Twenty-five years ago, when people talked about innovation in America, Chicago was rarely the first city mentioned — if at all. Remember the Rust Belt?
The conversation centered on Silicon Valley, Boston, Seattle and perhaps Austin, Texas. Chicago was viewed as a city of industry, logistics, finance and manufacturing. It was primarily viewed as a big corporate town whose luster was fading.
Today, that perception could not be more outdated.
Over the past quarter century, Chicago has quietly transformed itself into one of the nation’s most dynamic and diverse innovation ecosystems — not by trying to become Silicon Valley but by building on its own unique strengths and demonstrating that innovation can thrive wherever talented people, ambitious institutions and collaborative communities join forces.
At the turn of the century, entrepreneurship in the Chicago region was fragmented. Startups existed, but they operated without the dense support networks that founders now take for granted. Venture capital was scarce. Yes, our universities conducted world-class research, but commercialization pathways were limited. Corporate innovation usually took place behind closed doors.
Today, the ecosystem is interconnected in ways that would have been difficult to imagine 25 years ago.
The past couple of decades gave rise to world-class incubators in Chicago such as mHUB, MATTER, 1871, The Garage at Northwestern and the University of Chicago’s Polsky Center — all of which recently landed in the top 80 in Time magazine’s “America’s Best Incubators and Accelerators of 2026.” Three of them — The Garage, the Polsky Center and mHUB — were ranked in the top 15. Twenty-five years ago, none existed here. Entrepreneurs can access these incubators, as well as venture funds, university partnerships, mentorship networks and innovation-focused events throughout the region.
Large corporations in the Chicago region took notice and moved their headquarters from the suburbs to the city to get closer to this entrepreneurial energy. According to CBRE, 68 suburban headquarters or major corporate offices moved to the Loop, the West Loop and River North between 2007 and 2019 alone, including McDonald’s, Motorola Solutions, Beam Suntory and Kraft Heinz.
Research institutions such as Argonne National Laboratory and Fermilab actively support commercialization.
Investors increasingly recognize Chicago as a source of high-growth companies and breakthrough technologies. New funds continue to be created here. Just look at Permanent Capital Ventures, a $200 million fund created in August by Chicago entrepreneurs Mike Gamson and Jason Duboe. They follow in the footsteps of other Chicago-based venture capital firms that have raised money in the past two years: Chicago-based ARCH Venture Partners’ $3 billion fund, Energize Capital’s $430 million fund, Lightbank’s $290 million and S2G Investment’s $1 billion fund are just a few recent examples.
It’s easy to see why investors flock to innovators. They create tremendous sources of economic value. Case in point: Out of 442 past winners of the Chicago Innovation awards, 77 companies have been acquired for exit values now exceeding $159 billion.
Here is what is important about innovation: It is not a narrow concept. It can thrive in organizations of all sizes and types in all sectors — public, private and nonprofit. Such a strong unifying principle has many practical benefits.
More Top Picks Best Smart Toilets With Auto Open
One of the most important results of that in Chicago is openness to the value of collaboration.
Business leaders, universities, nonprofits, government agencies and entrepreneurs are working together to tackle challenges that no single institution can solve alone. Take P33, for example. Launched as an effort to bring together the city’s technologists with one of the city’s legendary civic institutions, the Commercial Club, P33 galvanized leaders across the city and state to focus on quantum computing as the next frontier for Chicago’s innovation leadership.
So far, that strategy appears to be working. The Illinois Quantum & Microelectronics Park is transforming the former U.S. Steel South Works site on Chicago’s South Side into a major hub for quantum computing. With $960 million in public investment and several committed tenants and partners, including IBM and PsiQuantum, Chicago has taken an early lead in the quantum race, and its potential impact on the economy is enormous.
It does not stop there. Technologies that will define the next 25 years, including advanced manufacturing, life sciences, energy innovation, climate technology and agriculture, are fields that align naturally with Chicago’s strengths. Our world-class universities, broadly based economy, transportation infrastructure and deep talent pool provide a foundation that few cities or regions can match.
Equally important, Chicago’s innovation community is inclusive. While significant work always remains to be done, there is widespread recognition that innovation flourishes when opportunities are accessible to people from different backgrounds, neighborhoods and perspectives. The latest crown jewel in Chicago’s civic infrastructure, the Obama Presidential Center, is built on this principle that inclusion leads to progress for all.
The success of a city is built upon the assets it brings to the game. We believe that when the history of Chicago’s economy during the first quarter of this century is written, the creativity in every sector that has been unleashed by the spirit of innovation will be an important chapter.
Tom Kuczmarski is co-founder of Chicago Innovation, an adjunct professor at Northwestern University’s Kellogg School of Management and founder of innovation consulting firm Kuczmarski Innovation. Luke Tanen is president and CEO of Chicago Innovation, author of two books on innovation and academic director of Chicago Innovation Fellows.
Submit a letter, of no more than 400 words, to the editor here or email [email protected].