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Chicago: Time For Innovation

Chicago: Time For Innovation

It's totally counterintuitive. To anyone who has been to Chicago lately, the city is bustling and full of optimism. Crime is down, unemployment stands at 4%, and restaurants are packed with people with money to spend. Chicago is booming along with the rest of the nation. But look beyond the current prosperity just a bit and the future of Chicago becomes cloudy. Other cities are innovating and changing, bringing new dynamism to old industries or creating new ones that will take them into the 21st century. San Francisco has high tech. New York has securities, banks, and media. Los Angeles has entertainment. Boston has mutual funds and tech. Chicago has...what?

The harsh truth is that Chicago is slipping as a business capital. Last year, Frankfurt's Eurex took away Chicago's title as the world's biggest futures exchange. Corporate headquarters are disappearing in the miasma of mergers, and those that remain are not on the cutting edge of the New Economy. Times are good now, but there is plenty of data showing that Chicago is living off its past and not doing enough to insure its future.

Chicago should begin by revamping its famed bourses, the Chicago Board of Trade and the Chicago Mercantile Exchange. Once preeminent, they have both failed to keep up with the Internet age. European exchanges are leaving them in the dust. Traders still shout themselves hoarse in the pits. Hand signals still project price. It's like watching a movie in black and white. The exchanges must end their hidebound ways. Electronic trading is clearly the way of the future.

Chicago is also well behind other cities in the transition to high technology. Austin, Boston, New York, Portland (Ore.), and Northern Virginia to name but a few, have done a much better job in adapting their old economic bases to new technological realities. A first step would be to improve entrepreneurial links with the region's best technology schools--Northwestern University and the Illinois Institute of Technology--that is comparable to that found in Stanford, MIT, and Chapel Hill. Venture capital funding must become available to the best and brightest.

Chicagoans may be permitted to view any criticism of their great city with disbelief. It appears so obviously prosperous. But the facts are there if they are willing to see them. Chicago has to reinvent itself one more time.