Illinois Chamber President’s Message: Doug Whitley
For years Illinois citizens, especially business owners and managers, have suffered embarrassment over political corruption, higher taxes and fees, chagrin over failed government fiscal policies, frustration with anti-business rhetoric and public employee discontent.
Employers have suffered anti-business initiatives by our own elected officials while Governors from other states routinely launch business-poaching parties to entice our highly desirable job creators to seek greener pastures.
Enough! Despite governmental and political headwinds Illinois remains a great state that offers business owners and leaders many advantages that should not be overlooked or dismissed.
The key components for business success are present. There is an abundance of land, fresh water, highly educated and trained workers, competitively priced energy, state of the art data capability and extensive transportation networks to move people, raw material, goods, and services. Population density assures a substantial labor pool. A higher than average personal income for Illinois residents and the appeal of an attractive destination city for visitors guarantees a robust and extensive consumer market. Illinois is home to quality educational and health care facilities, as well as renowned research institutions and national laboratories.
Chicago is a world-class city with the ethnic diversity and global connections to cultivate and propel international business growth. Illinois’ second urban area, comprised of the “metro-east” communities of southwestern Illinois, accounts for much of the industrial output of the St. Louis region. The “metro-east” helps anchor the state’s position as a transportation center and a gateway to the west.
Illinois is blessed with the most productive farmland in the world. It is the foundation upon which agri-business industries rely. Food processing, farm supplies, grain handling, global markets and advances in bio and machine technology are derived from ever-improving productivity on Illinois farms. If your business is connected to agriculture Illinois is the place to be.
Illinois sits above vast reserves of high BTU coal deposits. There are more BTUs under Illinois than under the Saudi desert and Kuwait combined. Most Illinois coal production is currently being shipped to international markets. Thanks to a new hydraulic fracking law Illinois oil and gas production is poised for a resurgence that could greatly improve opportunity and economic fortunes in Southern Illinois.
Unlike much of the eastern United States, Illinois still offers an abundance of land in both urban and rural settings that is readily available for development. And, unlike many of the western states, Illinois has an abundance of fresh water resources.
In addition to having freshwater for irrigation and industrial use, commercial barge traffic is plentiful and efficient. Illinois-based shippers have access not only to the Great Lakes and the inland river waterways of the heartland, but also have saltwater access through the St. Lawrence Seaway to the Atlantic Ocean and the Gulf of Mexico through the port of New Orleans and the mouth of the Mississippi River. The Mississippi River provides direct access to the soon to be expanded Panama Canal and the Pacific Ocean.
Illinois hosts large population centers in the heartland of the nation and provides access to suppliers, industrial markets and raw materials. Illinois’ central location facilitates one-day business travel schedules and offers a convenient location to gather for meetings and conventions. Illinois is the center of a twelve state agricultural and industrial region that 65 million people call home.
The central time zone is a business advantage because it facilitates convenient workday communications with other locales throughout the continental United States, Canada and Mexico.
The expanse of Shawnee National Forest that extends across the Illinois Ozarks is an overlooked and underutilized recreational wilderness that continually amazes visitors, as does the grandeur of Lake Michigan and the width and palisades of the Mississippi River that shapes the state’s western border.
Transportation networks are one of the cornerstones of Illinois’ economy. Illinois is known for transportation, logistics and warehousing. Our state contains the largest rail hub in the nation and is the only state served by all of the class-one railroads. Illinois holds 165 rail yards and 12 expansive, modern intermodal terminals. Currently, 25 percent of all U.S. rail traffic and 46 percent of all intermodal units in the U.S. touch the Chicago region. Based on containers handled Chicago is classified as the third largest port in the world and is the only mega shipping port in the top 10 not located on saltwater.
