The final data set in the 2013 Innovation Index Quarter 3 Report covers recent business creation levels in metropolitan Chicago. As with the other outcome-oriented indicators, entrepreneurial decisions about where to start a new business provide insight on how executives view the numerous factors affecting a region’s overall business climate.
In 2012, entrepreneurs created 22,351 new businesses in metropolitan Chicago. While in absolute numbers this ranks the region near the top of the nation, the number of business starts as a share of total businesses in metropolitan Chicago falls slightly below that of other large metro areas.
Reflecting the diversity of metropolitan Chicago’s economy, the new businesses created last year comprise a variety of economic sectors. Recent data provided by Built In Chicago showcase momentum in digital start-ups, one innovative segment of the region’s broad economy. 1 In 2012, entrepreneurs launched 197 digital start-ups in metropolitan Chicago. Compared to 2011, the number of digital start-ups receiving funding of more than $1 million in 2012 also increased, led by health insurance comparison site GoHealth, which raised $50 million to enhance its digital technology. Indeed, more than a quarter of all funding dollars went to health care companies, double the amount the next two largest sectors by financing received (software and marketing).
Digital start-up launches and total funding were slightly down in the first two quarters of 2013 compared with the same two quarters in 2012; however, the number of companies that received funding grew by 40 percent. Additional data on financing trends were featured in the Q1 2013 issue of the Illinois Innovation Index.
Founding a start-up is challenging, but access to resources and a support system can help fledgling entrepreneurs overcome barriers and grow into successful ventures. In 2012, downtown Chicago became home to 1871, a digital start-up incubator designed to offer educational programming, access to mentors and investors, and other resources to help early-stage entrepreneurs. Currently, 1871 is home to more than 200 startups. Since 2012, companies at 1871 have created more than 800 jobs and raised nearly $30 million in investments. One piece of the innovative ecosystem housed at 1871 is the Illinois Innovation Network, launched in 2013 to coordinate resources for start-ups, including capital, physical space, and professional services. Assets such as 1871 are an important part of the region’s business climate and send a positive signal to entrepreneurs.
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Illustration by Dieter Braun