The Ascendancy of Toronto

[Paleo]

I am amazed that almost everyone around me is so convinced that Toronto and area is going to remain a great place to live. Well, I want to challenge that notion. I believe this area is destined for a severe economic downfall. Due to the twin forces of globalization and technology, we continue to good paying jobs that are not being replaced. The core base of our region's communities are being hollowed out and it's becoming increasingly cost prohibitive to perform any real productive work in the area.

I am an educated young working professional born and raised in the golden horseshoe and I am extremely worried about my future here to the point where I am not making any life decisions that will make it difficult to move away at the drop of a dime.

To be fair, whatever I believe is going to happen to Toronto and area is what is happening and already has happened throughout the developed world.

When are you moving to China and how is your mandarin?

 

[TrickyRicky]

loggedout, I think your concerns are valid but overstated. Besides this is largely an issue of life paradigm. Picture a continuum where on one extreme people are builders, on the other extreme people are opportunists. I make no judgement and do not consider any point on this continuum to be morally superior. Extreme builders and extreme opportunists are rare. Most people fall somewhere in between. However the most successful people tend always to be one of these two extremes. Why are extreme builders and extreme opportunists rare? They are rare because the average person does not give themselves permission to take the lead and build, or let go and risk seizing the opportunity.

What does this have to do with Toronto, it's future and future opportunity vis a vis it's global peers? I actually believe that the future of any city and region is determined by macro factors of geography and environment and that human intervention, culture, and politics ultimately are virtually irrelevent over time (time means longer than a human life-span). That said, your individual experience, the opportunities available to you, and your future success potential right here right now in the real world are almost entirely in your head.

 

[Parkdalian]

Due to the twin forces of globalization and technology, we continue to good paying jobs that are not being replaced. The core base of our region's communities are being hollowed out and it's becoming increasingly cost prohibitive to perform any real productive work in the area.

Most of what you've written is just rhetoric - "hollowed out" is meaningless. If you are referring to manufacturing jobs: I would argue that we have too many manufacturing jobs. We sustain a collection of jobs (I'm looking at you, auto assembly!) that are pretty soul-destroying because we are emotionally attached to "building things". And in the case of the NDP, because they support our political bases. We should be investing in high-end design and companies that rely on minimal manufacturing - that is the future. For example, it will eventually be cheaper to use automation to make custom clothing than getting a poor sap in Turkey to sew it for us and then ship it (possibly when oil prices rise?). I should also point out that with the HST change, and the coming lower corporate taxes, Ontario is one of the most cost-effective places to do business in the Western world, as long as your company doesn't require starving people to mindlessly assemble things for you.

You've fallen into one of the traps of forecasting: applying old dynamics to the current situation and expecting it to behave the same. Technology has been the great game-changer for the last 250 years, and as long as we invest in education and technology, we'll have a place in the future economy. The countries that focus instead on retaining bits of the past they fetishize as being signs of advancement are the ones who are going to be left behind.

 

[loggedout]

Most of what you've written is just rhetoric - "hollowed out" is meaningless. If you are referring to manufacturing jobs: I would argue that we have too many manufacturing jobs. We sustain a collection of jobs (I'm looking at you, auto assembly!) that are pretty soul-destroying because we are emotionally attached to "building things". And in the case of the NDP, because they support our political bases. We should be investing in high-end design and companies that rely on minimal manufacturing - that is the future. For example, it will eventually be cheaper to use automation to make custom clothing than getting a poor sap in Turkey to sew it for us and then ship it (possibly when oil prices rise?). I should also point out that with the HST change, and the coming lower corporate taxes, Ontario is one of the most cost-effective places to do business in the Western world, as long as your company doesn't require starving people to mindlessly assemble things for you.

You've fallen into one of the traps of forecasting: applying old dynamics to the current situation and expecting it to behave the same. Technology has been the great game-changer for the last 250 years, and as long as we invest in education and technology, we'll have a place in the future economy. The countries that focus instead on retaining bits of the past they fetishize as being signs of advancement are the ones who are going to be left behind.

High-end design of what? And exactly how many people are a) capable of this kind of work and b) will be required for this work. Look there too many questions and not enough answers. The fact is, very few people are needed and even fewer are people capable of the high end design work you are wishing for, you are going to have to find things for all of these other people to do, that's key for social stability. Never mind the fact that there are incentives at every level in nearly every industry to move your business to the lowest cost providers and there's no reason why any of this work must be done in Canada or any where else in the Western world where generally costs are higher. I'm an engineer and see it happening everyday.