America’s Central Port located on the east bank of the Mississippi River in Granite City has 84 tenants on 1200 acres. It currently serves 2500 barges and three million tons of cargo each year. The river facilities at St. Louis make the region the second busiest inland port and the northern most ice free dockage in the U.S
Illinois has the third largest interstate highway system in the country and is served by 15 interstate routes – more than any other state. Eight interstate highways converge on the Chicago region while four major east-west arteries converge at St. Louis.
Chicago’s O’Hare airport hosts the nation’s two largest airlines, but also accommodates 40 other airlines. O’Hare airport handles direct flights to 255 cities, nearly half of which are international destination. Chicago’s Midway airport handles direct flights to 140 U.S. cities and 57 international locations.
The nation’s oil, gas, chemical and fiber optic networks converge in Illinois. Chicago’s Union Station is the hub for AMTRAK nationwide passenger rail service.
The RTA is the third largest public transit system in the United States, services a population of 8 million and provides nearly 2 million rides every day. Public transit service in the remainder of the state, including the Bi-State Development Agency serving St. Louis region, accommodates 40 million riders per year.
More than 81 percent of Illinois households can subscribe to a broadband service that downloads up to 100 mbps. More than 93 percent of households can subscribe to broadband service with download speeds in excess of 25 mbps. AT&T alone offers the super fast mobile broadband 4G LTE network coverage to 99 percent of the Chicago market area and coverage for 88 percent of the state’s population. Verizon, T-Mobile and others offer similar service. In short, almost all Illinois citizens and businesses have access to the fastest mobile broadband capability.
Specialized networks for dedicated users also exist throughout the state. For example, Illinois Rural HealthNet (IRHN) is a high-speed, 3,100-mile, fiber-optic network. It is revolutionizing healthcare in rural areas by creating a fiber-optic network linking hospitals and clinics to a statewide Health IT network. The IRHN allows healthcare providers to connect to the fiber backbone and exchange vital information over a dedicated healthcare network, at speeds up to 1 Gig.
Illinois is well equipped to move people, physical products and electronic commerce.
Illinois was one of the first states to deregulate electric energy pricing and embrace free market pricing of electric energy. In 2013, 78 percent of electricity used by residential and business customers in Illinois was purchased through competitive bidding. There are over 80 companies permitted to sell electricity in Illinois. More than 600 Illinois communities are making wholesale purchases and offering aggregated pricing to the residents of their communities. Consequently, the average delivered price of electricity in Illinois is among the lowest in the United States.
Despite great change in the industry during the last decade our state has increased electric generation capacity and is a net exporter of electric power to customers in other states. Illinois is the home of the largest number of nuclear power plants in the country, has the nation’s newest and cleanest coal fired generation plant, and has emerged as the headquarters for most of the companies developing wind energy capacity in the U.S.
Natural gas customers have also benefited from the state’s leadership in accepting competitive wholesale market pricing. There are more than two-dozen certified non-utility natural gas suppliers seeking customers in Illinois. Nearly 100 percent of industrial users and two-thirds of commercial business in Illinois are taking advantage of open market purchasing arrangements for their natural gas supplies.
Besides providing a clean, efficient and low priced heat source for almost 3.9 million Illinois homeowners, natural gas is a highly desired resource for industrial use and as a basic feedstock for many products like chemicals and fertilizer. The presence of natural gas pipelines is an essential requirement for heavy industry that Illinois easily satisfies.
Illinois offers a variety of energy resources. Renewable fuel choices such as wind, solar and bio have a growing presence on the landscape. Illinois has also embraced new fuel choices for vehicles, including electric, bio-diesel, E-85 and LNG. The abundance and diversity of energy choices is attractive, but even more compelling is research being conducted at Argonne National Laboratory, the University of Illinois, Caterpillar’s engine research and ADM’s experiment with carbon capture technology.
Illinois has been and continues to be a leader in energy policy, energy production, consumer benefits and emerging technologies.
The Economist released an interactive map comparing the economies of U.S. states to world countries. According to this, Illinois’ economy is equivalent to Turkey’s – which is ranked 15th in the world, with a GDP of about $615 billion.
