Chicago is a city that revels in the "idea" of greatness. In the end, that is one of the qualities I love most about the city. It always strives to be GREAT, GREAT, GREAT! Even its most famous motto is "Make no small plans".

One of Chicago's greatest assets is something less tangible than its neighborhoods and its skyline--it's Chicago's role as an international business powerhouse. Sure, it does not hold up to NYC, but Chicago has slowly been converting itself into the nation's second headquarters city. If you liken it to the human body, NYC is the cerebral cortex and Chicago is the cerebellum (LA is the skin haha )

Anyways, one thing Chicago does to maintain and enhance this status is to fight to keep corporate HQ. An abundance of Fortune 500 companies has a lot of face value, but in reality Chicago's enormous importance in finance and in those midde-sized companies is really what defines this city's sphere of importance. Nevertheless, Chicago has a good chunk of whales as well. But how does Chicago stand on this issue?

For now, Chicago has continued to maintain its dominance as the US's 2nd metro for Fortune 500's. Despite a loss of HQ due to mergers or relocations, it has always managed to pick up a couple more. Chicago lost Bank One but is now gaining BP's subsidiary. Chicago is now JP Morgan's midwest HQ, and even though that sounds wimpy, in reality with William Daley as the head of the division you can be sure a lot of corporate money will be doled out for the city's benifit (lastest news, $1 million is already being given to the City of Chicago for a neighborhood development fund). The Chicago metro also gained the HQ of Office Max as well as a large amount of its assets. Cosi, our favorite little urban diner, recently moved to Chicago from NYC. Eurex created their North American branch in Chicago (although, thank God, it has failed to steal any market share). And I cannot discuss this issue without mentioning Boeing! Nevertheless, the list of losses and gains go on and on .

So where is this whole trend going? Will Chicago continue to have this level of dominance? Is the process of globalization eventually going to leave Chicago behind or catapult it to a new level? Early signs show the latter, but what about 30 years from now? If we always have Daley, surely Chicago will reign supreme, but who knows what jackass will take his place in the future?

And my final question, focused more on people who REALLY know the financial situation in the city. Are their any big companies already headquartered in the area that are close to becoming Fortune 500 companies? What are they?

I am excited to see you guys give your input on this topic. Whether you know anything about business or whether you're just an architecture geek, I look forward to any opinions you can offer.

Urban Politican, in an age of corporate mergers and skeletal sized corporate staffs at HQ (think Boeing Chgo), neither corporate nor bank HQ's means all that much any more. I hear that Chase will be having similiar numbers of staff working in both NY and Chi. To a degree, I think that corporate headquartership just ain't what it used to be.

That is a good point, because in the case of Boeing, I think they only have about 500 people working in their HQ (still is a cool building though).

Even so, having more Fortune 500 HQ raises the visibility of the city. So it isn't as important as it used to be because having a HQ doesn't mean they are bringing a substantial workforce with them, but it is still an important factor.

Not sure what companies are on the doorstep of being Fortune 500. I'll do a little research on that.

Well, the following Chicago area companies were in the 501-600 slots on the 2004 Fortune 1000 list:

Pactiv: 511
Wrigley: 521
Unitrin: 532
Alberto-Culver: 539
Nicor: 575
Northern Trust: 586

Pactiv is a packaging company (Hefty bags, foam packaging, etc.) that used to be part of the Tenneco conglomerate. Tenneco Automotive was the other main part, which is itself now a F-500 company. Pactiv has had lots of problems for years (I know first hand because I'm a lawyer and did a ton of work for them in the late 90s), but they seem to have stabilized for the time being.

Wrigley probably will jump up to the 500 list because they've gone on a mini-acquisition binge of late, including buying Altoids and Life-Savers from Kraft in the last few weeks.

Unitrin is an insurance holding company. It's rarely heard about, mostly because the policies it sells/holds are under many more familiar brand names, e.g. Kemper.

Alberto-Culver is the shampoo/personal products company (Alberto VO-5, etc.)

Nicor is the holding company for Northern Illinois Gas company, the gas utility for most of suburban Chicago.

