Cities aren’t just where innovation happens; they also inspire innovation and are shaped by it in return. 

We’ve seen this process play out around the world throughout the past two years, as urban living and the companies disrupting it — in sectors like ride-sharing, co-working and last-mile delivery — were forced to adapt to the realities of the COVID-19 pandemic. 

Sheltering at home, city dwellers ordered groceries online, took meetings on Zoom and availed themselves of contactless payments and pickups. As they did, companies opened automated warehouses and downtown delivery hubs, retooled parking lots and checkout areas, and overhauled their offices to better suit the needs of hybrid workforces.

Now, with downtown streets once again bustling and people returning to work and play, how will cities — and the tech industries they support — rise to the challenge of the post-pandemic future?

“Getting things to people quicker, allowing people to work more remotely and flexibly, blurring the lines between where people live and where people work — I think we're just at the infancy of this latest stage of investment in urban tech,” says Richard Florida, a university professor at the Rotman School of Management.

In cities, connection is key

Recent decades have blurred the lines between where people live and where they work, and the widespread shift to remote work (even if temporary) all but wiped these lines away. 

This shift revealed something that was true even before the pandemic, says Florida: “the traditional cubicle farm office was pretty much a broken institution.”

“I don't think cities have ever really been about the packing and stacking of office workers,” he says. “That was a very limited phase of their existence because we didn't have information technologies.”

As people demand better, more flexible and more humane ways of working, the central business districts organized around their offices will have to offer more living, dining and entertainment options. While certain processes and businesses will become more automated — adding services like cashier-less checkout, one-click ordering and contactless delivery — people want venues to socialize and interact with one another.

To entice people to stick around, downtown neighborhoods can build up their residential populations with more affordable and family-friendly housing. They can make it easy to get around with public transit, and ride-sharing and bike-sharing programs. And they can add green space, restaurants and nightlife to foster community on nights and weekends.

“What cities are really about is connectivity,” says Florida. This applies not only to technologies that allow us to connect, but to physical spaces as well.

Workers may move to the suburbs, but innovation remains centralized

Much has been made of the “rise of the rest,” the pandemic-fueled influx of tech workers (and tech money) to cities like Austin and Miami.

In terms of venture capital investment, though, the San Francisco Bay Area and New York City still took in the lion’s share of U.S. funding last year — a trend that Florida says shows no signs of abating in the near future.

According to an analysis he conducted with a team of Rotman researchers, New York is the U.S. city that’s made the biggest gains over the last decade, both in terms of absolute dollars and percentage share of investment. The Bay Area, meanwhile, alone accounted for more than a third of VC investment in 2021.

So while some tech workers may be leaving these cities in search of remote work options and more space to raise families, startups are still putting down roots in the biggest metropolitan areas. 

“There's a distinction between where people are moving and where people are innovating,” says Florida.

He also points out that many urban technologies become more important, not less, as people spread out beyond city centers. Coworking spaces are more valuable to workers who don’t live near their downtown offices, while grocery delivery is especially convenient when the store isn’t just down the street. 

“These technologies will permeate everywhere we live and work, and they'll be available to people who live in rural areas and suburban areas and in dense urban centers,” he says.

Toronto’s tech scene has an opportunity to take center stage 

While it may not have the scale or maturity of U.S. tech hubs, Toronto has the potential to compete on their level, says Florida. According to an analysis of the global venture capital and startup scene he conducted several years ago, Toronto ranks as an Advanced Global Startup Hub similar to Austin, Miami, Amsterdam, Dublin, Denver or Washington D.C. To get to the top ranks, though, it needs to invest in its innovation infrastructure.

Already, Toronto consistently ranks near the top among North American cities for attracting and nurturing tech talent, but its startup ecosystem needs more support to thrive, he says. The question is, how best to do that?

Florida thinks urban technology will be a key area to watch given the city’s capabilities in artificial intelligence, computing, electrical engineering and civil engineering, as well as its first-class finance and real estate industries. According to a study he conducted with Patrick Adler, a former of University of Toronto student and researcher now on the faculty of the University of Hong Kong, the city ranks among the world's top-25 leading urban tech hubs.

These strengths are essential to supporting innovation in areas such as smart infrastructure, real estate and property technology (proptech), autonomous vehicles and on-demand delivery services. With the right investments, Toronto could play a central role in reimagining the future of urban life, says Florida.

“It’s a city that believes in city-building — that wants to be a dense, great urban city,” he says.