Illinois is home to the third largest metropolitan area in the nation. It is a region that must legitimately be recognized as a three state conglomeration of interdependent commerce extending from Milwaukee, Wisconsin to South Bend, Indiana. The Chicago MSA is home to 9,522,434 people. Likewise, the “metro-east”, Illinois’ second largest population center, accounts for a quarter of the three million people that make the St. Louis metropolitan area the 19th largest in the county.
Despite anemic growth in recent decades, Illinois remains the fifth most populated state in the country. Chicago is the de facto capital of the Midwest and is ranked ninth in PricewaterhouseCooper’s report identifying global cities of opportunity. Chicago is one of only three U.S. cities to make the list.
International trade accounts for approximately 18 percent of the state gross product. Chicago hosts more than 80 foreign consulates and trade offices, more than any other U.S. city except for the nation’s capitol and the host city of the United Nations. It is an indication of how significant global enterprise is to Illinois’ economy.
Illinois boasts eight foreign trade zones. Illinois’ most significant foreign trading partners are Canada, European Union nations, Mexico and China. Canada and Mexico account for approximately 38 percent of Illinois foreign exports. Illinois is Canada’s top importer of crude oil – we spend around $12 billion per year on the product, which is processed at three Illinois refineries and the BP facility in Whiting, Indiana, and a part of the Chicago MSA. China is the number one importer of Illinois grain.
The Chicago area alone is home to over 1500 foreign-based companies and represents over $40 billion in direct foreign investment.
Business & Industry
Illinois is the fourth most productive manufacturing state. Such a large state, both from a geographic and a population perspective, means that Illinois commerce is highly diversified. No single economic segment totally dominates the economy. Such diversity means the state boasts pace setters and industry leaders in practically every business category.
Illinois boasts headquarters status for 31 of the largest publicly traded companies as identified by Fortune magazine. St. Louis is home to nine additional Fortune 500 companies. Of the 224 largest privately held companies identified by Forbes, 21 have Illinois or St. Louis as their headquarters’ location.
Illinois companies are global leaders in advertising, agriculture, aviation, business services, consumer products, commodity-options-futures-derivatives trading, communications, construction, energy, entertainment, financial services, food products, food service, health care, hospitality, insurance, manufacturing, pharmaceuticals, publishing, retail, technology and water treatment to name a few.
For example, the Rockford region employs over 4,000 engineers, including more than 500 engaged in the aerospace industry. The concentration of engineers per capita is 1.3 times the U.S. average. In aerospace alone, Rockford has access to an instant supply chain of more than 200 aerospace and aviation firms within 150 miles and an even wider variety of other supplier and support companies. Long recognized as a center for manufacturing excellence the Rockford area has the sixth highest concentration of aerospace production employment in the nation.
Illinois is well established as a leader in the life sciences and as a region the Midwestern states are outpacing the life science sphere in California and on the East coast. For example, the St. Louis region is home to the world’s largest concentration of plant science PhDs.
The overall economic output of Illinois’ biotechnology industry is more than $98.6 billion with 81,000 direct jobs and more than 3,500 biotechnology companies in the state. In fact, Illinois residents employed by biotechnology companies earn up to 91 percent more than the average Illinois resident. The biotechnology industry in Illinois has demonstrated the strongest revenue growth in recent years (averaging 13.3 percent) among all of the states analyzed according to a recent iBio report.
The University of Illinois research facilities are among the best in the world. The university secured more than $1 billion in competitively awarded federal research grants last year and now ranks sixth among universities nationwide. The Institute for Genomic Biology, the National Center for Supercomputing Applications and Blue Waters (one of the world’s fastest supercomputers) are academic leaders.
There are 11 designated incubators and tech parks throughout the state, including University of Illinois facilities in Urbana and Chicago aimed at commercializing faculty discoveries by launching successful startup enterprises. In addition to four national labs and academic research at several universities it is estimated the private sector is investing over $12 billion annually in research and development.
