Chicago software provider SPSS Inc. reported financial results for one of the last times this week, as giant IBM prepares to absorb it in a $1.2 billion buyout.
Get ready for another local tech star to wink out.
For the city, it’s the same old story: Whenever a technology-based enterprise gathers momentum, it’s time to wave goodbye.
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During the dot-com boom, Chicagoans did a lot of waving as some of the brightest digital entrepreneurs headed to the coasts. Then investors anxious to develop Chicago’s technology future felt the sting of the bust, most memorably in Andrew “Flip” Filipowski’s short-lived flameout, Divine Inc.
Chicago continues to lag as a tech center largely because it has failed to unify its diverse assets, said Paul O’Connor of the Chicago Metropolis 2020 civic group. “It’s not together,” he said. “There’s a lot to be built upon, but there’s not the leadership to do it.”
As the nature of technology evolves, Chicago is at risk of missing an ever-greater opportunity, at least as some leading thinkers tell it.
Rather than springing from individual breakthroughs, new technologies increasingly arise by combining existing ones. The advantage goes to regions with the scale and know-how to fit together many small advances. “That principle applies anywhere,” said W. Brian Arthur, professor at the Santa Fe Institute and a Silicon Valley pioneer.
The key is harnessing particular skills, much as Akron, Ohio, managed to expand the uses of polymer chemistry after the tire industry imploded during the 1980s, he said.
Parlaying local knowledge into the next big thing becomes tougher given the increasing complexity of today’s scientific ventures, said Arthur, who explores the subject in a new book, “The Nature of Technology.” Developing nanotechnology, for instance, requires collective willpower, industrial might and plenty of cash, as well as native expertise.
By many measures, Chicago has a long way to go.
A recent study pegs the city No. 14 among North American tech centers, behind Philadelphia, Atlanta and even Edison, N.J.
The study from the Milken Institute takes into account the concentration of technology jobs as well as the overall number, which favors smaller cities. It also gives equal weight to support staff at tech companies and covers only corporate science, as opposed to university research. In addition, the study counts Lake County — home of Abbott Laboratories — separately from the rest of the city.
Still, Edison, N.J.?
Chicago has lagged in some important ways, explained Ross DeVol, director of regional economics at the Milken think tank. It hasn’t been spawning Google-style transformative companies, he observed. It’s also limited by a conservative approach to start-up funding and sluggish technology transfer from publicly supported labs to the private sector, he said.
DeVol sees a chance for Chicago to gain ground in years ahead. Networking across borders, to China and India, for instance, could give a boost to globally connected U.S. cities, he said. A big, diverse economy will be an advantage, too, as the nation recovers from the deep recession. “Certainly you’re better off having more bets on more tables,” he said.
Fragmented as ever, Chicago has plenty of bets, from nanotechnology and clean energy to biotech and material science. “We have some extraordinary assets,” O’Connor said. “They haven’t coalesced.”
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Burns knows business: To read more by Greg Burns, go to chicagotribune.com/burnsonbiz