Chicago Ranked As 'Emerging' City For Startups

By Rachel Cromidas in News on May 19, 2015 8:30PM

Chicago is emerging as a top U.S. city for innovation and startups, according to a report released last week by the U.S. Chamber of Commerce and 1776, a Washington, D.C. tech hub.

The report surveyed the "state of civic entrepreneurship" in areas such as education, energy, health and urbanization in eight U.S. cities: Austin, Boston, Chicago, Detroit, New Orleans, New York, San Francisco and D.C.

Overall, San Francisco led the pack as the "leading" city for innovation, and Boston and New York City were ranked as "established" for their solid startup communities. Chicago, Austin and D.C. were described as "emerging," and Detroit and New Orleans were described as "nascent."

One major factor in promoting a good startup scene, the report says, is having a robust network. Just under half of Chicago entrepreneurs surveyed said they believed Chicago did have a strong network, putting it on par with Austin and D.C. as an "emerging" innovation city.

Chicago fared better in other categories surveyed, even scoring as the "leading" city for Institutional and Corporate Support and for Community Support Structures—both categories that encompass how various civic institutions such as universities and think-tanks, businesses, venture capitalists and community organizations support the city's startup scene.

But among the dozens of local entrepreneurs surveyed by the report's authors, most said they did not see the city as a place where support from those community and business leaders was strong.

Still, participants in the survey highlighted Chicago's potential to become more of a leader among startups and tech industry innovators. According to the report:

"Chicago’s role as the urban hub of the Midwest region and its connection to the 'Heartland' were considered to be significant competitive advantages for its entrepreneurial community. Participants felt that Chicago was still in the early stages of 'unlocking its hidden capital' to invest the community’s wealth in startup activity."

Howard Tullman, the head of Merchandise Mart's tech incubator 1871, was among the report's participants. He said that loyalty to local citizens sets Chicago apart as a place to start and grow a business.

“Loyalty is a Midwest virtue; people here don’t have one foot out the door," he said in the report. "It’s a longer-term view that you just don’t find on either coast. Here it’s about sticking with a business and building it.”