Chicago Named an Emerging Market for Civic Innovation in New Innovation That Matters Report

Friday, May 15, 2015 - 10:00am

Business Hub of the Midwest Shows Strong Support for Civic Entrepreneurs from Incubator Programs, Has Opportunity to Strengthen Local Talent Pool 

CHICAGO, IL—According to the new Innovation That Matters report, Chicago is an “emerging” market for civic innovation, driven in part by its position as the business hub of the Midwest, and a growing network of local incubators and accelerators aimed at helping civic startups grow and scale. The report, released today by 1776 and the U.S. Chamber of Commerce and its Foundation, is a first-of-its-kind study on the state of civic innovation in eight leading American cities.

Chicago is in the early-to-mid stages of developing a best-in-class environment for growing and scaling civic innovation, according to the findings. The report also identifies the city’s high-value incubator programs for civic entrepreneurs, and the competitive advantages civic startups receive from Chicago’s position as the Midwest’s business hub, as key factors in its growth, but highlights strengthening the local talent pool as a key area of opportunity.

Over the last six months, 1776 and the U.S. Chamber traveled the country to hear firsthand what is working and what is not as cities build healthy and vibrant startup communities in key civic sectors, such as education, energy & sustainability, health and cities. The report also evaluates how cities can empower startups to work with established corporations and government agencies to foster growth.

“Building and sustaining a vibrant civic entrepreneurial culture is key to empowering cities to tackle civic challenges and drive new economic growth,” said 1776 co-founder Donna Harris. “In collaboration with our partners at the U.S. Chamber of Commerce, we visited Chicago along with seven other leading cities to assess how well cities are empowering local civic entrepreneurs. The report indicates that Chicago is well on its way to becoming a strong base for civic entrepreneurs, and it provides the city with a roadmap for future progress.” 

In addition to Chicago, the report examined how Austin, Boston, Detroit, New Orleans, New York, San Francisco, and Washington, D.C. have fared in spurring civic sector innovation and creating strong innovation economies. To come to these findings, 1776 and the Chamber surveyed local civic entrepreneurs to get their take on the development of Chicago’s innovation economy, and conducted a series of eight roundtables with investors, elected officials, corporate partners and business leaders from Chicago to gain a broader stakeholder perspective.

Click here to download and read the report in its entirety.

How Chicago Fares

Based on the feedback from local entrepreneurs and local stakeholders, the report classified each city in one of the following four categories: Nascent, Emerging, Established or Leading, based on the city’s progress in cultivating an environment that fosters civic entrepreneurship in education, energy & sustainability, health, transportation and cities.

Chicago was rated an “emerging” market, based in part on the strength of its network of startup incubators and accelerators and the valuable support local civic entrepreneurs say they receive from that network. Local entrepreneurs also rated the support they receive from local venture capital investors highly. But there are still key areas for growth, particularly strengthening the local talent pool, which is critical to the development of a strong civic entrepreneurship base.

Local stakeholders interviewed in the roundtable discussions regularly cited the strength of Chicago’s corporate community, and the city’s reputation as the business hub of the Midwest region, as major competitive advantages in potential access for civic startups to corporate support and to the marketplace.

“One great benefit of Chicago is that you can bring all these major actors together into a concentrated ecosystem that is more connected to the Heartland and less isolated than the coastal cities,” said Haibo Lu of CancerIQ. “Things that work in Chicago can spread to the rest of the country more easily.”

National Insights

In its overall findings, the report identified the five keys to success for promoting a vibrant civic innovation economy:

  • Establish System Connectivity – Connect the dots between startups and city stakeholders to help create a collaborative community
  • Embrace the Friction – Allow conflict and competition to flourish as a necessary complement to collaboration, in order to create more effective and dynamic solutions
  • Build the Market – Open opportunities for startups to propose and create new solutions to the existing needs of civic institutions
  • Turn the Lights On – Partner with startups to create information that reveals what is already happening within civic institutions
  • Unlock Hidden Capital – Build avenues to better channel communities’ existing wealth toward startup activity

Among the additional key insights, the report found that cultivating diverse networks of entrepreneurial, civic, business, municipal, and community leaders who are interested and engaged in helping startups grow and scale is a critical component of promoting local civic entrepreneurship. The more robust a city’s network of support for startups and the more proactive city leaders are in bridging and activating stakeholder relationships, the further along a city will be in its development of a civic innovation economy.

The report also found, however, that none of the eight cities have fully leveraged local institutional and corporate networks on behalf of civic entrepreneurs, an important ingredient to entrepreneurial success. Entrepreneurs in each city revealed that local civic institutions—civic sector service providers ranging from schools and hospitals to utilities and local governments—and local corporations are the entities with which they have the least engagement.

Moreover, the report shows that each city starts with the most important commodity for growing a vibrant civic innovation economy: a strong talent base. From traditional tech talent and STEM workers to large teacher and healthcare workforces, each city has significant numbers of local residents who, if mobilized, can help drive innovation in their industries and promote new entrepreneurial initiatives.

In addition to the city insights, the “Innovation That Matters” report contains key industry insights cities should consider when trying to drive innovation in the four civic sectors the report covers. Among the critical takeaways in the four sectors:

  • Education: Schools can do a lot to cultivate more effective Edtech startups by proactively communicating to entrepreneurs what they actually need
  • Energy: Energy consumers benefit from competition in the energy market, so cities should embrace that friction, not fight it
  • Health: Health startups will sink or swim based on their ability to reach and empower consumers, so cities should support their outreach efforts and bridge connections to major health institutions in their market
  • Cities: To drive innovation in city government, local leaders must help mobilize the marketplace by issuing challenges and partnering with startups to create new products that improve city services. 

“We hope cities will take this report and use it to inform their policies and strategies for driving civic innovation,” said Evan Burfield, co-founder of 1776. “The promise here is clear: create a robust infrastructure of support for startups, and they will unleash the kind of innovation that will solve civic challenges, grow economies and improve lives.”

ABOUT 1776

1776 is a global incubator and seed fund that helps engineer the success of the world’s most promising startups tackling important challenges in areas like education, health, energy & sustainability, and transportation & smart cities. Just two years old, 1776 has helped more than 250 startups grow by vetting their viability and connecting them to a “swat team” of support, from investors to mentors, government officials, and institutional market partners that they need to succeed. By creating a global community of startups, mentors, partners, and investors, 1776 is proving that its unique approach to incubation can create a sustained cycle of innovation that connects existing enterprises, corporations, and government entities to the startups that are solving the world’s biggest problems. Visit http://www.1776.vc or @1776 on Twitter for more information.

ABOUT the US Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

ABOUT the US Chamber of Commerce Foundation

The U.S. Chamber of Commerce Foundation is dedicated to strengthening America’s long-term competitiveness and educating the public on how our free enterprise system improves society and the economy. The Foundation conducts research on issues facing business now and in the future.