In 1999, 192 public companies with more than 500 employees were headquartered in the Chicago region. This is an increase of 16% over the 1990 figure of 166. The number of companies with headquarters in the region peaked in 1997 at 214.

The number of business headquarters is an indicator of a region’s overall economic climate and quality because corporate headquarters locate “where the actions is,” as measured by, among other factors: access to capital and financial markets, skilled workers, efficient and reliable transportation, world-class educational institutions and cultural and recreational opportunities. The fact that we have seen a decline of headquarter firms in 1998 and 1999 from the 1997 peak could be an early warning signal concerning the region’s attractiveness.

The benefits of having corporate headquarters are important. Corporate headquarters generate business for providers of financial, legal, professional and travel services, while bringing people to Chicago for meetings. Headquarters tend to have greater ties to local communities, through philanthropy and civic partnerships, than do regional offices and branch plants of corporations with headquarters elsewhere.

The $317 billion regional economy is exceptionally diverse in its job base, with 15 major concentrations of industry sectors. Having multiple industry sectors that are concentrated in the region and/or growing faster than elsewhere in the nation indicates the vitality of the region’s economy. For instance, the concentration of employment in business services is 6.5 times greater than the national average, while its annual growth is 1.4 times greater than the national average. The fastest-growing sectors in terms of jobs are business services, software and tourism, while declines are reported in publishing and printing, chemicals and bioindustry and labs. The largest sectors are business services, finance and communications/electronics.

Value-added per employee in the Chicago region was 17% above the national level in 1999. It has risen 2.1% per year since 1989, compared to 1.6% nationally. The revenues each employee added to the Chicago gross regional product before the cost of labor was subtracted averaged $81,832 in 1999. Nationally, that figure was $69,806. Value-added is a measure of how much economic value a company creates through its activities, for instance, by turning steel sheet into an automobile fender or cooking raw ingredients to create a prepared-food product. The value can come from innovation, such as development of a new type of software, or from effective use of labor and capital.

Logistics, business services, software and printing and publishing are very competitive in terms of value-added compared to their national counterparts, while the region shows a relative lack of competitiveness in some of its larger employment sectors like chemicals, finance and communications/electronics.

A value-added index of 1.45 for the logistics sector means that this sector in the Chicago region’s economy adds 45% more value than the national average for that industry.

Despite an average influx of about 40,000 foreign-born immigrants each year since 1990, the region has an annual net migration loss because about 60,000 area residents move elsewhere each year. The region’s population is growing only because there are more births in the region than deaths. This indicator measures whether residents are choosing to move away from the region and whether Chicago is competitive in attracting residents domestically.