Montreal as a Technological Hub: The Impact of Diversity and Immigration PDF

Montreal as a Technological Hub: The Impact of Diversity and Immigration on Innovation and Global Reach in a Cosmopolitan Core by Elie Wehbe October 10, 2024 Strategic Technology⠀/⠀Technology 12 min read A jazz festival takes places in Montreal, next tot eh Place des Arts performance centre. (Ph...

Montreal as a Technological Hub: The Impact of Diversity and Immigration on Innovation and Global Reach in a Cosmopolitan Core by Elie Wehbe October 10, 2024 Strategic Technology⠀/⠀Technology 12 min read A jazz festival takes places in Montreal, next tot eh Place des Arts performance centre. (Photo by: Avalon/Universal Images Group via Getty Images) Cosmopolitan Cores This analysis is part of a series that investigates global “Cosmopolitan Cores.” An increasing number of cities and their surrounding regions that attract people from diverse backgrounds and national origins are forming “cosmopolitan cores” that function as vibrant hubs of social, cultural, and economic dynamism that exemplify the evolutionary interconnectedness of global human society. Although there have been cosmopolitan cores before, the modern era is being dramatically shaped by cores throughout the world whose ways of being are more quickly and easily disseminated globally by contemporary methods of travel and communications. These powerful and consistently evolving cosmopolitan cores are creating multinational subcultures, and global cultural production, and are reshaping how human beings perceive the world around them. Innovation Management and Interconnected Economies of a North American Cosmopolitan Core Long celebrated for its cultural diversity and economic dynamism, Montreal – one of Canada’s largest cities with a population of over 2 million people – coined an economic development strategy in 2018 dubbed “Montreal 2030” aiming to position it as a facilitator and catalyst of economic and commercial development. Now, five years after the strategy was launched and implemented ̶ and despite the challenges posed by the Covid-19 pandemic ̶ the city solidified its status as a significant technology hub, particularly within Quebec. This progress was made possible thanks to two main drivers. The first is the city’s increasing ability to attract international multicultural and bilingual talents, largely due to Canada’s progressive immigration system, which prioritizes skilled labor, family reunification, and refugee protection. This system has not only brought in diverse talent but has also facilitated the newcomers’ integration into Montreal’s vibrant economic and social fabric. In 2023, the population of Montreal increased by 5.3%, compared with an average 3.5% rise in other cities in the Quebec province, following the post-pandemic resumption of the national immigration plan. According to the Institut de la statistique du Quebec (ISQ), which is the governmental statistics agency for the French-Canadian province, the city added 100,000 people to its population, growing faster than any other major city in the Quebec province, both in terms of number and percentage of total population. Despite this increase, the city was able to stabilize its unemployment rate at 5.8%, in line with the country’s average unemployment rate. The second driver is the achievements of the city’s municipality in enhancing economic dynamism and improving infrastructure, which ultimately laid the groundwork for Montreal’s rise as a prominent technological hub. According to Montreal’s 2023 annual report, the city’s municipal revenue exceeded its expenditures by $187.6 million, down from $343.8 million in 2022. Although the surplus was a modest fraction of its $6.9 billion-dollar budget, the city’s financial performance remains acceptable given the recent downturn in the real estate market, increased inflation pressure, and overall economic slowdown. But in terms of economic development, Montreal remains on the right track with over 4,000 small- to medium-sized companies accompanied by the city’s support program, the financing of an international hub for new technologies, and the contribution to four incubators and accelerator programs. Aside from the demographic and economic aspect, Montreal differentiates itself as a Canadian city through the importance it allocates to diversity. The latter is not limited to making it a simple cultural melting pot, because cultural diversity emerges as the engine of a dynamic and innovative economy. This diversity has been bolstered over the years by a range of proactive policies, such as the Quebec Skilled Worker Program, which attracts skilled international talent, while continuously implementing initiatives that streamline the recognition of foreign credentials in order to optimize and accelerate their contribution to the Economy. Also, bilingualism is strongly supported notably through education and language training programs funded by the Government, facilitating the integration of immigrants into academic institutions and the local workforce while maintaining the city’s French linguistic heritage and identity. Additionally, Montreal’s economic development initiatives, including support for startups and SMEs, contribute to a thriving innovation ecosystem, particularly in technology and creative industries, where the diverse population’s varied perspectives drive creativity. Inclusive urban planning, characterized by affordable housing initiatives and a robust Diversity and Inclusion Strategy in employment and at the social level, ensures equitable access to services and promotes social cohesion. Demographics of Montreal’s Workforce Montreal’s workforce is a vibrant mosaic of diverse cultures and backgrounds, reflecting the city’s cosmopolitan nature. According to ISQ, immigrants made up 30.7% of Montreal’s workforce in 2021, compared with 17% for Quebec in 2023, bringing along a wide range of skills, experiences, and perspectives. Thus, Montreal boasts one of the most diverse workforces in the region. This diversity is not just a byproduct of immigration; it is a driving force behind the city’s innovation. According to a report by Stat Canda in 2022, the information technology sector plays a particularly important role in