Creative industries represented close to 6 percent of the total Toronto CMA labour force in 2001. Among them, the largest employers were architecture and related services, publishing and advertising. Regional creative industries combined boast more than 8,600 firms.32 The Toronto region is not only a major centre of creative economic activity nationally, but also performs strongly in North America.33

Growth in Creative Industries: Toronto’s creative industries have enjoyed notable growth over the past decade, despite economic fluctuations in the wake of 9/11 in 2001 and SARS in 2003. From 1991 to 2004, total employment in creative industries has grown annually at 3.1 percent, compared to 2.3 percent for the total Toronto CMA labour force.34

Figure 2 compares creative industries with other industries in the Toronto region.35 During the 1991-2004 period, creative industries grew faster than financial services (which grew at 1.8 percent), and were catching up to leading sectors like information and communication technology (3.9 percent) and business services (3.8 percent). Toronto’s creative industries also exhibit a high level of specialization, similar to other dominant industries.

Figure 3 shows that during this same period, the top three fastest growing creative industries were:
— Performing Arts Companies (7.1 percent)
— Motion Picture and Video industries and the Sound Recording industry (5.4 percent)36
— Broadcasting (4.6 percent)

Figure 3 further illustrates that Toronto’s creative sectors have a location quotient above 1, displaying a high level of employment concentration in the region compared to the rest of the nation.

Figure 4 demonstrates that, when ranked against other selected North American cities by compound annual growth rate between 1990 and 2000, creative employment in Toronto (at just slightly over 4 percent) has grown faster than that of cities like Montreal (2.4 percent), San Francisco (1.8 percent), Los Angeles (0.8 percent), and Chicago (0.5 percent). The average annual growth in creative occupations was only 0.4 percent in New York City.37

Market Share: The Toronto CMA accounts for nearly one-quarter of national employment in creative industries (close to 550,000 people were employed in creative industries across Canada at the last Census in 2001). A report by Deloitte and Touche prepared for the City of Toronto estimates that in 2001, Toronto generated approximately $8.5 billion in cultural GDP.39

The Toronto region is at centre stage of Canada’s creative economy with several dominant sectors. Toronto publishers brought in almost seven of every ten dollars of national book publishing revenues during 2000-2001, while film producers earned almost 60 percent of all national film revenues. Toronto’s share of national sound recording revenue is even higher at 86 percent.40

Toronto’s Leading Creative Sectors: Examples of leading clusters both nationally and internationally include:41

Film and Television: Toronto’s film and television cluster ranks third in North America, with just under $900 million worth of film and television productions shot in 2005, and the industry contributes $1.1 billion annually to the local economy.42 Despite the fact that feature film production spending grew by 21 percent from 2004 to 2005, competition from other locations in Canada and abroad is strong and becoming more intense all the time. As evidence of this competition, total spending on ‘major productions’ (including feature films, TV specials, TV, miniseries and movies of the week) decreased by 4 percent and spending on commercials and music videos decreased by 9 percent in the same 2004 to 2005 period.43

The City of Toronto’s Film and Television office provides logistical and regulatory support to the industry. Also, the city recently appointed a Film Commissioner, responsible for strategy and policy promoting Toronto as a film destination and developing relationships between the city, the industry and other relevant parties. other recent developments include FILMPORT, Canada’s largest film and media production complex o the city’s waterfront.

Also supporting the industry is the Ontario Film and Television Tax Credit, co-administered by the Ontario Media Development Corporation and the Ontario Ministry of Finance. This refundable tax credit is available to Ontario-based production companies for 30% of qualified Ontario labour expenditures on eligible film and television productions.

Much of the technical expertise available within the sector’s 25,000-strong workforce results from the presence of internationally-renowned education and training institutions such as Sheridan College’s animation and visual effects programs, as well as the Canadian Film Centre and its widely-recognized Habitat New Media Lab. The industry’s future competitiveness will rely increasingly on the ability of these and other local education and training institutions to generate home-grown talent.

Design: Toronto’s economy is home to some 25,000 designers – architects, landscape architects, interior, industrial, graphic and fashion designers. It is the largest design workforce in Canada and the third-largest in North America after New York and Boston. Toronto’s design sector grew at a compound annual rate of 4.7 percent from 1991 to 2001.44 The industry benefits from advanced educational institutions in Toronto such as OCAD, the George Brown College School of Design, the Faculty of Architecture, Landscape and Design at the University of Toronto, and the York/Sheridan design programs, as well as organizations like the Design Exchange.

