Chicago was hardly a hotbed for blue-chip companies when, in 1997, Max Levchin, a young and ambitious graduate of the University of Illinois, was looking for a place to start his tech venture. Mr Levchin was keen to start his company in Chicago, as this was where his parents had migrated to when they moved from Ukraine in 1991 But, the so-called windy city was not very open to his start-up plans. 

“People didn't understand it. There was no money, no ecosystem here for entrepreneurs,” Mr Levchin told John Pletz, a reporter with local business publication Crain's Chicago Business, in October 2013.

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So, Mr Levchin went instead to Silicon Valley, where he co-founded PayPal, a financial services platform that, in 2012 alone, recorded $5.6bn in revenues.

A tech tonic

According to Rahm Emanuel, the mayor of Chicago, the environment might not have been conducive for tech entrepreneurs in the 1990s, but things have changed since then. “PayPal was not founded here because [there was a] lack of people who could support it. But it is back [in the city], and that is because of the people that can be found here,” says Mr Emanuel, referring to PayPal's $800m purchase of Braintree, a Chicago-based credit card processing company, in September 2013.

He adds that the city came full circle, from losing its graduates to Silicon Valley to attracting tech talent from other big cities. According to Mr Emanuel, what appeals to tech professionals is “a real sense of community, which is not cut-throat, and a city where life is affordable”. 

Braintree is not the only Chicago-based company that has made headlines in the past few years. Groupon, a daily deals site, was set up in the city in 2008, and has since grown into a company with 10,000 employees worldwide and $2.6bn in annual revenues. Also GrubHub, an online food ordering company founded in 2004 by MBA students from the University of Chicago Booth School of Business, is currently valued at $2bn.

Crossborder investments into creative, ICT and electronics clusters have been on the up recently as well, according to data from greenfield investment monitor fDi Markets. Last year 40 creative, ICT and electronics projects were launched in Chicago, the best year for the sectors in the city since fDi Markets started tracking investments in 2003.

Further advances

As well as working to attract more tech investments, Chicago is also trying to establish itself as a hub for advanced manufacturing. Its efforts in this field received a considerable boost in February when US president Barack Obama announced that the city had been selected as the site for a new $320m digital manufacturing and design innovation institute, a public-private partnership co-funded by the country's defence department. 

“We had the best-value proposal, not only because our consortium lined up $250m in matching funds, but also because we have a robust network of universities and private companies well suited to work on next-generation manufacturing,” says Jeff Malehorn, president and CEO of World Business Chicago, the city's public-private economic development entity that participated in the bid.

"We have the human capital and infrastructure to attract investments, be it in advanced manufacturing or creative technologies," he adds.