Lori Lightfoot on turning Chicago into a unicorn machine

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The pandemic did a lot to decrease the primacy of coastal cities as meccas for the brightest minds in tech. As tech work migrated from the workplace area to digital area, all of the sudden the cost-benefit calculus of life within the tech facilities utterly modified. Paying sky-high rents stopped making sense: As tech staff fled San Francisco, one-bedroom flats went from $3,300 a month to $2,400. Many techies went again to the place they got here from to be near household and the acquainted, whereas nonetheless conserving their paycheck. Now that the pandemic is ending, many aren’t keen to surrender that life and return to the workplace.

Whereas Austin, Texas, Madison, Wisconsin, and Palm Seaside, Florida, are getting their share of the tech diaspora, Chicago can be hoping to draw a few of this expertise. Mayor Lori Lightfoot, in her first post-pandemic journey, was in San Francisco final week making the case for her metropolis to tech expertise and buyers.

“We’re telling our story—jettisoning our Midwest modesty and speaking about it,” Lightfoot tells me.

“We’re being very intentional about ensuring that Chicago is a part of the dialog for people who find themselves beginning to go searching and say, ‘You recognize what? Possibly I don’t should be on the West Coast and in Silicon Valley and the Bay Space’,” she says.

Unicorns in Chi City

The pandemic has already introduced 32 firms to Chicago, Lightfoot says. That complete contains tech firms, additionally some life science (SOLVD Health) and logistics firms (together with U.S. Xpress, and Flock Freight). Google opened an workplace in Chicago in 2015, then one other one in 2019. Groupon and Grubhub are Chicago-born.

Town can be turning into a birthplace for unicorns, or startups valued at above $1 billion. 9 of the 71 unicorns minted within the U.S. to date this yr are based in Chicago. That makes Chicago aggressive with better-known tech hubs: San Francisco and the Bay Space have minted 17 unicorns to date this yr, in response to PitchBook valuation information. New York Metropolis is available in second with 11 unicorns. Los Angeles, Boston, and Seattle all path Chicago with 5, three, and one, respectively.

Chicago has a historical past of unicorns as nicely; it birthed two in 2020, and one other—Tempus Labs—in 2018. Chicago financial growth group, World Enterprise Chicago, says the town has now produced a complete of 19 unicorns.

Quite a few components play into the town’s startup development. Advances in cloud computing and ecommerce tech have made it simpler for startups to launch and scale companies from nearly anyplace. Many of those companies rely on information facilities, and new Chicago-based information facilities might find yourself being a large supply of job development. Cushman & Wakefield’s information middle advisory group ranked Chicago the second-best place in the world to construct a information middle, based mostly on land availability, land value, fiber connectivity, and different components. In 2019, Illinois handed a package of tax incentives to draw information facilities.

Chicago life

None of these fiscal, logistical, and strategic components matter if the town can’t produce new tech expertise within the native universities, or entice expertise from different locations, and maintain these individuals within the space. Techies anticipate to reside in a metropolis with tradition and nightlife. Silicon Valley staff had been as soon as content material to reside down on the peninsula; however over the previous decade, they moved to San Francisco, the world’s middle of city tradition. They rented overpriced flats and dreamed of someway, someplace, proudly owning a house of their very own—a prospect that for a lot of is out of attain in SF.

That’s why tradition and residential possession are large elements of Lightfoot’s pitch.

“I’m going to place our music, arts and tradition, and foody scene, up towards anyone, actually on the planet,” Lightfoot says. “In case you’re in search of way of life and affordability, the place you should buy and reside within the metropolis, there are only a few locations in america which can be higher than Chicago.”

It’s no secret that Chicago additionally has its issues. Over the Fourth of July weekend (Friday by Monday), 100 individuals had been shot in Chicago, 18 of them fatally. Lightfoot has been underneath stress to sluggish the violence and has known as on the courts to maintain harmful criminals off the streets. Chicago noticed 496 homicides in 2019, the yr Lightfoot took workplace, however the quantity jumped to 770 in 2020. Town recorded 336 homicides at 2021’s midway level, which put it on monitor to exceed 2020’s tragic complete.