I am not saying we should focus on dying bits of the past, but that we are the dying bits and this area's demise is pretty much inevitable given the trends in the world. The living standard in western countries for the masses will likely decrease as we reach an equilibrium with the rest of the world as their living standards increase. There is nothing intrinsically special about this area nor its people that will prevent this.

 

[GenerationW]

If you are referring to manufacturing jobs: I would argue that we have too many manufacturing jobs. We sustain a collection of jobs (I'm looking at you, auto assembly!) that are pretty soul-destroying because we are emotionally attached to "building things".

I agree, we need even more soul-destroying office cubicle jobs!!

 

[TrickyRicky]

Parkdalian, I understand the concept but I would have to agree with loggedout in the sense that a large urban centre can't rely expressly on creative or service industries. You need a base of "old fashion" activites. I mean why do settlements pop up anyway? Really for all our fancy sophistications a settlement is mainly a distribution centre. The cross-roads where farmers start buying tools and selling grain. The economic future of a city is really a question of what is my hinterland? The struggle for urban dominance is the struggle for hinterland, and hinterland now means the entire earth. Hinterland is the catchment area for all those farmers buying tools and selling grain. The temptation to specialize is the argument to focus on expanding your hinterland. However, what if you seed control of some of your hinterland in one area in order to focus on expanding your hinterland in another area? Say grow your computer game hinterland at the expense of your construction material hinterland? This is the dynamic being played out all over the globe. The strategic answer, and the reason that I think the contemporary "creative industry" model is dangerous is that you don't want to surrender manufacturing to grow creative industries, you want to grow creative industries and manufacturing. Maybe you can't have your cake and eat it too but to tactically surrender ground in any area is a loosing strategy. Specialisation is unfortunately a precarious and unstable position. This is as true for the manufacturing economy of Southern Ontario as it is for the energy industry of Calgary or the financial services economy of London or the manufacturing economy of the Pearl River Delta.

Loggedout, I think you underestimate the strategic position of the GTA and Canada in the world, and underestimate how many macro factors play into our hands in the future. These may not help you personally, say if you are a computer engineer and there are not enough computer engineering jobs in Toronto but many in Shanghai or Romania. But then again your aspirations and limitations are only as tied to being a computer engineer as you let them be. Toronto is no barrier to your success but in your mind.

 

[taal]

If you're indeed a software / computer engineer (developer) whatever people call it now a days ... like I am ... you'd release there are tons of these jobs in the GTA - just about everywhere - they key is it's quite a dynamic industry with the requirements and what's in demand changing everyday - yes some jobs are shifted oversees - most large development companies nowadays have large continents of workers in India / China / ... but that doesn't mean there's a lack of jobs here (in fact I'm sure there's more software development positions then there was 5/10 years ago, maybe not the same exact jobs though), they do change and you need to adapt as well. Also there are certain specializations in this industry that have seen almost no outsourcing whatsoever - but they're generally highly skilled and there's limited talent in the area.

 

[loggedout]

Loggedout, I think you underestimate the strategic position of the GTA and Canada in the world, and underestimate how many macro factors play into our hands in the future. These may not help you personally, say if you are a computer engineer and there are not enough computer engineering jobs in Toronto but many in Shanghai or Romania. But then again your aspirations and limitations are only as tied to being a computer engineer as you let them be. Toronto is no barrier to your success but in your mind.

I'm not worried about my career's future, I'll figure it out but I am worried that the future is bleak in the GTA overall so I cannot make any long term commitments to the area like buying a house, settling down, having children, etc. I do not want to leave this area to be moving around all over the world like some nomad but it may come to that, simply because the pastures will be greener elsewhere. My real concern is when the every day person cannot find work that pays enough to live a decent life that this place will really start to fall apart. Who cares if I have a job then, when everything else around me has turned to shit. Again, I ask what are you going to do with all of these people? Forget about me. The entire GTA will start looking like what Hamilton, Welland, etc. already look like.

Btw, why do people assume an engineer is a computer/software engineer? I'm an EE and I used to work in industrial automation/robotics and now I work in the nuclear industry providing safety risk assessments. I will probably have to move to china or india or some place like that considering that is where all of the plants are being built to take advantage of my career experience so far. Fine.