Northern Trust is a bank that deals primarily in wealth management for very rich people. They don't really do retail banking, which is why few outside of Chicago would have heard of them. But they do have branches in other states where their rich clientele has retired, e.g. Florida and Arizona.

Now a few things about these companies:

1. All but Nicor and Alberto-Culver are headquartered in downtown Chicago.
2. As is the case with all companies, the threat of acquisition is present for all of them. When Wrigley was in the news last week because of its recent purchases, an article mentioned how attractive a target Wrigley itself would be for takeover, partly because of how much cash it has on hand. I would think Northern Trust would be a tasty morsel for any financial services company. And the insurance business is taking so many hits now between the hurricane claims from Florida and now business-practice scandals, that industry could see some consolidation soon too. Finally, the energy business consolidates more every year, so Nicor will have to either eat or be eaten very soon.

There aren't a whole lot of other fast-growing Chicago companies in the remainder of the Fortune 1000. Chicago's best hope for additional F-500 companies would be if some of the old local companies that have been bought out were spun off as independent companies again, e.g. Kraft (owned by Altria), CNA Insurance (owned by Loew's Inc.), or Quaker Oats (owned by Pepsi).

^However, that same article mentioned that Wrigley is unlikely to be acquired because the Wrigley family owns a large chunk of the stock.

Also, Chicago's other chance of gaining Fortune 500 companies is by attracting them from outside. It probably only occurs once or twice every few years, but as long as the city makes itself more liveable and promotes a global environment, it should be in great shape, right?

Kevin J, here's a question. Since most major corporations are publicly traded, then isn't an acquisition merely the purchase of a majority share of a company's stock? If this is true, then isn't it true that probably most companies are owned by other parties? How does this factor into the headquarters? For example, Viacom has moved to (or already has succeeded in) buying out Midway Games, yet Midway Games is still a company based in Chicago and has its own management, etc. So what is the difference?

Urban Politican, in an age of corporate mergers and skeletal sized corporate staffs at HQ (think Boeing Chgo), neither corporate nor bank HQ's means all that much any more. I hear that Chase will be having similiar numbers of staff working in both NY and Chi. To a degree, I think that corporate headquartership just ain't what it used to be.

^yes, but it certainly DOES say something that a city is the host to numerous corporate HQ. Even with the skeletal staffs of HQ's, the fact of the matter is, headquarters represent something. They represent the top executive decision-making division. This means that, slowly, Chicago is moving away from being the city that works and is becoming the city that thinks , much like NYC. This says something about what kind of city Chicago is and how it is perceived

HQ jobs are also among the better paying jobs. That along with the services that are needed to support a HQ (accounting, legal, entertainment, etc.) and it's probably better to have one HQ with 500 in the Loop and all of the back office/support can be in Oak Brook, Florida, India, where ever.

^However, that same article mentioned that Wrigley is unlikely to be acquired because the Wrigley family owns a large chunk of the stock.

Also, Chicago's other chance of gaining Fortune 500 companies is by attracting them from outside. It probably only occurs once or twice every few years, but as long as the city makes itself more liveable and promotes a global environment, it should be in great shape, right?

Kevin J, here's a question. Since most major corporations are publicly traded, then isn't an acquisition merely the purchase of a majority share of a company's stock? If this is true, then isn't it true that probably most companies are owned by other parties? How does this factor into the headquarters? For example, Viacom has moved to (or already has succeeded in) buying out Midway Games, yet Midway Games is still a company based in Chicago and has its own management, etc. So what is the difference?

Fortune 500 relocations are always a possibility, and I didn't rule them out. I just said that Chicago's best hope for more F-500's comes from companies that are already here.

If you buy 51% of a company's stock in the open market, you are essentially the owner of that company. Acquiring a company this way is different than an actual buy-out or merger with the company because the target continues to exist as a legally separate entity. But when it comes down to it, the new owner is free to change that management or move that headquarters whenever they want because they control the majority of the stock and therefore can appoint whomever they want to the board of directors who make all such decisions.

"Headquarters" is a term relative to the nature of an acquisition. In a merger/acquisition of two companies engaged in the same business, e.g. 2 banks, there's only going to be one headquarters of significance. (There may be divisions, but they're still all engaged in basically the same business).

In an M/A involving disparate companies, e.g. Viacom (a conglomerate of movie, TV, music, and other entertainment companies) and Midway, each division is going to operate pretty independently regardless of the common ownership, simply because of the different natures of their businesses. So it's not uncommon in situations like this for "headquarters" of the target company to not be affected by the M/A. But even in a situation like this, some headquarters functions, such as employee benefits, are probably going to be combined to save money.

There are 2 huge F-500 companies of note, Berkshire Hathaway and Loews, which are really nothing more than investors that own the majority of stock in many unrelated companies, each of which runs independently. Berkshire Hathaway owns, among other things GEICO Insurance, Benjamin Moore Paints, and Fruit of the Loom. Loews owns CNA Insurance, Lorillard (a tobacco company) and Bulova (watches).

^Kevin J, with Northern Trust's recent acquisition of the large company in London, do you think that will boost it into the Fortune 500 Count?

BP's subsidiary, Northern Trust, and Wrigley are added into the count, minus Bank One, that would bump the Chicago area's Fortune Count to 32 from just 30 1 year ago, right?

And, of course, assuming nobody else gets acquired!

Actually, if Kraft gets spun off, wouldn't that increase the tally to 33?

Is the JPMorgan midwest HQ in Chicago, or the suburbs?

TUP: I don't know for sure how Northern Trust's recent acquisition will affect its F1000 standing. But they're only paying $500 million for control of something like $63 billion of assets, so the annual revenue stream from these assets (which is what the Fortune lists measure) probably isn't going to be more than 10% of that purchase price. If that assumption is correct, then it would only boost their revenues by $50 million a year, which is barely a blip on the radar for F500 companies, the smallest of which has revenues of over $2 billion a year.

Chicago is also losing Borg-Warner's HQ to Detroit in 2005.

Pottebaum: JPMorgan/Chase's retail and commercial banking division is headquartered in Chicago. It is not a midwest headquarters, but the national headquarters for this entire component of the bank's business.

^Yeah, but Borg Warner isn't Fortune 500 anyhow.

Besides, that doesn't bother me. I don't mind if the companies move if they remain in the midwest.

^You're right that Borg Warner is no longer F500; they're at #520 now, which somehow escaped my notice when I listed the Chicago companies at #501-600 on the F1000 list. And of course, that means that there's always the possibility it will re-enter the F500 at some point.

Kevin J, I started a new thread called "new business in Chicago" or whatever, it's down below (alot of new threads have been started since then). Would you mind looking at that? (most of my business-oriented questions are, essentially, pointed to you :) )

Wow, I never even knew about Citadel until I read this article:


Chicago hedge fund collects Google options
Citadel Investment Group could take 6.6% stake but appears to be building its trading business

By Mike Hughlett
Tribune staff reporter
Published November 26, 2004

Chicago-based Citadel Investment Group, one of the nation's largest hedge funds, has snapped up stock options that could give it a 6.6 percent ownership in Google, the high-flying Internet search company.

But Citadel and its leader, Ken Griffin, don't appear to have designs on building a massive stake in Google. Rather, Citadel appears to be fueling its burgeoning options trading business.

Citadel recently disclosed to federal securities regulators that it had purchased 3.47 million call options on Google stock. A call option allows its holder to buy stock at a pre-determined "exercise" price by a certain time.

Citadel didn't disclose the exercise prices of its Google options.

Google has been the nation's highest-profile initial public stock offering this year. Shares in the Internet search engine started trading in August at $85 and soared as high as $201.60 before retreating. They closed Monday at $165.10, down $4.30.

Citadel is a decidedly low-profile company. But it is the nation's fifth-largest hedge fund with $9.5 billion in assets under management at the end of 2003, according to Institutional Investor. Its funds include Wellington Partners and Kensington Global Strategies.

The company was built by Griffin, a 36-year-old finance whiz who Fortune magazine said is now the eighth-richest American under 40. He and his wife made news earlier this year when they bought a $60 million painting by French impressionist Paul Cezanne.

Funds like Griffin's commonly use options to "hedge" their often complicated investment strategies. Hedges can reduce risk through offsetting sales and purchases of securities.

For example, an investor can buy a stock, but then also buy a "put" option on a stock--insurance in case the stock falls. (A "put" is a bet on a stock's decline, giving its holder the right to sell at a pre-determined price.)

Options can also offer a less risky way of building an equity stake in a company than outright stock purchases.

But Citadel did not buy Google options because it has a "view" on the company and wants to build a position in it, said Scott Rafferty, a Citadel spokesman.

"It's not that we like the company so we are buying a bunch of calls." Rather, Citadel bought the options for its own market-making operation, he said.

Citadel created an options trading arm in 2002. Earlier this year, it bought six seats on the Chicago Board Options Exchange. It is now one of the Chicago exchange's largest option traders.

Citadel is also a member of the International Securities Exchange, the all-electronic competitor to the Chicago board.

Close to 50 percent of options on Google stock trade on the International Securities Exchange, said Matt Andresen, an executive with Citadel's derivatives arm. And Citadel is the "primary market maker" in Google options there.

A primary market maker is like a specialist on a stock exchange; it makes sure there's an orderly balance between buyers and sellers, collecting commissions in the process.

Andresen said that the federal securities filing regarding the Google options "is only a snapshot. It does not give a complete picture of all we own in a security."

Looks like Exelon may buy out a huge NJ company. It's about time! I'm sick of NYC-area corporations always buying out Chicago-area firms. How about stickin' it back to them once in a while?


ComEd parent near deal to buy N.J. utility
Exelon in talks with Public Service Enterprise Group


By Steve Daniels
Exelon Corp. is close to a deal to buy New Jersey-based electric utility Public Service Enterprise Group (PSEG), people familiar with the talks say.
If the deal is finalized, Exelon, which owns Chicago’s Commowealth Edison Co. and Philadelphia’s Peco Energy Co., would add PSEG’s large northern New Jersey service territory to its operations and become the largest electric utility holding company in the country.


continued below

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The Wall Street Journal reported in its online edition today that the companies were discussing a $12-billion stock deal. A deal isn’t completed yet, and there are still some items to iron out, according to one person familiar with the talks.
Exelon has made little secret of its ambitions to grow larger through acquisition, and analysts have identified PSEG as a key target (Crain’s, July 26).

The New Jersey company’s stock price has languished, principally because of operational difficulties its had with some of its nuclear power plants. Exelon’s track record turning around ComEd’s nuclear fleet in northern Illinois is likely a key to these talks.

Headquartered in Newark, N.J., PSEG has 2 million electricity customers and 1.6 million natural gas customers in a service territory covering 2,600 square miles. A separate subsidiary owns nuclear, coal and gas-fired power plants generating 13,000 megawatts in New Jersey, New York, Pennsylvania and other states.

Exelon has 5.1 million electricity customers in Illinois and Pennsylvania, and another 460,000 gas customers in Pennsylvania. Its nuclear plants, accounting for about 20% of the country’s nuclear capacity, generate 18,000 megawatts of power.

Exelon has about 18,000 employees, while PSEG employs 10,500.

With a market value of about $28 billion, Exelon wouldn’t have any trouble financing the acquisition of PSEG, which the market values at about $11 billion.

If the deal is finalized, though, federal regulators are sure to investigate whether the combined company will have too large a concentration of power plants in the Mid-Atlantic, analysts say. Exelon owns power plants throughout Pennsylvania.

Spokesmen for both Exelon and PSEG declined comment.

Exelon shares traded down 1.7% to $41.86 on triple the average volume Friday. PSEG stock was up 3.6% to $47.27 on seven times the normal volume

Provided by Chi-Town:

from Crain's...

Chicago wins as China builds its own Rust Belt

December 20, 2004
By Sandra Jones

China, the nation Midwesterners often blame for taking away factory jobs, is turning to Chicago for the heavy equipment and assembly parts needed to fuel its industrial expansion.

The Chicago trade district, which spans from Rockford to Peoria to Gary, Ind., shipped a record $1.7 billion in goods to China through October. Chicago exports to China rose 67% in that time frame, the most recent data available, compared with 28% for the U.S. as a whole, according to Global Trade Information Services Inc., a South Carolina firm that tabulates U.S. Department of Commerce trade statistics.

