Nurturing innovation in metro Chicago - Metropolitan Planning Council

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Nurturing innovation in metro Chicago

Earlier this week, the Brookings Institution released Export Nation: How U.S. Metros Lead National Export Growth and Boost Competitiveness. The report – the first comprehensive analysis of U.S. goods and services exports produced in America’s 100 largest metropolitan areas – is a wake-up call to nurture export growth, so critical to U.S. economic recovery. Why? 

  • Foreign demand for U.S. products is growing faster than domestic demand, in part because the middle class is growing rapidly in Brazil, India and China.
  • A strong correlation exists between export growth and domestic job creation.
  • Export industry workers in the top 100 metro areas earn roughly one to two percent higher wages for every $1 billion dollar increase in their industries’ exports – even workers without a high school diploma.

Job, wage and industry sector growth – sounds like a prescription for what ails us. But the problem is, not all metro regions have export growth at the top of their agendas. Brookings’ data shows there is a vast disparity among the top 100 metropolitan regions in export growth, and raises the urgent need to cultivate innovation in our metro regions. (The need to focus on innovation also was highlighted in the 2010 Global Manufacturing Competitiveness Index, released in June by the U.S. Council on Competitiveness and Deloitte Touche Tohmatsu. The index identified “talent-driven innovation” as the number one driver of global manufacturing competitiveness.)

How does metro Chicago (or, more specifically, the Chicago –Naperville-Joliet, IL-IN-WI MSA) fair on exports? It’s a mixed bag. Not surprisingly given our size, we rank third in the nation, with $52.88 billion and 5.1 percent share of total exports. Exports account for one out of every 11 jobs, a significant percentage. Machinery is our top exporting industry, driving 13.3 percent of total exports. And Chicago realized a 36.1 percent growth in service exports between 2003 and 2008, placing first among Great Lakes metros.

Here’s the troubling news: Metro Chicago underperforms on innovation compared with our peers, based on patent rates. The average large metropolitan area had a patent rate of 3.6 granted patents per 1,000 workers from 2001 to 2008. Chicago had 2.85 patents per 1,000 workers. 

How is it that the pace of innovation in metro Chicago is stagnating when we have top-notch research institutions, a diverse industry mix, and strong civic organizations and foundations? And what are we going to do about it?

Some of the answers can be found in the GO TO 2040 Draft Plan – northeastern Illinois’ draft comprehensive regional plan, now available for public comment through Aug. 6. At least two of the chapters – “Improve Education and Workforce Development” and “Support Economic Innovation” – recommend strategies the region should pursue to help industries innovate and grow. These include improving data and information systems, nurturing industry clusters, coordinating education and workforce development systems – and creating a culture that champions innovation.

On that point, the GO TO 2040 Draft Plan elaborates: “To become a leader in innovation, our region needs to change attitudes to support the experimentation and creativity necessary to produce commercial innovations. Innovative success stories should be publicized to help educate the region about the value of experimentation. Furthermore, the State and local government should identify and reform regulations or ordinances which might be creating barriers to innovation.”

I’ll take a fly at some suggested reforms in a future post. For now, I’d urge you to share your innovation success stories by nominating a new product or service for the 2010 Chicago Innovation Awards by the deadline of tomorrow, July 31. Nominees can be high-tech, low-tech or no-tech; for-profit or nonprofit; big products from large companies or small products from small companies. The key is – you guessed it – innovation. 

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