As the 21st Century rapidly approaches, many high-tech experts predict Chicago`s future as a computer manufacturing and software development center could be brighter than a flashing comet on the latest personal computer game. ”There are tremendous possibilities for computer manufacturing growth in the Chicago area by the turn of the century,” said Wally Biermann, chief of research for the Illinois Department of Commerce and Community Affairs.
Industry insiders already know that the Chicago area is a thriving high-tech center. According to one recent book, ”Growing the Next Silicon Valley, A Guide for Successful Regional Planning,” by Roger Miller and Marcel Cote (Lexington Books, 1987), metropolitan Chicago is currently the nation`s fifth-largest high-tech cluster. Only the Los Angeles area, metropolitan New York and New Jersey, San Francisco`s Silicon Valley and Boston`s Route 128 Corridor lead Chicago in total high-tech manufacturing.
According to the researchers, whose project was funded in part by the Massachusetts Institute of Technology in Cambridge, metropolitan Chicago is home to more than 3,300 high-tech establishments that account for 209,000 jobs. Although these figures include all kinds of high-tech work, they indicate a strong computer-based environment and an abundance of worker expertise necessary for the expansion of computer manufacturing and software development.
”We are trying to build a `critical mass` or infrastructure for the computer industry in Illinois,” Biermann said. ”Studies show that `critical mass` is responsible for the concentration of the electronics industry in Boston and Silicon Valley. We already have a thriving market for computers. Chicago ranks No. 1 in the nation for facilities using mainframe computers, with 4,558 sites. New York is second, followed by Los Angeles. And Chicago is the third largest PC market, with 664,332 units, while L.A. is first and New York second.”
Biermann sees a manufacturing shift away from Boston and Silicon Valley that also could mean greater growth in Chicago. Both the high cost of production and the shortage of skilled labor in those areas add to cost demands that will require manufacturers to be located closer to markets, he argued.
”PCs are under greater and greater pressure to move their facilities nearer to their markets,” Biermann said. ”There is also a limit to the extent that PCs can be manufactured overseas. Exchange rates are putting pressure on those countries. A lot more manufacturing of PCs will have to be done in this country. There will also be much more individuality in the next generation of PCs that will make them market specific. Chicago is at the center of the market.”
The ”critical mass” has been consolidating slowly, he said. ”(The)
market, (the) skilled labor, our educational institutions that are prepared to continuously train high-tech workers and major new projects will begin to attract much of Chicago`s own venture capital that in the past has migrated to the coasts, where the technology was up and running. Once that happens, things here will really take off.”
To see ahead, Biermann said, you have to look back. In the past Chicago was not really a major part of the high-tech computer sector, he said. Now the region-and, to a lesser degree, the city itself-is at the threshold of putting everything in place to be a much heavier participant. ”The next 10 years look infinitely better for us.”
But there is a considerable difference between random predictions or optimistic scenarios and systematic planning that involves the commitment of human and capital resources. If Chicago does become an even more thriving computer manufacturing and software center by the turn of the century, much of the credit will go to the state government, which has aggressively sponsored the industry.
High-tech companies benefit from creative packages of tax breaks, access to state-sponsored venture capital funds, and small business developmental programs, as well as state-coordinated partnerships between universities and high-tech businesses.
John J. Straus Jr., executive director of the Governor`s Commission on Science and Technology, is drafting a five-year plan for furthering high-tech development in Illinois. The plan should be completed in late spring and will recommend ways to match state resources with high-promise high-tech industries such as supercomputing.
”Because Illinois and particularly Chicago are home to many information- driven and -reliant businesses and industries, a local and regional need for better and faster information management systems exists now and will continue to exist well into the 21st Century,” Straus said.
”The scientific and technological resources are in place; technology transfer and commercialization mechanisms are operative; the `critical mass`
is forming. A best-case scenario in which Urbana-Champaign-and Illinois, generally-evolve into an international center for computer development, applications and manufacturing is not just plausible, it is altogether probable.”
The technology transfer and commercialization efforts to which Straus refers were created under the Department of Commerce and Community Affairs`
Small Business Assistance Bureau. There are Technology Commercialization Centers operating in cooperation with 16 universities and research
laboratories across the state.
Chicago-area centers are located at Argonne National Laboratory, near Lemont; Fermi National Accelerator Laboratory, Batavia; the Illinois Institute of Technology; the University of Chicago; Northwestern University, Evanston;
and the University of Illinois-Chicago. In addition, there is a satellite center at the College of Du Page, Glen Ellyn.
One of the centers is housed in the Chicago Technology Park, a cooperative business venture between the University of Illinois-Chicago and Rush-Presbyterian-St. Luke`s Medical Center on the Near West Side. The park receives funds from both the State of Illinois and the City of Chicago. Even though the park is developing a strong biomedical specialization, several of its new companies are creating biomedical computer software.
