, and Calgary) saw job growth increase at roughly the same rate as all of Canada’s larger metropolitan areas. After the global financial crisis in 2008, however, high-paying jobs began to pool in the country’s biggest cities.
In America, the geographic concentration of skilled digital jobs creates huge inequality in wages. Data collected in an independent study suggests that the U.S. metro areas with the highest concentration of tech workers also have higher overall annual salaries for every other kind of field. In other words, having a thriving tech industry benefits the whole city.
The TD report suggests that a similar phenomenon might not be as dramatic in Canada. Evidence suggests that the country doesn’t have a similar level of regional inequality as the States, largely because it boasts a broader set of sectors on the come-up. Finance, real estate, construction, transportation, warehousing, healthcare, and social assistance all join tech as some of the fastest growing jobs, with roles spread across both high- and low-skilled industries.
Nevertheless, if these sectors don’t grow at a similar rate to technology, regional inequality will become more pronounced over time. The four largest Canadian cities house tech workers that are highly qualified, and real estate that is comparatively cheap. As a result, Vancouver, Toronto, Ottawa and Montreal are very attractive to tech firms, implying the technology sector might increase in size faster than the industries keeping its growth in check.
Certain other factors, though, could contribute to pumping the brakes on inequality. Unlike in America, immigration in Canadian tech cities is high, with Toronto and Vancouver attracting 33 percent and 11 percent of all newly landed individuals. Having higher levels of immigration, the study suggests, dampens the runaway growth of wages, and could help Canada from sliding into the same issues as the States.
Addressing the widening digital divide between regions matters because inequality leads to a worse-off outcome for everybody. Workers and firms in lagging regions miss out on opportunities for high-paid jobs at high-productivity firms, risking un- or underemployment. Individuals in high growth areas are more likely to suffer from burnout, a higher cost of living and housing, and traffic congestion, while companies find it increasingly hard to hire employees.
The study suggests four ways to counter that outcome, including teaching technology and computer literacy courses to kids as young as four, strengthening relationships between tech firms and universities, government matching of venture capital for companies, and building adequate infrastructure in smaller cities.
Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSays