The tech industry in Chicago is thriving. Despite the city’s many challenges including an exacerbated national media spotlight on crime and an over-hyped, bleak economic outlook, the tech industry in Chicago has been growing rapidly in recent years, and it shows no signs of slowing down anytime soon. Taking a closer look at the current state of the tech industry in Chicago, we’ll briefly list the key players driving its growth, and discuss what the future of tech may hold in the City of Broad Shoulders.
Background
Although it may seem to some as Chicago moves at its own slower pace, it’s home to some of the most prestigious universities in the country, such as the University of Chicago, Northwestern University, and the University of Illinois at Urbana-Champaign. These institutions have produced top talent in various fields, including tech.
The Second City is also a hub for finance, healthcare, and transportation, which has attracted a lot of tech companies looking to serve these industries. Additionally, the city has a robust startup ecosystem, which has helped to create a culture of innovation.
Key Players in the Chicago Tech Scene
Who are the key players driving the growth of the tech industry in Chicago?
Source: https://chicago.curbed.com/
Google is one of the largest tech companies in the world, and it has a significant presence in Chicago. The company has offices in the city and has been expanding its workforce there in recent years. Google is involved in various initiatives in Chicago, including offering free internet to low-income households.
Motorola Solutions
Motorola Solutions is a telecommunications company that provides communication solutions to various industries, including government and public safety. The company is headquartered in Chicago and has been expanding its product offerings in recent years.
Grubhub
Source: https://www.shive-hattery.com/
Grubhub is a food delivery company that was founded in Chicago in 2004. The company has grown significantly since then and was acquired by Just Eat Takeaway.com in 2020.
Braintree
Braintree is a payment processing company that was founded in Chicago in 2007. The company was acquired by PayPal in 2013 but still has a significant presence in the city.
Groupon
Groupon is a deal-of-the-day website that was founded in Chicago in 2008. The company has grown significantly since then and has expanded into various markets around the world.
SpotHero
SpotHero is a parking reservation app that was founded in Chicago in 2011. The company has since expanded to several other cities and has raised over $67 million in funding.
ActiveCampaign
ActiveCampaign is a marketing automation software company that was founded in Chicago in 2003. The company has been growing rapidly in recent years and has raised over $240 million in funding.
Cameo
Cameo is a platform that allows users to book personalized video messages from celebrities. The company was founded in Chicago in 2017 and has since raised over $65 million in funding.
Tempus
Tempus is a healthcare technology company that was founded in Chicago in 2015. The company provides genomic sequencing services and has raised over $600 million in funding.
Uptake
Uptake is a predictive analytics software company that was founded in Chicago in 2014. The company provides solutions to various industries, including manufacturing, energy, and transportation.
Challenges Facing the Chicago Tech Industry
While the tech industry in Chicago is growing rapidly, there are still some challenges that need to be addressed. One of the biggest challenges facing the industry is the talent gap. While there are many top universities in the city, there is still a shortage of skilled tech workers.
Another challenge facing the industry is the lack of diversity. According to a report by the Illinois Science and Technology Coalition, only 25% of the tech workforce in Illinois is female, and only 9% are people of color. This lack of diversity can lead to a lack of innovation and can limit the industry’s growth potential.
Finally, Chicago’s tax structure can make it difficult for startups to get access to funding. The tax burden on businesses, especially startups, can be significant and may hinder their ability to invest in research and development, hire top talent, and scale their operations. This issue has prompted ongoing discussions among policymakers and industry leaders about the need for tax reforms and incentives to support the growth of the tech industry in Chicago.
Government Initiatives and Support
Recognizing the importance of the tech industry for economic growth and job creation, the city of Chicago and the state of Illinois have taken steps to foster a favorable environment for tech companies. The city has launched initiatives such as the ChicagoNext program, which aims to support and promote entrepreneurship and innovation. The program offers resources, mentorship, and networking opportunities to startups and provides access to venture capital.
Moreover, the state of Illinois has established the Illinois Innovation Network (IIN) in collaboration with universities and research institutions across the state. The IIN aims to foster collaboration between academia and industry, drive research and development, and provide support for startups and entrepreneurs. It serves as a catalyst for innovation and technology-driven economic growth in Chicago and beyond.
Startup Ecosystem and Incubators
Chicago’s startup ecosystem is vibrant and dynamic, providing a nurturing environment for entrepreneurs to launch and grow their tech ventures. The city is home to numerous co-working spaces, incubators, and accelerators that offer support, resources, and mentorship to startups.
1871, located in the Merchandise Mart, is one of the most prominent tech incubators in the city. It provides workspace, educational programs, networking events, and access to mentors and investors. 1871 has played a crucial role in fostering the growth of the tech community in Chicago and has been instrumental in the success of many startups.
Other notable incubators and accelerators in Chicago include TechNexus, MATTER (focused on healthcare technology), and Polsky Center for Entrepreneurship and Innovation at the University of Chicago. These organizations provide startups with access to capital, mentorship, business development support, and valuable connections within the industry.
Collaboration with Established Industries
Chicago’s tech industry has capitalized on its proximity to established industries such as finance, healthcare, and transportation. The city’s financial sector, represented by major players like the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE), has created opportunities for fintech startups to innovate in areas such as blockchain, payments, and trading technologies.
Similarly, the presence of renowned healthcare institutions like Northwestern Medicine and the University of Chicago Medical Center has enabled the growth of healthtech companies focused on digital health, telemedicine, and data analytics. These collaborations between the tech industry and traditional sectors have resulted in groundbreaking advancements and have positioned Chicago as a leader in innovation.
Future Outlook and Emerging Technologies
Looking ahead, the future of the tech industry in Chicago looks promising. The city continues to attract top talent, with its strong educational institutions and quality of life. Furthermore, ongoing efforts to address the talent gap and promote diversity in the tech workforce are expected to fuel innovation and growth.
Several emerging technologies are likely to shape the future of the tech industry in Chicago. Artificial intelligence (AI), machine learning, and data analytics are already being leveraged across industries to drive efficiencies, enhance decision-making, and deliver personalized experiences. The Internet of Things (IoT) is another transformative technology that holds immense potential, especially in the areas of smart cities, logistics, and manufacturing.
Additionally, the rise of blockchain technology is creating new opportunities for startups in areas such as supply chain management, digital identity, and decentralized finance. Chicago’s strong financial sector and its expertise in trading and exchanges position the city to be at the forefront of blockchain innovation.
The tech industry in Chicago is experiencing significant growth and has become a thriving ecosystem of innovation and entrepreneurship and despite a rise in challenges, shows no signs of slowing down.