Canada’s labor market. Indeed, six out of the10 North American tech hubs are in Canada, including the CMAs of Toronto (6.8%), Kitchener-Cambridge-Waterloo (6.3%), Ottawa-Gatineau (6.0%), Montreal (5.4%), Vancouver (5.3%), and Fredericton (5.2%). Montreal’s success as a technological hub is closely tied to its progressive immigration policies, which have made the city an attractive destination for skilled workers worldwide. The Canadian government, along with provincial initiatives, has implemented programs that facilitate the entry of highly qualified professionals into the country. A particular example would be the recent uptick of immigration from countries like Lebanon, which has been grappling with multiple crises since 2019, pushing thousands of highly talented and trilingual professionals to move to countries like Canada that offer job opportunities through the country’s immigration program. In January 2024, the Quebec government submitted its 2024-2025 Immigration Plan, maintaining 50,000 admissions annually, including graduates from the Québec Experience Program (PEQ), which allows foreign students who graduated from Quebec to settle in the province permanently, while excluding temporary foreign workers. Such renewed policies have had a profound impact on the growth of the tech industry on the province’s large cities like Montreal, enabling companies to access a broader talent pool and enhancing their ability to innovate. The increasingly diverse population of the Greater Montreal area plays a pivotal role in shaping the interaction between Montreal and the wider, predominantly Francophone Quebec population. While Montreal’s multicultural and multilingual demographic is a cornerstone of its identity as a cosmopolitan core, this diversity often stands in contrast to the more homogeneous and provincial outlook of other regions in Quebec. Although the city’s diversity policies foster an environment where diverse populations can thrive, they also present challenges, particularly in balancing Montreal’s globalized identity with Quebec’s strong emphasis on preserving its distinct Francophone culture. Montreal’s vibrant diversity is generally perceived as a strength that drives economic dynamism and cultural richness, but it has also created tensions for years between the city itself and the rest of Quebec, particularly in areas where cultural and linguistic differences are more pronounced. In January 2024, the Quebec government proposed extensive amendments to the Regulation (Bill 96) respecting the language of commerce and business. This proposal was met with criticism, especially in social media, and created controversy among the province’s English-speaking community, predominantly in Montreal. These amendments were later revised and toned down. In this context, Quebec’s perception of its role in a global system is complex and somewhat divided. On one hand, sectors like business and education in Montreal embrace a global outlook, recognizing the benefits of international collaboration and innovation. On the other hand, there remains a significant provincial sentiment within Quebec that prioritizes the preservation of its unique cultural and linguistic heritage, sometimes at the expense of fully embracing a globalized identity. This duality reflects a broader tension within Quebec between maintaining a distinct provincial identity and recognizing its evolving role as part of a globalized world, with Montreal serving as both a bridge and a battleground for these competing visions. Deindustrialization and diversification Montreal’s economic evolution is the result of centuries of development and diversification, the latter having gradually paved the way for the transformation of the city into a place of choice for international businesses’ presence in the region. Historically, the city established itself as an important commercial center as early as the 19th century, thanks in part to its strategic geographic location on the St. Lawrence River, which made it a key gateway for domestic and international trade. In the early 20th century, Montreal became a major industrial center, with industries such as textiles, steel, and shipbuilding thriving. However, the decline of some of these traditional industries in the 1970s, became a noticeable phenomenon which was branded a “deindustrialization” by Pierre Lamonde and Mario Polèse in their 2009 article “The evolution of Montreal’s economic structure 1971-1981: deindustrialization or reconversion?”. This forced the city to reinvent itself by diversifying its economy, focusing on education, innovation, and research, which has led to the emergence of new sectors such as aerospace, biotechnology, and more recently, information and communication technologies (ICT), video games and artificial intelligence (AI). Montreal’s economic indicators reflect this successful transformation, despite the current factors that are weighing down on the city’s growth rate, according to the Montreal Gazette. The GDP growth rate, which was hovering between 2% and 3% in recent years, has dropped to 0.4% due to a decline in immigration and the lack of affordable housing, according to the Conference Board of Canada’s annual economic note on the city for 2023. However, this drop did not impact the resilience and strength of Montreal’s economy, which has seen a significant increase in foreign direct investment, particularly in the technology sector. AI, Aerospace and Biotechnology Indeed, Montreal has recently been described as a center of excellence in AI by local and foreign media, thanks to the efforts of international and local talents, notably Université de Montréal (UdM) professor Yoshua Bengio – a Quebec native with Moroccan origins, and one of the founding fathers of the deep learning movement and head of the Montreal Institute for Learning Algorithms (MILA). Udm’s research on deep learning algorithms and other AI technologies has been integrated into products and services used by millions of people around the world today. Montreal’s global impact in this field is reinforced by international collaborations with leading technology companies and initiatives and the establishment of research and development centers by global companies such as