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Illinois‘ Digital Technology Titans: A Closer Look at the State‘s Largest Tech Companies

When most people think of major tech hubs in the United States, places like Silicon Valley, Seattle, and New York City typically come to mind first. However, there‘s a strong case to be made that Illinois belongs squarely in that elite company. The Land of Lincoln is home to a deep bench of both established tech giants and fast-growing digital startups, many of them clustered in and around the Chicago metro area.

Chicago‘s Rich History of Innovation

Chicago‘s status as a center of technology and innovation actually dates back to the 19th century. The city played a key role in the development of the telegraph and telephone, and was home to early tech pioneers like the Galvin Manufacturing Corporation (later known as Motorola). In the 1940s and 50s, Chicago-based Armour Research Foundation (now IIT Research Institute) was a major center for early computer science research.

More recently, Illinois has been at the forefront of the digital revolution. It has emerged as a hub for cloud computing, e-commerce, health tech, and more. Today, the state boasts over 14,000 tech companies that employ nearly 320,000 people, according to CompTIA.

The Heavy Hitters

Leading the pack are several household names with deep roots in Illinois. Boeing is the state‘s largest tech employer, with around 1,900 workers focused on cutting-edge aerospace technologies. Motorola Solutions, spun off from the consumer electronics giant in 2011, is a leader in communications tech with over 2,300 Chicago-area employees.

But the state‘s strength in digital technology extends well beyond these marquee names. Professional services firms Accenture and Deloitte both have major technology practices headquartered in Chicago, focused on areas like cloud, cybersecurity, AI and blockchain. Accenture employs more than 5,000 people in the city, while Deloitte has over 4,000 local workers.

Legacy tech companies are well-represented too. IBM, Cisco Systems, Microsoft, Oracle and SAP all have significant presences in the Chicago metro area, collectively employing thousands. Many of these firms have established major innovation labs or customer experience centers in the region.

Salesforce, a pioneer in cloud-based software, has also been expanding rapidly in Chicago. The company recently opened a 57-story regional headquarters downtown that will house over 1,000 employees. Google and Facebook have growing Chicago offices as well.

The Next Generation

While the big guns are certainly important, much of the excitement in the Illinois tech scene is around younger, high-growth digital startups. Chicago has emerged as a hotbed for tech entrepreneurship, and has birthed several notable "unicorns" valued at over $1 billion.

One of the biggest local success stories is Groupon. The daily deals site, founded in Chicago in 2008, rode a wave of buzz to a blockbuster IPO in 2011. While the company has struggled at times since then, it still employs over 1,000 in its sprawling headquarters along the Chicago River.

Other Chicago startups have found success by carving out niches in massive industries like logistics and real estate. Freight brokerage platform Echo Global Logistics and warehouse robotics firm Stord are two prime examples. Real estate tech companies like Compass, VTS and Convene have also established sizable Chicago offices.

Many of the most promising startups are focused on enterprise software. G2, which provides a "Yelp for business software," raised $157 million in 2021 at a valuation of over $1.1 billion. AI-powered e-discovery platform Relativity is another fast-grower, with 800+ Chicago employees.

Illinois Tech Sector by the Numbers
Source: CompTIA Cyberstates 2020

As the above data shows, Illinois has built a formidable technology industry over the past few decades. In total, the sector employs nearly 320,000 people across 14,000 companies. It also makes a massive contribution to the state economy, accounting for an estimated 8.2% of the total.

Importantly, this growth appears to be accelerating. Tech employment in Illinois surged by over 5% from 2019 to 2020, outpacing the national average. Compensation is on the rise too – tech workers in Illinois earned an average of $103,400 in 2020, up 4.5% from the prior year.

"Illinois‘ technology industry is not only a critical growth driver for the state, but is also well positioned to help lead the state‘s economic recovery in the months ahead," noted Todd Thibodeaux, president and CEO of CompTIA, in the Cyberstates 2021 report.

An Ecosystem Built to Last

Several key factors have converged to make Illinois a lasting power in digital technology. First and foremost is the sheer depth of talent produced by local universities like Northwestern, University of Chicago, University of Illinois Urbana-Champaign and Illinois Tech.

