Toronto – taking a page from Atl. Canada?

For several years now, a number of folks including me have been pushing to position Atlantic Canada as a ‘nearshore’ alterative to U.S. companies offshoring IT and back office services to India. The cost structure here is much higher than India but there are a number of emerging reasons why companies would prefer nearshore to offshore including privacy legislation, proximity to markets, cultural similiarities, etc.

Indian IT firms have realized this and have started setting up nearshore facilities in North America.

Namely, in Toronto. Many of the biggest names in Indian IT – Cognizant, Wipro and now Polaris Software have all set up facilities in the GTA and all have claimed them to be ‘nearshore’ facilities to service the U.S. market.

To say that Toronto is ‘nearshore’ would be like calling Boston or Chicago ‘nearshore’. The truth is that the GTA has attracted these firms because of deliberate and sustained efforts by the Ontario government to attract investment from India.

What’s next? Will Toronto take on our lobster and EI brand? For me, to position Toronto as ‘nearshore’ has a similar logic.

However, if you are an Indian firm and you don’t even know much about Canada (let alone Atl. Canada), you are likely to equate Toronto with Canada. Which is the posture of many (most) international firms.

The trick here is to somehow get the jump on Toronto. Pick a sector with great potential and get in first. Push hard and let Toronto do catch up.

That’s difficult. Really difficult but it’s been done before.