When it comes to the United States’ tech cities, Silicon Valley and San Francisco are still tops — but the country’s three biggest cities, including Chicago, don’t break the top 10, according to a report released Thursday by commercial real estate firm Cushman and Wakefield.
The report’s authors analyzed data from a variety of sources to measure factors such as universities, capital, talent and high-growth companies. The authors evaluated the cities on the potential for tech to affect the commercial real estate business, they wrote in the report.
“Certain cities have the tech feel in the air, on the signage, in the conversations at the bars, in its population’s habits and preoccupations,” the report says. “In certain cities, tech is more deeply woven into the fabric of the city itself, and it’s dramatically shaping those local real estate markets.”
Chicago’s overall rank, No. 16, placed it behind Portland and New York and ahead of Atlanta and Los Angeles. The authors addressed the low rankings of the country’s two largest cities in a release, saying New York faced a historic lack of engineers — which may change as investment in local universities and tech schools increases — and that Los Angeles’ economy is too diverse for tech to be a driving factor. They wrote that Seattle, home to tech giants Microsoft and Amazon, is likely the biggest competitor to the Bay Area.
Here are some data points cited by the authors used to assess Chicago:
• In 2016, Chicago brought in more than $1 billion in venture capital investment in more than 200 deals, according to PitchBook data. In terms of dollars, it was just behind Seattle and ahead of the East Bay and Oakland. At the top end, companies in San Francisco raised about $17 billion.
• More than 20 percent of Chicago’s workers are in “knowledge” occupations, which include computers, math, engineering, various sciences, education and health care. Based on data from the Bureau of Labor Statistics, Chicago ranks between Columbus, Ohio and Portland, which have a similar representation of such workers. Los Angeles has the least, at under 20 percent, while Silicon Valley and the Boston area both top 35 percent.
• Chicago’s rate of growth entrepreneurship — defined as the rate of startup growth, share of companies creating many jobs and density of high-growth companies — is near the bottom of the list, based on data from The Ewing Marion Kauffman Foundation. It is ahead of the U.S. average and New York, but lags behind Portland and is far from Washington, D.C., which was No. 1 by that metric.
• The percentage of Chicago’s workforce made up of tech workers is also relatively low compared to other tech cities on the list, at about 5 percent. That places Chicago just behind Indianapolis and just ahead of New York, according to data from the Bureau of Labor Statistics and Moody’s Analytics. Compare that to Silicon Valley, where more than 27.4 percent are tech workers.
• The authors used data from the U.S. Census Bureau and Moody’s Analytics to find that more than 35 percent of Chicago’s workforce has at least a bachelor’s degree. That’s similar to Atlanta and Kansas City. The highest-ranked area on this list is the Denver/Boulder area, where more than 55 percent of workers have bachelor’s degrees or higher.