Degrees Awarded in Illinois, 2019
Source: Illinois Science & Technology Coalition

Illinois colleges and universities awarded over 5,000 degrees in fields like computer science, information technology and engineering in 2019. The University of Illinois Urbana-Champaign frequently ranks among the top 5 schools in the nation for computer science and engineering.

Research taking place at these institutions and affiliated labs like Argonne National Laboratory is also helping to fuel the industry. Areas of expertise include AI/machine learning, quantum computing, robotics, bioinformatics and cybersecurity.

"Illinois is uniquely positioned for breakthrough discoveries that can transform society," said Dr. Jay Walsh, vice president for economic development and innovation at the University of Illinois System, in a recent interview.

Chicago‘s central location and transportation infrastructure are also major assets. The city is within a 4-hour flight of nearly anywhere in the US, and boasts the nation‘s #1 port by value and #3 airport by passenger volume. This makes it an ideal base for companies serving customers across the country.

Cost is another advantage. While by no means cheap, Chicago is significantly more affordable than coastal hubs like the Bay Area or New York City. This allows startups to stretch their VC dollars further, and larger firms to build sizable teams without breaking the bank on labor costs.

Last but certainly not least is the overall strength and diversity of Chicago‘s economy. The metro area is home to more than 400 major corporate headquarters, a huge asset for B2B tech firms looking for customers. Key industries range from advanced manufacturing to healthcare, transportation, finance and food processing.

Challenges and Opportunities Ahead

To be sure, the Illinois tech industry is not without its challenges. The state faces stiff competition from larger hubs in California and New York, as well as up-and-comers like Austin, Miami, and Salt Lake City. Funding can also be an issue – while Chicago is one of the nation‘s top cities for VC investment, it still lags well behind Silicon Valley and New York.

Building a more diverse and inclusive industry is another priority. Chicago has seen some progress on this front, with the percentage of minority tech workers rising from 15% in 2016 to 20% in 2020 according to data from P33. However, much work remains to be done.

At the same time, the COVID-19 pandemic has opened up new opportunities. The rapid shift to remote work has made Chicago an attractive destination for coastal tech workers looking for a more affordable lifestyle. The rise of e-commerce, telemedicine and remote learning has also created new demand for Illinois‘ digital technology products and services.

"The pandemic has accelerated the pace of digital transformation across industries, and that plays to Illinois‘ strengths in areas like cloud computing, data analytics, and automation," said Julia Kanouse, CEO of the Illinois Technology Association, in a recent interview with Built In Chicago.

The state is also taking proactive steps to support continued growth in the sector. In 2019, Governor J.B. Pritzker launched a 5-year plan to invest in Illinois‘ innovation economy, including $2 billion to develop tech incubators and research centers at state universities. Chicago Mayor Lori Lightfoot‘s ChicagoNEXT initiative aims to support 10,000 new tech jobs by 2023.

A Digital Future Powered by Illinois

Looking ahead, it‘s clear that Illinois and Chicago are well-positioned to be leaders in the next wave of digital innovation. The state‘s potent mix of top-tier talent, world-class universities, diverse industry base and supportive ecosystem provides a strong foundation for continued growth and success.

"We have all the ingredients here to be a tier-1 tech hub," said Chris Gladwin, CEO of Chicago-based software firm Ocient and a veteran entrepreneur, in a recent interview with Crain‘s Chicago Business. "The key is getting more companies to that critical stage where they‘re really breaking out."

If recent history is any indication, there will be many more Illinois tech companies making that leap in the years to come. From the household names that have called Illinois home for decades to the hungry young startups just now making their mark, a common theme emerges: a drive to leverage cutting-edge digital technologies to solve big problems and create value. It‘s a culture and mindset that bodes well for the future of Illinois tech.

As the data shows, this is an industry already generating hundreds of thousands of well-paying jobs and billions in economic value for the state. And it‘s not just about the numbers – Illinois‘ digital technology companies are developing products and services with the potential to transform fields like healthcare, transportation, manufacturing and more. They‘re putting Illinois at the forefront of the technologies that will shape the 21st century.

So the next time the conversation turns to leading tech hubs, don‘t be surprised if Illinois enters the discussion. The state may get overlooked at times in favor of its coastal counterparts, but it‘s building a digital technology ecosystem that demands to be reckoned with on a national and even global scale. Keep an eye on the Land of Lincoln – its biggest tech triumphs may be yet to come.