What does Chicago's evolving tech scene mean for the Midwest?

At TechNexus, we recently laid out our bold predictions for the Chicago tech scene through 2035. But our vision for Chicago is not one of isolation. It's a future where Chicago's acceleration becomes the engine for the entire Midwest tech ecosystem.

To dive deeper into some of our predictions, I spoke with TechNexus Founder and CEO, Terry Howerton, to dive deeper into how Chicago’s growth—from AI to quantum—can reverberate across the Heartland, and what other emerging tech hubs can learn from our model of corporate-startup collaboration.

Q: You say "Chicago will emerge as the global leader in applying AI to legacy industries by 2035," but many other cities in the Heartland could make similar claims. What is unique about Chicago that puts it at the center of this emergence and how do you think other cities (and their corporations) should engage with the city to be part of it?

A: The unique advantage Chicago possesses is a massive, diversified concentration of Fortune 500 headquarters—especially in sectors like manufacturing, logistics, food, finance, and insurance. These are the legacy industries that stand to gain the most from AI implementation. They have the scale, data, and commercial appetite to be first-adopters of cutting-edge B2B AI solutions.

This type of artificial intelligence is being built to solve billion-dollar problems for real-world operations. That unique mix of AI talent and corporate demand is what puts us at the epicenter.

Fortune 500 companies are littered throughout the Midwest and are positioned for similar success with industrial AI. For other Heartland cities and corporations to engage, it needs to be about co-creation, not competition. Companies can partner with Chicago-based venture collaboratives, like TechNexus, and specialized AI-focused firms to access and pilot AI-driven solutions. Cities should establish formal "innovation corridors" with Chicago's major research universities and corporate innovation centers, ensuring their local startups and talent pipelines are part of the broader, regional supply chain for AI solutions. The rising tide will lift all ships, but you have to actively hook up to the towline.

Q: How do you think the bet on quantum will impact the wider region?

A: The quantum bet, anchored by institutions like the Chicago Quantum Exchange and the massive investments in the Illinois Quantum and Microelectronics Park, will have an impact far beyond the city limits—it'll be a Midwest magnet for deep tech talent and capital.

Quantum computing is a massive differentiator, but its immediate commercial applications will be in solving the most complex optimization problems for key Midwest industries: advanced manufacturing, materials science, finance, and logistics. This focus on practical, industrial application is a profoundly Midwest approach to a futuristic technology.

The regional impact will come from:

1. Talent Migration: The investment will draw top-tier quantum engineers and physicists to the region, creating new spin-out startups that naturally look to collaborate with established Midwest corporate R&D.
2. Specialized Hubs: Cities near Chicago, connected by networks like the Quantum Corridor, will become specialized hubs focusing on specific quantum applications—like Detroit for quantum-driven battery R&D or Pittsburgh for advanced materials.
3. Workforce Development: The focus on building this ecosystem will drive a demand for a highly-skilled technical workforce, prompting universities across the Heartland to align their STEM curricula with quantum information science. This benefits everyone.

Q: Do you see other cities turning to their tech communities for civic leadership, as you predict Chicago will do over the next decade?

A: Absolutely, and they should. Chicago's model, where our tech leaders are deeply involved in civic life—from education reform to economic development—is the blueprint for the modern urban center. The old model of separating business from civic governance is obsolete.

Tech entrepreneurs are, by definition, systems thinkers and problem solvers who are comfortable with risk and rapid iteration. These are exactly the skills needed to tackle systemic urban challenges like education gaps, infrastructure issues, and inclusive economic growth.

The next wave of civic leaders won't just come from law and politics. They'll also come from the tech community. Other cities must actively invite their tech founders and CEOs to the decision-making table, giving them a meaningful voice and mandate to apply an entrepreneurial mindset to public policy.

Q: You write that the era of "innovation theatre" is over. What can other states learn from what TechNexus is doing with corporate innovation?

A: The era of "innovation theatre"—think glorified demo days, isolated labs with no budget, and pilot projects that never scale—is definitely over. It was expensive, slow, and delivered little commercial value.

The core lesson from the TechNexus Venture Collaborative model is that innovation is not a department; it’s a growth engine that must be integrated with the P&L.

What other states, economic development agencies, and corporations can learn is this:

• Focus on Commercialization: We don't just invest capital; we invest in commercial collaboration. We force a structured, operational partnership between the startup and the corporate champion to drive a measurable business outcome—new revenue, cost savings, or a new business model.
• Strategic Alignment: Innovation must be tethered to a corporation's long-term growth strategy and immediate business unit needs. If a startup's solution doesn't solve a current, critical corporate problem, it's a distraction, not an opportunity.
• Venture as R&D: Think of the startup ecosystem as an options-based R&D engine. Instead of spending millions internally to build a solution, partner with a venture that has already proven its technology, de-risking the corporate innovation journey.

The lesson is simple: stop managing risk out of the process, and start collaborating for growth.

Q: How do you think publications like StartMidwest help drive the effort to replace "Midwest Modest" with bold confidence?

A: Publications like StartMidwest are absolutely essential in correcting the decades-old issue of "Midwest Modest." This modesty is a cultural habit that’s antithetical to entrepreneurship, which requires boldness, visibility, and a global view.

StartMidwest and similar outlets don't just report the news; they actively shape the narrative of the region. They accomplish this by:

1. Broadcasting Success: They amplify the biggest funding rounds, the most ambitious exits, and the most transformative corporate-startup partnerships, sending a clear signal to coastal capital and global talent that the Midwest is playing to win.
2. Creating Role Models: They put a spotlight on founders who are building multi-billion-dollar companies from scratch right here in the Heartland, making "bold" the new normal for the next generation of entrepreneurs.
3. Connecting the Dots: By covering the entire region, they break down the silos between cities, reinforcing the idea of a cohesive, powerful Midwest tech bloc rather than a fragmented collection of local scenes.

We have the talent, the corporate density, and the capital. What we’re still earning is the swagger. Publications that consistently showcase the scope and ambition of the work happening here are the primary tool for replacing modesty with the bold, unapologetic confidence that our next wave of world-changing ideas demands.

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Jim Dallke is Director of Communications at TechNexus Venture Collaborative in Chicago. A journalist for more than 15 years, Jim joined TechNexus from the American City Business Journals where he was National Editor of American Inno.