Music and Sound Recording: A comprehensive report on culture clusters in Canadian CMAs noted that the 96 establishments in Toronto’s sound recording industry in 2001 accounted for one-third of all firms in Canada, employing 75 percent of Canada’s sound recording workforce and earned more than $1 billion in annual operating revenues.45 By 2004, the number of sound recording firms in the Toronto region had grown to 168.46 From the BBC to the New York Times and Spin magazine, the region’s booming independent music scene is generating excitement and recognition with pioneering bands like Broken Social Scene and innovative, independent record labels.47 Toronto’s Urban Music genre is also making headlines with much success attributed to the showcasing support programs of the Urban Music Association of Canada (UMAC). Both UMAC and the Foundation to Assist Canadian Talent on Records (FACTOR) are headquartered in Toronto, and the City has also been selected as the site for the new Canadian Music Hall of Fame.

Performing Arts: Toronto is home to more than 11,000 performing artists48 and close to 200 performing arts companies.49 Performing arts was the fastest growing creative sector in the region during the 1991 to 2004 period (7 percent average annual employment growth rate). Behind the strength of this sector are organizations such as the Toronto Alliance for the Performing Arts and The Creative Trust. The Creative Trust’s ‘Working Capital for the Arts’ program supports Toronto’s mid-sized performing arts companies by assisting with developing their planning and financial skills and acquiring and maintaining a fund of working capital.

Strengths and Challenges
Creative enterprise is undoubtedly thriving in Toronto. However, as older industries contract or move offshore, the urgency to support and promote creative industries as a regional priority is increasingly evident. To commercialize creative talent and to entice entrepreneurs and businesses to locate or remain in the region, a number of challenges must be addressed.

Creative industries do not follow traditional business models. Although programs such as Enterprise Toronto exist to promote the growth and development of new business ventures, Toronto lacks a coordinated system that provides specialized support to creative enterprise to enable them to move beyond the initial start-up phase. The Toronto Fashion Incubator (TFI) is one example of how to provide the affordable workspace and business development support programs required to help emerging designers evolve into successful fashion entrepreneurs. Other specialized support is needed to enhance and grow Toronto’s creative sectors.

Toronto’s creative businesses face a shortage of risk capital. Although programs like Toronto’s Creative Trust ‘Working Capital for the Arts’ address a specific gap in the performing arts industry, more of these programs are required to ensure that successful creative businesses have access to the capital they need to survive and grow.

Entrepreneurs and firms are often drawn to more sophisticated markets or locations offering incentives.50 Despite Toronto’s creative strengths, in today’s world of easy travel and communication, other large creative centres, such as New York, Los Angeles, London and Berlin, are accessible and enticing. Toronto cannot afford to lose its ‘breakthrough’ firms and talent to these city-regions, many of which are now looking strategically at how to keep or regain their creative edge. Rather than be lured to other cities, creative practitioners should find every reason to stay here and achieve global competitiveness from a Toronto base. There is no simple or single way to keep these enterprises and entrepreneurs here. The answers lie in a combination of enticements and a multi-pronged approach to making Toronto the location of choice for entrepreneurial talent and enterprises.

Both successful and recently developing creative sectors need to be recognized, celebrated and supported strategically. The film industry in Toronto is undoubtedly a success story. The city now faces the challenge of maintaining the industry’s strength and worldwide reputation in the face of strong competition from Canadian cities such as Winnipeg and Vancouver, as well as American cities that are attempting to recapture film business previously lost to Canada.51 Meanwhile, design has become one of Toronto’s core creative industries. However, this industry has only recently been recognized as a sector with strategic growth potential for the region. Continuous recognition and support allowed our film industry to achieve its global stature and competitive status. Considering Toronto’s ranking as the third-largest design workforce in North America,52 the design industry is well-placed to benefit from similar treatment at home and win recognition worldwide.

The challenge for all industries is to think creatively and re-invent themselves constantly. Today’s enterprises need more innovative forms of management, marketing, problem-solving, and greater use of design inputs. One way to advance creativity and innovation is by promoting collaboration and convergence among different industries. New models that promote convergence have recently emerged in Toronto: in sponsored environments like the MaRS Centre (see Opportunity 7) and in private developments such as 401 Richmond (see page 23). These convergence centres enable the co-location of various organizations and individuals working in different but related sectors, breaking down silos thereby fostering ‘collisions’ that inspire new processes, ideas, products and companies. Such environments foster collaboration among different sectors and encourage firms to think creatively.