I am convinced that the GTA cannot rely on services alone for its economy to be successful particularly in this era of the inevitable shift of power and wealth from the west to the east.

Toronto, you are not so special that you will be immune from the changes sweeping the world is all that I really have to say.

 

[TO City of Light]

My friend. you have it so right. Very few Asian blogs are looking at these issues, they are just doing. So good luck Canada. We will rule. Because that's what it is about. We rule the world or we go home.

 

[TO City of Light]

Actually I sit in NYC with an internet connection that would be by Asian standards be a non-starter, but here in the capital of the world I have connectivity. Go figure. We in the west rule.

 

[Tewder]

Attitude determines your altitude. Where did that damn fortune cookie go!!

 

[brockm]

Unfortunately, loggedout is right. An economy can not merely sustain itself as a service-based, consumption-oriented economy. The United States is in the process of learning this. The relationship between the aggregate indebtedness of a nation and its lack of manufacturing is pretty clear.

The Asian nations that manufacture are all creditor nations. They lend money to all the Western service-oriented economies so we can turn around and buy goods from them. But what "high value" services do we export to them in exchange for this? Nada.

Asian nations have accumulated over $7trillion in USD reserves. What are Asians going to buy with all those dollars? Paralegal services in Boston?

The fact we all need to keep running up mortgage debt, line of credit debt, and our governments have to keep selling treasuries to these Asian tigers so we can print up cheap money while avoiding hyperinflation so we can dole out cheap mortgages to our citizenry shows how imbalanced the global economy is. I can tell you the domestic bond-holdership is a pittance of what the government needs to maintain monetary stability.

The Asians pretty much need what natural resources we can scrape off our land. But they have no interest in the exports of our "services economy". And when they're sitting on $20 trillion of foreign currency reserves with nothing to spend it on, maybe they'll stop and wonder why they're purchasing our currencies, and sending us their goods with nothing in return other than a promise by our central banks to give them a bunch of paper currency that would immediately collapse if they actually tried to claim it.

Yeah, you better hope manufacturing returns to the GTA if you want to continue to have a strong services sector in Toronto.

 

[Tewder]

The Asians pretty much need what natural resources we can scrape off our land. But they have no interest in the exports of our "services economy"

Just send Justin Bieber there and it wont be long before fever strikes.

 

[Second_in_pie]

Loggedout, I agree pretty much 100% with what you're saying. But, it's important to note that this isn't a problem that Toronto has, but basically the entire world does. I myself have learned to be able to switch between happy go lucky "everything is alright" and the real deal that we're all going exactly the opposite of the right direction. But if you're winning the game you're winning the game, even if the game is flawed in principle. And Toronto's quite arguably one of "the best" cities in the world by today's standards. Sure, it's all going in the wrong direction, but so is everyone else. You might as well go in the wrong direction in style.

And it's not as if Toronto's selling itself on the stuff that'll lead to it's downfall. We're selling ourselves as a very nice, vibrant and accepting city/region to be in and that's why it's a great place. It's not like we're Detroit, banking our success on bad future planning.

 

[TrickyRicky]

This is after all a thread about the ascendancy of Toronto. We know that Toronto will never be the most powerful city region in the world. It will never even be close. The hype these days is about emerging regions and rightfully so. Infact, our media outlets really downplay the unfathomable tranformations occuring throughout the globe. But if you look past the hype and get down to the underlying strategic factors you start to see how Toronto and Canada in general are sitting pretty. Infact we have it so good that we can afford to be complete public and city building morons and still maintain some of the highest standards of living in the world. Here are some macro factors (these are generalizations so there is no need to nit-pick the details):

-Population pressures around the globe help us
-Climate change works in our favour
-We have no geopolitical problems to worry about
-We have no border issues
-We are a safe and stable investment opportunity
-We have excess resources of food, power, raw materials, land, and water
-We choose who comes to this country
-We already have a huge legacy of wealth and investment capital
-We have a strong and strengthening global network of human connections and ties to all corners of the earth

These are just some of the macro factors that come to mind. Take a look at the list and think of your favourite new skyscraper or subways system somewhere in the world and the city it is in. The truth is that most cities better damn well have the best new buildings and best new subway system because they can't afford not to, they are too vulnerable to some or all of the negative implications of these and other macro factors.