”About 500 people work in the park now,” calculated Nina M. Klarich, president and chief executive officer of the Chicago Technology Park Corp.
”By the year 2000, the park should be filled to capacity, with more than 3,000 workers. Many of these will be developing computer-related technologies. Several companies that started here will have expanded to new, neighboring facilities. The park itself will have expanded.”
Chicago companies are just beginning to benefit from the University of Illinois` leadership in supercomputer technology. After startup schedules dominated by academic research, two companies-Motorola Inc., Schaumburg, and Amoco Corp., Chicago-have each committed $1 million a year for three years as partners in the Industrial Supercomputing Program at the school`s National Center for Supercomputing Applications on the Urbana campus.
Within a year and a half, UIC will be entirely integrated with the Urbana campus and its supercomputing system. ”Chicago businesses that tap into the supercomputer will be only a microsecond from Urbana,” said Edward R. Grant, executive director of the Chicago-based Information Industry Council. The council deals with problems of the local software industry.
By 2000, Chicago area companies large and small will have direct access to this supercomputing power for creating new products and developing new business systems at far less than a $1-million-a-year access fee.
Jack Bishop is director of the Technology Commercialization Center located in Evanston, a high-tech partnership between the Department of Commerce and Community Affairs, the City of Evanston, Northwestern and private investors. Seventeen companies already inhabit the center`s Small Business Incubator, mostly computer hardware and software firms. The center has assisted another 400.
Bishop develops strong innovative high-tech ideas and startup capital, usually in the range of $50,000, with matching loans that can amount to as much as $750,000. That allows a firm such as the Whitewater Group to survive and become an exporter whose product market is global from the start. The group has created a new object-oriented programming language that is used with Microsoft Corp.`s Windows in all IBM PCs.
Bishop sees things taking off already. ”There are plenty of great new ideas; there is plenty of capital ready to invest in those ideas. We have some of the greatest universities in the world working with us. We have the drive and individuality which typifies Midwesterners. We just have to keep working to put these components together in new and innovative ways. ”
The State of Illinois, with its infusion of economic planning and capital, is not the only stimulus for local expansion of the computer industry. Chicago is second only to metropolitan New York as the home of the most Fortune 500 national headquarters; it is also the second largest venture capital center in the nation. (New York is the first in this category, too.)
Private business is also pooling its talents and resources with universities- and often with the state-to help construct the high-tech infrastructure or
”critical mass” that Biermann feels is needed to make Chicago ”America`s Computer Center” by the 21st Century.
Four years ago, the Civic Committee of the Commercial Club of Chicago issued a report called ”Make No Little Plans-Jobs for Metropolitan Chicago.” The club is a longstanding association responsible for public improvement projects such as the original 1909 Burnham Plan, which included beautification of Chicago`s lakefront. City planner Daniel Burnham`s motto was ”Make no little plans.”
Among the report`s recommendations for re-energizing Chicago`s economy was a call to promote the area as a center for software research and development. ”We have begun to translate those recommendations into tangible results,” said Gavin Campbell, deputy director of the committee, who has helped direct the club`s response since the report was issued.
”We`ve set up a number of nonprofit subsidiaries. The most important in the computer field is the Information Industry Council, which has been operating for more than a year and is seeking to collectively overcome problems that may hamper growth of the software industry. ”
”We are trying to create job growth in the metropolitan area by assisting small- and medium-sized businesses,” said the council`s Grant. He added that Chicago already supports 300 or more software companies, ranging from large companies such as Bell Labs in Naperville, with 6,000 software and hardware engineers, to smaller and more representative groups with 15 employees serving specialized markets. Some software experts claim there may be as many as 1,200 software companies in Illinois, Grant said.
The council hopes to aid Chicago area companies in the information, software, microelectronics and telecommunications industries by putting them in touch with venture capital and business expertise from Chicago`s top companies. The council also may develop high-tech information industry incubator facilities, he said.
According to the center, the computer-driven information industry that supports our information society is a $660 billion business-and that figure is expected to jump to $1 trillion by the new century. The Chicago metropolitan area already is home to key players in this computer-powered industry, such as Ameritech, Motorola Inc., Zenith Data Systems Inc., Bell & Howell Co., Centel Corp. and American Telephone & Telegraph Co.
For example, the AT&T Network Software Center in Lisle employs several hundred software designers. The center should continue to grow, both in terms of number of employees and in the applications done there, into the 21st Century, said Dave Carney, AT&T engineering vice president.
The high-tech corridor along Int. Hwy. 88 (formerly Ill. Hwy. 5) in Du Page County ”is already the switching capital of the world,” Carney said.
”What`s going on in this corridor is simply tremendous.”
Grant sums up the high-tech situation this way: ”Chicago`s computer-driven information industry has a brilliant future.” But as with all predictions, only time can tell what becomes fact.