Nascent creative talent and enterprise plays an important role in job creation, wealth generation and other social and economic spin-offs. By addressing the challenge facing the creative sector, Toronto can reap the full benefit of its creative entrepreneurs and enterprises.

Opportunities: Creativity Means Business

4. Provide Specialized Entrepreneurship Support/Business Skill Development for Creative Industries
To address the unique needs and realize the full potential of our creative enterprise, Toronto must:
— Expand existing small business and entrepreneurship programs to provide specialized support for creative industries
— Expand sector support initiatives to serve creative industries more effectively
— Create vehicles for sales development, business-to-business forums for investment and business matching to support the creative industries sector
— Provide incubation space and services for creative businesses building on the example of the Toronto Fashion Incubator

Programs such as the New Orleans Music Office Co-op, NY Designs (Queens, NY) or Creative London’s Business Accelerator Program53 provide different models of specialized support. They include the provision of space to conduct business, access to shared prototyping equipment, workshops and courses on business planning and marketing, and access to potential investors.

5. Increase Available Cultural/Creative ‘Risk’ Capital
Traditional investors often struggle to make sense of the risks inherent in the start-up, expansion and maintenance of creative-sector businesses.

Toronto’s shortage of creative risk capital must be addressed. Mechanisms used in other cities should be explored and adapted in ways appropriate to Toronto’s financial and regulatory climate.

Creative London is addressing the risk capital gap through the Creative Capital Fund (CCF), a £5 million equity fund that provides seed capital investment and business support to help early-stage creative entrepreneurs and businesses achieve their potential. Established in March 2005, the CCF will make equity investments of up to £75,000 in promising companies with further investment possible once commercial milestones are met. Every £1 invested by CCF must be matched by at least £1 in equity from private investors.54

6. Advance Toronto as a Centre of Design
The design sector is an obvious strength of the regional economy with the potential both to contribute to the region’s productivity and to become as internationally recognized as Toronto’s film sector. A recent study of Toronto’s design industry55 concludes that Toronto needs:
— Strategic promotion of local design, locally and internationally
— Promotion of the value of design to key industries
— Promotion of design-related professions in schools
— Inclusion of design in public sector innovation and commercialization strategies, where the current focus rests heavily on R&D and technology
— Provision of tax credits or other incentives for incorporating design services
— Strategic placement of designer-consultants in business incubators, convergence centres, and science and business parks

Lessons can be drawn from cities like Montreal, whose reputation as a centre of design is no accident. As early as 1986, a federal Ministerial Committee identified the promotion of design as a path to Montreal’s recovery from deindustrialization. This led to the creation of policies and institutions such as the Institute of Design Montreal, the position of Design Commissioner and tax credits for firms that hire designers.

7. Develop a Creativity/Innovation Convergence Centre
Toronto is already home to successful convergence centres in science and creative enterprise. It now needs to replicate and scale up these noteworthy successes so that other creative sectors, enterprises and neighbourhoods can benefit. Toronto should develop a new convergence centre for the creative sector.

This centre would bring different creative enterprises, at various stages, from various sectors, together under one roof to spark innovation, cooperation, and new economic activity. This centre would also provide a home for firms from other sectors (e.g. venture capital and/or information and communication technology) to inspire cross-sector collaboration, business creation, product development and idea-sharing.

The most noteworthy example of a science-based convergence and innovation facility is the MaRS Centre. The government of Ontario was a significant contributor to the redevelopment of an old hospital building into a centre that fosters collaboration between the communities of science, business and capital through physical co-location, structured networks and the MaRS web portal. MaRS creates an environment that enables a number of emerging companies to access risk capital, management resources, strategic business tools and global markets. MaRS’ outreach also extends to bridge the gap between the arts and science by hosting music and film festivals, art exhibits and book readings, in addition to collaborating with the Design Exchange and OCAD on unique design and visualization initiatives.56

One promising idea is to locate a new Creativity Convergence Centre close to MaRS in Toronto’s Discovery District. MaRS’ unique urban setting links it to research and educational facilities, the financial district and the cultural city core, in addition to direct access to Toronto’s public transportation system. A new centre could leverage these advantages of established infrastructure, as well as the District’s international recognition and increasing attention from angel investors and venture capitalists.
An alternative – or even complementary – model would be to situate such a Creativity Centre on Toronto’s waterfront. In this setting, it could attract new creative activities to this precinct of the city, while also inducing investment and employment growth in a range of sectors throughout Toronto’s creative economy. (For further discussion of Toronto’s waterfront, see the following section on Space).