The State of the State

By MARGARET S. KNOEPFLE

Chicago moves on high tech development

THERE is disturbing news abroad, unemployment at home. The wizards are on the move, and we have already embarked on a very strange journey. This in its most succinct form is the message coming out of the symposium held October 27-28 to discuss the findings of Mayor Jane Byrne's Task Force on High Technology Development.

High technology is in large part a spinoff from the arms race. As such, it is an all-or-nothing technology, and we have long been familiar with its Star Trek and On the Beach scenarios. But until recently, high technology — especially as practiced by small, high-risk firms — was not a day-to-day concern in Chicago. The city was doing well with its large low-risk firms, its heavy industry and its agricultural base. If there was worry over defense dollars and new industries going south (see Illinois Issues, November 1976, p. 31), there was also a feeling that Chicago didn't need the exotic enterprises growing up around those big defense centers. If you've got meat and potatoes, why risk hors d'oeuvres?

All that has changed. In the 1970s Chicago and the Midwest plunged into a technology- and energy-related recession from which they have still not recovered (see "Science," p. 29). With more and more people finding themselves nose-to-nose with computers or out of work because of them, high technology is now a bread-and-butter issue. And Chicago, like other cities throughout the nation and the world, has joined the race for jobs and capital.

How is Chicago equipped for this race? The job of the mayor's task force was to find out what the city has and what it needs to attract high tech industries and jobs. The task force focused on high technology because it has long accounted for most of the job growth in the nation's manufacturing sector. Also, new high tech industries can use the services and expand the base of the educational, electronics and energy industries already in Chicago.

The task force limited itself to small, "entrepreneurial" firms because these are one of the two major sources of job growth in the U.S. (the other is the location of branch offices and manufacturing plants) and because small firms would fit into the land space and services the city has to offer.

The task force's conclusion was that Chicago has both the expertise and the markets to build a high tech industrial base. The expertise lies in the city's four major research universities, its colleges and its many industrial and government laboratories. The markets lie in Chicago's already existing industrial and manufacturing plants, its financial and commercial centers, its hospitals and its drug firms. The markets, says the task force, are "almost unique" in their size and diversity. In the long run, they could be the asset that makes the difference for Chicago and the Midwest.

What the city needs, the task force said, is an educational, industrial, financial and governmental network to advise and nurture small, new, high technology firms.

Building a network is both exciting and difficult. Exciting because when people from different backgrounds seek to communicate with each other, there is a tremendous exchange of ideas and energy. That was apparent at the symposium. Difficult because, as in the case of universities and industries, there are basic differences both in style and in ultimate purposes. In addition, corporations tend to have a cutthroat attitude towards other corporations, and universities find it easier to talk to industrialists than to other universities. As for the city's financial experts, they apparently have trouble talking to people in Chicago and spend too much time at O'Hare. All this was also apparent at the symposium, as was the sense that a network is indeed being formed.

Then there are the entrepreneurs, the owners and managers of those small firms which could help rejuvenate Chicago's economy. Entrepreneurs are creative, aggressive people who do not cotton to the bureaucratic way of doing things. Many of them are in fact refugees from government, corporations and universities. Entrepreneurs, are also after big returns — especially high tech entrepreneurs, who are getting offers of funding from all quarters.

The type of company the city is trying to attract starts small, at less than 20 employees. Working on the fine line between applied research and the production of goods and services, such a firm will create about four technical jobs for every engineering job. These firms need, above all, access to the international information network provided by major research universities. They also need advice on products and management and access to technicians. An example of this type of company is Centaur Genetics Corporation which is doing medical diagnostics and agricultural genetics in the city's new high tech research park. As high tech firms grow in size, they become more like small manufacturing businesses but with a greater emphasis on research and development. At this stage, labor and energy costs become important as does a good working environment, housing and good schools. An example of a larger high tech firm is Sonicraft Inc., which designs, develops, manufactures and tests military communications equipment on Chicago's Southside.

January 1983 | Illinois Issues | 4

Finally, to get down to nuts and bolts (which may soon be replaced by lasers, electrons and circuit boards), just what is high technology? From the scientific and technical point of view, it means new knowledge and new ability to do things in the fields of electronics, applied mathematics, biology and materials engineering.

And what kind of high technology can small firms do in Chicago? The task force found promise in the following areas:

• Electronics, communications, computer technology. These can be applied to existing industries such as machine tool manufacture, health care, education, business management, printing and publishing, finance, insurance and real estate.
• Manufacturing automation. Areas of particular promise are robotics, especially sensors (vision, tactile, speech); computer-aided design, especially software; and computer-aided manufacturing, still not overcrowded with either hardware or software manufacturers.
• Biotechnology. The task force defines this somewhat vaguely "as the use of biological processes in commercially relevant activities." What it means is that scientists are recombining genes to produce "materials" useful in agriculture, human and veterinary medicine. And they could do it very well in Chicago which has world-class status in medical research and a built-in market at some of the nation's largest pharmaceutical industries with home offices in Chicago. Of even greater potential the task force believes, is the application of biotechnology in the field of agriculture — with an obvious mid western market. Applications of biotechnology to energy production and environmental management are just now beginning; they too hold promise for Illinois.
• Energy management and control. Big money is needed here and doesn't necessarily lead to the creation of small, high tech firms. Research and development in nuclear energy, coal, natural gas and petrochemicals is going on at industrial, university and government labs. The task force believes, however, that major federally funded research in fields like nuclear fusion could spin off a high tech industry comparable to those nurtured by defense spending in Boston and San Jose. Coal research is another possibility.

Small, high growth companies do have a place in energy management and in making control systems aimed at improved efficiency. The development of software for control equipment and of environmental controls needed by the giant energy industries are two jobs small companies could do.

All this sounds less and less like a plan to bring jobs to Chicago and Illinois and more and more like a revolution. As indeed it is.

But a revolution is no substitute for common sense, and there are some things high technology cannot do. One of them is provide a quick fix for Chicago's present economic problems. Speakers from both North Carolina's Research Triangle Institute and Philadelphia's University City Science Center warned that returns on high tech do not start coming in for at least a decade.

Furthermore, although high technology may be the right tool for transforming a society, it may be the wrong one for nurturing a neighborhood, a fact not lost on Chicago's community organizations. Neighborhoods — which want the same things as any other entrepreneur (land, capital, expertise, autonomy) — are afraid they'll be bulldozed instead of synergized by the high tech revolution. The same goes for labor unions.

And, as was also pointed out in the symposium, high tech firms will not hire Chicago's hard-core unemployed. Nor will they create the ripple effect in transportation and other sectors of the economy that heavy industries do. Nor will they end the disparity between a growing demand for high technology workers and a diminishing demand for the blue-collar workers who already live in Chicago.

Leaving the good folk of the Middlewest to their urgent confabs, let us take a look at the word "technology." Far back, in its most ancient roots "technology" means to "weave with many threads" or "to fabricate with an ax." Somewhere between those two is the right path for Chicago, the state and the nation.□

January 1983 | Illinois Issues | 5