"If you look at the industrial base around Chicago, it fits closely with what China is doing," says Doug Smith, an international trade consultant at the University of Texas in San Antonio.

Two industries linked to Chicago's manufacturing roots, machinery and electrical components, together accounted for $1.2 billion, or 72%, of the total goods the Chicago region shipped to China through October.

A few examples: raw materials for cardboard boxes from Smurfit-Stone Container Corp. Unassembled automobile power train systems from Chicago's BorgWarner Inc. Tractors and wheel-loaders from Caterpillar Inc. in Peoria. Surplus engine parts and cockpit equipment from AAR Corp. in Wood Dale. And components from local mid-sized manufacturers, used to make everything from refrigerators to pairs of scissors.

NO 'PLANNED ATTACK'

Daubert Cromwell began exporting rust-prevention packaging to China distributors three years ago, when customers already doing business there, including Caterpillar, General Electric Co. and Honeywell International Inc., asked where they could purchase the Alsip-based company's products locally. Now, Daubert Cromwell sends about $3 million a year worth of the product to China, where it is cut into sheets and sent to factories for wrapping electronic and auto parts.

"It wasn't a planned attack," says Martin Simpson, vice-president of sales at Daubert Cromwell, a joint-venture unit of Burr Ridge-based Daubert Industries Inc. "We just sort of grew into it."

PREDICTING THE MARKET

Jeff Ding, an engineer from China, predicted his native country would need industrial products from the U.S. as its manufacturing base matured, so he moved to Chicago in 1997 to set up shop as an exporter. His company, Flurida Industries in Naperville, gathers products from around the U.S. — from welding machines to electronic sensors for air conditioners — and ships them to China.

"Chicago has many, many factories located here, and it is easy to travel to the East and West coasts," says Mr. Ding. "That's why we chose to set up the company in Chicago."

Schaumburg scrap metal broker Consolidated Mill Supply Inc. exported about $20 million worth of mill scale, fine particles of metal produced while working steel, to China this year to meet the country's exploding demand for iron ore, which is in short supply. "Some of this stuff had no place to go until China ran out of iron ore," says President Kenneth Pies.

China's economy has been expanding at a rate of more than 9% this year, and Gene Huang, chief economist at Tennessee-based FedEx Corp., the largest international express carrier in China, predicts that pace will continue at least through 2005.

"China is becoming a manufacturing assembly base for all of Asia, and that creates the need for capital goods like electronics and machinery," he says. "These are strong areas for Chicago industry, and that bodes well for Chicago exports."

I didn't mean to revive this obviously useless reject of a thread, but I couldn't think of another place to tuck in this little article:

BP spinoff to get $1.3 million in aid

Tribune staff, wire reports
Published January 26, 2005


Gov. Rod Blagojevich's staff said Tuesday that the state will award $1.3 million in grants to the petrochemical spinoff of oil giant BP PLC, which in October chose Chicago over Houston for its headquarters.

The financial assistance was substantially less than expected, in part because it did not include tax credits, payable over several years, that the State of Illinois has used to lure other major employers. Instead, BP opted for an upfront subsidy, which executives said was an important factor in the decision.

The olefins and derivatives unit will receive a $1 million cash grant and $300,000 in job-training assistance, said a spokesman for the Illinois Department of Commerce and Economic Opportunity.

Initially, the spinoff will have a headquarters staff of about 125 in the Aon Center, 200 E. Randolph St., and 215 employees in the western suburbs.

Hello--I'm new to the forum today. I 've been very interested in this topic like "The Urban Politician" and others. How much do HQs matter, and where does Chicago sit in the scheme of things?

There is a very interesting, although short, article written by an economist at the Chicago Fed Bank on this topic. I think it was prompted by the loss of Bank One to JP Morgan. The economist seemed optimistic about Chicago's position nonetheless, and economists tend to be realists, not boosters, so that was encouraging.

There is also another interesting article I have on headquarters and their movement around the country written in .. I think an economics or geography journal. I 'll dig up both of these for you (assuming you don't have them already??)

Both NYC and Chicago have been losing F500 headquarters for years. NYC has lost many more, but of course, it had many more to lose. Research has shown that most HQ growth comes internal growth, not migration, supporting the suppositions of some of the posters here.