Google, Microsoft, and last but not least Facebook, which set up in 2017 a research lab for AI called MontrealFundamental AI Research (FAIR) Lab (formerly known as Facebook AI Research). This lab committed $7 million (USD) in funding for five years to support the Canadian AI ecosystem and establish partnerships with world-leading Canadian institutions. Aside from AI, the video game sector is another thriving industry in Montreal. The city was recently listed as one of the world’s top five video game production, due to the presence of major international studios such as Ubisoft, Electronic Arts, and Warner Bros. Games, as well as independent developers such as Behaviour Interactive, and Square Enix. Video game development in Montreal is supported by a creative ecosystem and a skilled and diverse workforce. This prompted video game giant Ubisoft to announce in 2023 that Montreal became the new North American Hub for the company’s Production Operations. It comes as no surprise that the Montreal-based company was able to produce blockbuster franchises such as Rainbow Six, Far Cry and the Assassin’s Creed series. The aerospace sector is also an important pillar of Montreal’s economy, with an estimated $2.8 billion in investments over the past few years for Quebec and Greater Montreal, according to the Ministry of International Relations’ 2019 report. In 2022, Quebec rolled out the Quebec Aerospace Strategy-Horizon 2026, aimed at solidifying the Canadian province’s position as a leader in aerospace manufacturing while ensuring growth on the long term. The city of Montreal will play an important part in implementing that strategy. In fact, Montreal is one of the few places in the world where all stages of the aeronautical production chain can be found, from design to manufacturing. Industry giants such as Bombardier, Pratt & Whitney Canada, and CAE’s training facilities – as well as McGill university and Concordia university’s dedicated faculties and research centers- are based in the city, helping to make it a global center of excellence in aerospace. The sector houses over 200 companies and employs over 35,000 people, with 1 in 60 people working in the aerospace sector in Greater Montreal, according to the Ministry of Economy and Innovation’s 2021 report. With 75% of all Quebec aerospace production exported out of Canada, it is no surprise that Montreal-made innovations and products in aerospace, such as the flagship Bombardier aircraft or Pratt & Whitney engines, actively contribute to global connectivity and the international economy. Life sciences and biotechnology also play a significant part in Montreal’s diverse economy, with the city emerging as a significant hub for advanced health research and innovation in science. Montreal’s dynamic life sciences ecosystem has attracted major investments, such as Moderna’s decision in 2022 to establish its first mRNA vaccine manufacturing facility outside the United States in the city. This facility, expected to be operational by the end of 2024, will not only supply up to 100 million doses of respiratory vaccines annually but also create hundreds of jobs, further fueling the sector’s growth. Montreal’s appeal for life sciences investments is bolstered by its proximity to university hospitals, clinical research institutes, and a highly skilled talent pool. It is therefore one of the largest centers for these industries in Canada outside of Toronto. The city, which is home to eight university-level institutions –including McGill, UdeM and Concordia, as well as three engineering schools, boasted a workforce of 12,800 life science professionals in 2019, representing 27% of the life science workforce of Quebec province where approximately 40,000 students are enrolled in STEM and life sciences programs. In 2016, the medical sector employed the highest number of foreign-born professionals in Canada, according to a 2020 report by Statistics Canada. Montreal is also home to a broad range of life sciences and health technology companies, including more than 1,000 manufacturers of medical equipment, pharmaceutical developers, and biotech firms spread across key clusters like the West Island, Saint-Laurent borough, Vaudreuil-Soulanges, Longueuil, and Biotech City in Laval. Innovations developed in Montreal, such as vaccines and gene therapies – by the likes of biotechnology company enGene, are distributed globally, playing a critical role in improving public health and saving lives worldwide. Montreal’s rise as a technological hub is deeply intertwined with its identity as a cosmopolitan core, where diversity and innovation go hand in hand. The city’s economic landscape is robust, supported by key industries such as AI, video games, and aerospace, all of which have a significant global impact. The role of immigration has been crucial, bringing in the diverse talent necessary to drive innovation and growth in these sectors. Looking ahead, the potential for Montreal to further establish itself as a leader in technology and as a cosmopolitan core is immense. With continued support for immigration and a commitment to fostering diversity, Montreal is poised to remain at the forefront of technological advancement, contributing not only to the Canadian economy but also to the global innovation ecosystem. The city’s unique blend of cultural richness and technological expertise ensures that it will continue to be a dynamic and influential hub in the years to come. Elie Wehbe is a journalist, digital media expert, and communications specialist. He currently serves as the community manager for the French-language Lebanese newspaper L’Orient-Le Jour, where he manages and oversees social media coverage. Wehbe, who has 15 years of experience as a journalist, has worked with Agence France Presse and the newspaper Al Balad. He has also contributed to numerous publications, notably The Financial Times and The Telegraph. Since 2023, Wehbe has been based in Montreal, Quebec. He holds a bachelor’s degree in political studies from the American University of Beirut and a master’s in journalism from Paris II Pantheon Assas. He posts on X at @Elie_Wehbe. The views expressed in this article are those of the author and not an official policy or position of the New Lines Institute.