Some tech firms are doing what they will to make it simpler for staff to make the transfer to Chicago. Garry Cooper, CEO of the useful resource administration and change platform Rheaply who’s a part of the mayor’s delegation, advised me his firm provides staff a likelihood to do a “tour of responsibility” in Chicago. It’s the corporate’s approach of giving far-flung workers a likelihood to take a look at Chicago life earlier than committing to maneuver there.

“We’ve got a few people who reside in New York, who’re truly going to be in Chicago for the subsequent six months and simply residing in Chicago,” he says. “So we’re seeing individuals simply sort of are available in and take a look at out the town.” Cooper says a number of have truly made the choice to maneuver.

A citywide facilitator

I requested Lightfoot if Chicago’s effort to draw tech concerned exhausting money or tax breaks. She says the town, together with the mayor’s workplace, is principally taking part in the function of facilitator. When you think about that rising a tech ecosystem requires getting a lot of various individuals speaking to one another, her focus is smart.

Chicago is house to many Fortune 100 and Fortune 500 firms, spanning quite a few industries, together with monetary providers, manufacturing, prescription drugs/biotech, meals manufacturing, and healthcare. Tech firms, a few of them startups, promote specialised B2B services to these firms, and B2C merchandise to their workers. Chicago-based incubators, equivalent to 1871 and mHUB, are there to form new startups. Enterprise capital corporations, each in Chicago and elsewhere, are in search of promising firms to fund. Native nonprofits, equivalent to Bonfire and P33, are centered on attracting and growing a numerous expertise base. Some tech startups develop up inside analysis facilities at native big-name universities equivalent to Northwestern, the College of Chicago, DePaul, and Loyola.

The mayor’s workplace is attempting to verify everybody is aware of one another, and that the appropriate concepts and sources circulate to the appropriate individuals on the proper occasions. It additionally works with native actual property homeowners and builders to verify sufficient workplace area, lab area, and information middle area is accessible, the mayor tells me.

Range issues

Chicago additionally has a numerous inhabitants to go together with its numerous mixture of industries. Whereas massive Silicon Valley tech firms have struggled to convey variety to their ranks, Chicago’s tech variety image seems to be decidedly completely different, at the least for now.

Twenty six % of Chicago’s tech workforce is Black or Latinx, in response to the mayor’s workplace. That’s a lot larger than the trade at massive: A 2014 report from the U.S. Equal Employment Alternative Fee (EEOC) stated solely 7.4% of the high-tech workforce was Black (in comparison with 13% of inhabitants), and that solely 8% of that workforce was Hispanic. A 2019 Wired report suggests these numbers had barely moved in the course of the subsequent 5 years.

Bonfire CEO Suzanne Muchin, who was a part of the mayor’s delegation, cites a 2019 Startup Genome stat saying 34% of Chicago’s startups (tech and in any other case) are run by women. Bonfire is a expertise accelerator program designed to arrange for management roles in enterprise.

Muchin believes it’s Chicago’s numerous enterprise ecosystem that’s behind that spectacular statistic. “That’s not a throwaway line as a result of you need to ask your self the query: What are the situations that create that?,” Muchin says. “What’s the neighborhood that helps these ladies? Do our VCs consider in ladies? Are the ladies entrepreneurs supporting different ladies?”

Mayor Lightfoot has loads of politically loaded points on her desk in Chicago, from crime to COVID-19 to excessive property taxes to the town’s monetary future. However bringing extra tech to city is one thing Chicago’s residents can agree on.

“Each job that you can imagine now—and sooner or later that we don’t even know goes to be created—is someway going to be tied to tech,” Lightfoot says. “There’s a crucial function that tech goes to play in any financial system of the long run.”