I think a more important indicator of economic robustness than number of HQs is # of companies on the fast-growing lists of financial magazines, and stats like number of start-ups per capita, job growth, etc. Unfortunately, Chicago does look very much the rustbelt city when you look at these measures, and some of the usual suspects come out on top (Las Vegas, Atlanta, Austin, TX).

If anyone wants those articles, let me know and I'll post a link. I have to find them.

^I'm also beginning to think that old Fortune 500 cities are just a thing of the past. Chicago still is number 2, but its lead over other cities has substantially faded and Chicago relies on other things to bolster its status, such as enormous growth in its various corporate services sectors (advertising, accounting, law, finance, consulting, software, etc), as well as the recent boom in its futures/stock options industry. Nevertheless, on the surface Chicago will not generate much job growth for a long time as the gain in jobs will only serve to offset manufacturing employment losses.

Chicago is very slow in the new era of tech and fast-growing companies. Oddly, though, Chicago is just so stable. I don't quite understand it--it almost defies gravity. Part of that is the ongoing diversification of its economy. Also, it is slowly making headway in capturing more Venture Capital money to spur new company growth.

Very interesting topic, indeed

As promised:

An interesting article about headquarters location pattern changes from 1990 - 2000:

http://www.findarticles.com/p/articles/mi_m3888/is_2_26/ai_87511591/pg_1


Here is a conference with papers held at the Chicago Fed Reserve Bank on this topic:

http://www.chicagofed.org/news_and_conferences/conferences_and_events/2004_headquarters_and_cities_agenda.cfm

Especially interesting was the fact that Illinois banking was hampered in its ability to expand nationally due to delays in banking deregulation in Illinois. Thus, Illinois banks have been the targets rather than acquirers in mergers. Continental Bank went into bankruptcy and was bought by Bank of America. Harris Bank was bought by Bank of Montreal, and LaSalle Bank by ABN Amro. First Chicago was bought by NBD Bank of Detroit (and then Banc One of Columbus) but each time management of the merged entity chose the larger, more cosmpolitan city, Chicago.

As the lawyer Kevin elluded to earlier, when mergers involve companies that do different things, buyouts of Chicago firms can actually be beneficial for the city. The benefits can accrue if the old company essentially stays put, and is infused with new capital to expand. I can name a number of cases where this has clearly occurred, and other cases where it may have occurred. If others have more information, I would be interested in knowing more about these mergers...

Since the former Philip Morris bought Northfield-based Kraft, they also bought Nabisco, and then merged Nabisco into Kraft. So a substantially larger company is now being run from the north suburbs of Chicago, a company that will eventually be divested from the tobacco lawsuit plagued newly dubbed Altria.

Since Pepsi bought out Quaker Oats, it maintained the company in its new West Loop headquarters. Then Pepsi bought out Florida-based Tropicana and merged its operations into Quaker Oats. There are now high levels of the Pepsi company run from the West Loop HQ, as well as from their main HQ in Purchase, NY.

When 3Com bought out US Robotics, they maintained the company in Skokie, and built an expanded midwest HQ here. (However, they have since vacated some of it since the company ran into trouble after the tech bubble burst, and divested US Robotics, which I think remains in Skokie.)

When Morgan Stanley bought north suburban Discover Card, I believe they maintained the credit card headquarters in Riverwoods. When Morgan Stanley acquired Van Kampen mutual funds (OakBrook) I believe they maintained the mutual fund presence in Oakbrook, although certain functions probably transferred to NYC.

Then you have the opposite sorts of mergers, like the BP-Amoco merger, where corporate functions were duplicated, except for the research and development facility in Warrenville. So the former Amoco building was completely vacated, although the Warrenville facility remained and was expanded.

Keebler HQ stayed in Elmhurst for a while after it was acquired by Michigan-based General Mills, but tax incentives from Michigan helped induce General Mills to transfer the Keebler HQ to Michigan. (This tax incentive game is really zero-sum, and, temporarily putting Chicago boosterism aside, is *really* bad policy. One can imagine good legislators outlawing some day.)

