Mayor Rahm Emanuel’s plan to promote Chicago as a Midwest version of Silicon Valley took a blow recently when Motorola Mobility cut 25 percent of its workforce here a year after moving from Libertyville to the Merchandise Mart.
But Thursday was a day for Chicago to shine as a technology hub.
Gogo, which bills itself as the nation’s “leading provider of in-flight connectivity” opened its new global headquarters at 111 N. Canal to the cheers of an exuberant, 730-member workforce once headquartered in suburban Itasca.
Even more encouraging for Chicago is the growth potential for a company that offers in-flight Internet, entertainment and connected aircraft services to 11 major airlines, nearly 2,400 commercial aircraft and more than 6,800 business aircraft.
Gogo has 100 openings and, as Emanuel put it, “the capacity to grow to 1,100” employees at a headquarters that looks like tech heaven. It includes engineering labs for research and development testing and focus groups that look like the inside of a plane. A global network operations center keeps a running tab of the number of airline passengers who pay anywhere from $5 to $40 a flight for its in-flight Internet services.
Gogo President and CEO Michael Small said the incentives he got from the city and state were not the deciding factor in deciding to move the global headquarters to Chicago.
It was the fact that Chicago is a transportation hub that’s home to “a lot of bright, smart people” with advanced degrees.
“Our airline partners come visit us from all over the globe. Japan Airlines visits. You can fly direct to Chicago. You have to have a major city with a global airport,” he said.
Mayoral spokeswoman Elizabeth Langsdorf said Gogo got a subsidy from the city’s TIFWorks program that amounts to $5000 per employee with a cap of $2 million. The subsidy applied to all employees after the first 500 jobs, but only for new employees who are city residents.
Despite the Motorola Mobility setback, Small said Chicago “keeps gaining momentum as a technology center.”
“There’s the big technology companies. We’re kind of a mid-sized, rapidly growing technology company. And then, there’s the entrepreneurship — the startups. And it’s happening across all phases. It’s a much more diverse technology environment in Chicago today than it was several years ago,” Small said.
“There’s hundreds of tech companies. Even if you just stick with the G’s, you’ve got Gogo and Groupon and GrubHub and Google,” he said. “It’s becoming a diverse tech environment here.”
Small said the quality-of-life improvements by Emanuel make a difference when it comes to attracting software and IT talent.
“That we have that Riverwalk, that we have easy commuting, that we have Divvy bikes [and bike lanes] that you have a trail along lakefront and the 606. It all adds up to a place people want to be,” Small said. “If you solved the winters, everybody would live in Chicago.”