When it comes to venture capital investment internationally, Chicago just barely misses the top 10, coming in at number 11 according to statistics compiled by the Martin Prosperity Institute, an economic think tank that operates out of the University of Toronto’s Rotman School of Management. (The report was published in January 2016 and used data from 2012, the most recent data available on global venture capital investment at that time.) As to be expected, San Francisco took the top spot, claiming 15.4 percent of the total share of global venture capital investment, followed by San Jose, Boston and New York. Chicago’s total percentage of global venture capital investment was a respectable 1.6 percent, putting it on par with Seattle, Toronto and Austin.

Chicago Tech Companies

A solid second-tier tech region, the Chicagoland area has more than 6,500 tech companies comprising almost 275,000 workers, if you count the combined head count of technology companies and IT departments of corporations. Moving Chicago up that list is top priority for much of the local tech community, according to Fred Hoch, executive chairman of the Illinois Technology Association and founder and general partner of TechNexus. He and other prominent members of Chicago’s technology community are working hard to connect the city’s resources – including entrepreneurs, incubators, capital sources, corporations and universities – to transform the Windy City into a top tech contender.

One way Hoch believes Chicago can move up the list of top start-up cities is by focusing on its greatest assets and differentiators. For example, whereas Silicon Valley is known for producing consumer-oriented offerings, Chicago is much more of a B2B city. Sectors such as healthcare, logistics, advertising, real estate and finance all represent major opportunities for enterprising start-ups. As Hoch said in his opening keynote at this year’s Incubate Illinois conference, there are 36 Fortune 500 companies in and around Illinois, and there are approximately 1,000 corporations that have $100 million to $1.5 billion in revenue. While not all these companies are technology related, they are all susceptible to technological disruption. For tech start-ups seeking initial customers, this represents a significant opportunity.

 

 

Connecting Technology Education with Start-Up Companies 

Another avenue to propelling Chicago forward is its access top university programs, including the business programs at Northwestern University and the prestigious University of Chicago Booth School of Business, which houses the Polsky Center for Entrepreneurship and Innovation. In addition, the University of Illinois, located downstate in Urbana-Champagne, boasts one of the top computer science programs in the country. In fact, according to Hoch, there are 29 computer science programs in the Chicagoland area alone. While the university community was initially slow to participate in the local technology scene, that has changed. Over the last several years alone, more than 800 university-led start-ups were created locally.

 

 

How fast and how big Chicago’s high-tech start-up community will grow remains to be seen. But given the community’s access to corporate customers and top-level university talent and support, it would appear that moving on up is just a matter of time.