Even as Chicago has lost HQs since the Fortune 500 began around 1950, the F500 has constituted a declining percentage of the economy (Walmart notwithstanding.) But while HQs matter less, and business services matter more, the presence of big HQs does attract business services, I believe, and also, it would seem, provides the big $ needed for high-end cultural amenities.

I think the most important HQ loss in Chicago was Andersen Consulting, since it wiped out a huge number of high-end professional jobs. Andersen was also involved in the loss of Waste Management, since it was reorganized in Texas after it was found out that CEO Buntrock and his cronies were tax evading crooks. However, the Andersen loss was partially mitigated by the fact that a bunch of former Andersen partners founded West Loop-based Huron consulting right after the Enron-related Andersen collapse. Huron is a fastgrowing consulting firm--they plan to hire another 100 consultants on top of the 500 or so they have now just in the next year.

"Chicago is very slow in the new era of tech and fast-growing companies. Oddly, though, Chicago is just so stable. I don't quite understand it--it almost defies gravity. Part of that is the ongoing diversification of its economy. Also, it is slowly making headway in capturing more Venture Capital money to spur new company growth."


Uhhhh,,
Don't tell, that to the people working on some of the grid programming projects at Argonne, U of C and UIC. I've been involved in this and I think anybody who claims this city is so "slow" is a little out of touch with technology.

http://www.globus.org/research/papers.html

Most interesting is the research being done collaboratively in networking...and especially locally.

Uhhhh,,
Don't tell, that to the people working on some of the grid programming projects at Argonne, U of C and UIC. I've been involved in this and I think anybody who claims this city is so "slow" is a little out of touch with technology.

http://www.globus.org/research/papers.html

Most interesting is the research being done collaboratively in networking...and especially locally.

^Sure, I agree. Tons of research and top minds are in the Chicago region in this industry. However, Chicagos still fails to capitalize on it--ie. translation into dollars. It needs the new tech upstarts and the venture capital to keep this talent in the region. Chicago has made a lot of progress in this, but just not enough, IMO

^Sure, I agree. Tons of research and top minds are in the Chicago region in this industry. However, Chicagos still fails to capitalize on it--ie. translation into dollars. It needs the new tech upstarts and the venture capital to keep this talent in the region. Chicago has made a lot of progress in this, but just not enough, IMO

Maybe this is because it is not ordinarly quantified this way? Do youu deny that real research stuff is coming from Argonnne...as opposed to other places ??

Or a better question is, does it matter what anybody thinks? (Because I doubt that 95% of the population has any idea about what I am addressing).

Ravenswood:

Nobody is denying that solid research happens in Chicago--between IIT, Argonne, Northwestern, U. Chicago, UIC, and the others, Chicago is an intellectual and research powerhouse.

The point is that the data show there are not the same levels of business being built off of this research as has happened elsewhere, for example in California or Texas. Venture capital is becoming more prominent in Chicago (no doubt drawn by the research) but still lags others and, until it becomes on a level more par with competing regions, we'll fail to capitalize on the research being done.

So take grid computing for example. Local researchers may be leaders in the field, but having that is just a necessary but insufficient condition for being an economic power in the field. If we're starting to see Chicago-area companies built off these grid technologies, that's great--a sign that we're moving in the right direction. In aggregate though the data show we aren't there yet.

You are correct about that. Grid Programming is not yet at the economically viable level yet in many realms. But there are definite exceptions: JP Morgan is now using Grid programming in its risk applicatiuons in investment banking..

At the U of C, one application of grid programming is used for biomedical engineering. One application in a project I was involved with had to do with parsing DNA strings and finding species relationships...this was done for the Field Museum.

In these cases, the Universities themseleves are taking the lead, not those controlling venture capital. In other words, departments and professors are taking the lead...and the venture capital follows. Participants are "marketing" the applications....and the Universities are doing this collaboratively. DePaul, IIT, Northwestern and UIC were involved. As far as reseach in that area In my involvement with this, only Southern California (the USC Supercomputing center) ranks in reasearch being done for this specific type of networking.

Another example, a lot of people don't realize that Artificial Intelligence was actually invented at the University of Illinois Circle Campus.

Sometimes venture capital "follows" the applications....not always the reverse.