Preparing Illinois for the fourth industrial revolution
The rate of hardtech innovation is accelerating. It's occurring at the intersection of digital and hardware innovation. This fourth industrial revolution is disrupting every facet of our economy. Industries such as construction, manufacturing, energy and transportation are undergoing a rapid transition forced upon them.
Illinois is positioned to lead the world in the fourth industrial revolution, and for the sake of our economy, it must. Thanks to long-term investment in Illinois' innovation capacity, the state has attracted and developed product and high-skilled talent, increasing the connectedness of the industry's key stakeholders, and expanding market opportunities. This has enabled the regional economy to stave off steeper decline. But the pain in the manufacturing industry has been real and serious risk remains.
Since 2010, Illinois' manufacturing industry has experienced steady decline due to automation and globalization, resulting in the loss of thousands of businesses and over 200,000 jobs. The industry continued to nominally grow to its current $103 billion in revenue, directly supported by 12,000-plus businesses and over 585,0000 employees. And for the economists who believe in the "multiplier effect," manufacturing has the greatest impact for both the "jobs multiplier," with every job supporting 2.91 additional jobs, and for the "revenue multiplier," with every dollar supporting another $1.33.
Doing the math results in a total of 2.3 million jobs, and a total of $239 billion of revenue attributed to the gross regional product. Best of all, these jobs don't require a college degree - which 74% of adults in Illinois lack - to participate or prosper.
Illinois remains the capital of the Midwest economy, avoiding the steady industrial decline of Rust Belt states. We've maintained a competitive edge, thanks - in part - to our world-class universities, diversified industry base, and our strategic location that positions us as a leader in transportation and logistics.
In 2013/2014, our civic leaders committed to more than $400 million in long-term investment to support talent development, product innovation, and market growth and expansion. Substantial investments in process and product innovation were made to create centers of innovation like mHUB, the independent innovation center which helps early-stage innovators create breakthrough products in robotics, connected devices, medical devices, energy tech and more. Yet with all of these investments, a funding gap persists for early-stage hardtech and manufacturing companies to grow. There's a $15 to $1 funding disparity between digital and physical startup companies. Ten years ago, affordable access to advanced hardware (e.g. processor, transistors, etc.) was not available to entrepreneurs. Today, they are readily available, at much lower. Just years ago, access to high-speed computing capacity didn't exist and data transmission was painfully slow. Today, cloud computing is unlimited and the promise of 5G erases latency and volume issues.
These trends, combined with our region's advantages, make Illinois a fertile ground for technology innovation. mHUB is taking a lead in this effort by launching a $15M seed fund and accelerator to swell the pipeline of high-potential product teams and connecting industry with highly sought after high-skilled talent for outsourced product development. The mHUB Product Impact Fund will seek to invest in companies that participate in mHUB's soon-to-launch, hardtech accelerator program, which will put cohorts of eight-to-ten high-potential and industry-aligned startups through a six-month, hands-on incubation program focused on product engineering and design, leadership development and business growth. We are excited by the opportunity to accept a total of 60 early-stage startups, which by 2023 will bring smart hardtech solutions to construction, manufacturing and other legacy industries.
With passion, commitment, and continued investment, we're prepared to lead Illinois in the Fourth Industrial Revolution.
•Haven Allen is CEO of mHUB, an independent, Chicago-based hardtech and manufacturing innovation center. For more, visit www.mHUBChicago.com.