Chicago is ranked 10th in the world for start-up by the on line data base “Start-Up Genome”. Site Selection magazine recognized Illinois for having the fifth highest number of corporate expansion in 2012. Illinois Innovation Network reported Chicago had the second highest number of new business startups (behind Los Angeles) in 2012. Most of the new businesses were associated with marketing and e-commerce.
Conventions and tourism attracts an increasing number of visitors to Illinois. In 2013, Illinois hosted over 2 million international visitors. The Chicago Metropolitan Pier and Exhibition Authority offer 2.6 million square feet of convention space. Rosemont’s convention facilities alone host about 120 events and 1 million people per year. There are nearly 700 hotels and 101,000 guest rooms in the Chicago area.Chicago is considered the fifth most prominent convention city in the country, behind Las Vegas, Washington D.C., Miami and Orlando.
The state’s major tourist attractions include world-renowned museums, Navy Pier, Willis Tower, Wrigley Field, the riverboat architecture tour and Millennium Park in Chicago. Natural beauty is celebrated along the Great River Road, the Illinois River Valley, the Shawnee National Forest, the Cypress Creek National Wildlife Refuge and Lake Michigan’s shoreline. Premiere historic sites include Cahokia Mounds – a United Nation’s designated world heritage site – in Collinsville, Lewis and Clark State Historic Site also near St. Louis and the numerous Abraham Lincoln sites in Central Illinois, including the Presidential Museum and Library. Twentieth century progress, mobility and America’s fascination with motorized vehicles is commemorated by thousands of intrepid travelers who pursue the historic Mother Road Route 66 that traverses the state.
Illinois is 390 miles long. The northern border lies parallel to Boston, Massachusetts and extends south to point far below the historic Mason Dixon Line, even below Richmond, Virginia. Cairo, Illinois is two hours driving time closer to Memphis than it is to Chicago. Thus, southern Illinois’ proximity to servicing industrial facilities in the Deep South is comparable to Chicago’s access to the upper Midwest.
Illinois has been blessed with many strengths and assets to capitalize upon.
As a result, Illinois business continues to do well despite years of political scandal, poor management of governmental finances, dysfunctional government and frequent missteps that challenge employers’ sensibilities. Many elected officials simply fail to recognize there are real economic consequences to political decisions, regulatory indecisions, inefficiencies and delays.
Even what they say and how they say it gets the attention of investors and business owners looking for clues that Illinois is a stable, predictable, progressive and supportive business environment.
With such a history of great business leaders, entrepreneurs, inventors, innovators, and creative minds who have founded and grown highly successful enterprises in our state, I cannot help but wonder how successful today’s businesses could be if Illinois public officials would devote more attention and effort to providing the job creators a strong tailwind.
Until such time as Illinois’ unemployment numbers are once again among the lowest in the nation the objective for our public officials should be to help private sector employers become successful and prosperous with the expectation that successful business will invest and grow jobs in Illinois. The goal for every public official should be to promote prosperity and job growth so the citizens of our state can achieve self-sufficiency and a better quality of life.
I do not think the General Assembly can tax our way out of the current fiscal conundrum, but a robust and growing economy that puts large numbers of people to work in private sector jobs could do a great deal to restore the state’s financial health. In so doing, our public officials could also help restore confidence and pride in Illinois by acknowledging and building upon our many inherent strengths.
Obviously, I cannot have adequately captured every element, strength, benefit, capability or nuance that helps to make Illinois businesses successful or Illinois communities attractive. So, I invite every reader to respond by pointing out and suggesting additional data points, factoids and related matters that I could have included or at least should be aware of their importance. Please know I consciously avoided significant references to arts, culinary, cultural, civic, sports and quality of life.
Part two of the “Why Illinois” message will focus on education and workforce. You are welcome to contribute your ideas, data points and suggestions for what should be included in the message