Across the Organisation for Economic Co-operation and Development (OECD), globalisation is increasingly testing the capacity of regional economies to adapt and exploit their competitive edge, while also offering new opportunities for regional development. This is leading public authorities to rethink their strategies. Moreover, as a result of decentralisation, central governments no longer have the sole responsibility for development policies. Effective relations between different levels of government are now required in order to improve the delivery of public services.

The Chicago Tri-State Metro-Region – the 14-county Chicago-Naperville Joliet Metropolitan Statistical Area (MSA) – is home to approximately 9.5 million people, of whom over 90% live in Illinois, less than 2% in Wisconsin and the remainder in Indiana. It is the third most populous metropolitan area in the country, and the tenth largest among the OECD Metro-Regions. Only Los Angeles and New York have larger populations within the US, all three being outstripped by Mexico City, Seoul and, especially Tokyo with its 35 million inhabitants. The City of Chicago, located essentially in Cook County but extending into parts of DuPage County near O’Hare international airport, has a population of 2.7 million (28% of the total metro population) and a population density about ten times higher than the region’s average. The fact that the region crosses state boundaries and encompasses a large number of municipal and other service-based administrative units poses particular challenges for its effective governance and development. Beyond the Chicago Tri-State Metro-Region, the 21-county Tri-State Region, sometimes referred to as the Gary-Chicago-Milwaukee corridor, is increasingly regarded by civic, business and political leaders as a common economic area, with nascent and growing commuting flows from the seven “external” counties into the Chicago Tri-State Metro-Region.

This chapter describes the spatial unit of analysis for the Review: The Chicago Tri-State Metro-Region is the third most populous metropolitan area in the United States, and its GDP ranks eighth out of the 90 OECD Metropolitan Regions. The chapter describes the main characteristics of the region’s economy, including new sectors in nanotech, biotech, ICT and green engineering. The chapter assesses the main challenges facing the regional economy: growth rates are slipping due in no small part to the relatively poor productivity of its workforce, with a serious mismatch between skills demand and supply at all levels of business activity. The chapter then outlines the diagnostics that will frame the rest of the Review.

This chapter focuses on workforce development issues. It first describes the regional context. The financial crisis has highlighted the skill mismatches hobbling regional growth, and this weakness is exacerbated by its relative incapacity to attract and retain high-skilled labour. The chapter then analyses current workforce development efforts and offers a diagnostic on a possible way forward. Public stakeholders need to engage the private sector more systematically in providing ongoing support – both financial and curriculum-based – for skills upgrading. Workforce boards and agencies need to work across county and state boundaries to streamline processes and programming and improve data-gathering and information-sharing capacity.

This chapter focuses on the region’s innovation and entrepreneurship capacity. Human capital lies at the core of any innovation ecosystem, and while the region is a magnet for Midwest talent, the segment of the population with low skills along with shortages in particular skills, such as computer science, mathematics and business administration, constitute bottlenecks that need to be fixed. The private and non-profit sectors are more advanced than are the federal, state and local authorities in articulating, promoting and pursuing a true, region-wide vision for innovation-led growth. The chapter underscores the need for a public-sector change in attitude to ensure a reduction in the “race-to-the-bottom” style of competition among local and state authorities and a more strategic focus that orients investments toward supporting the region’s innovation drivers through greater collaboration and pooling of scarce resources.

This chapter focuses on the region’s transportation and logistics functions. This major continent-wide player in passenger air travel, air cargo, railways and trucking generates significant employment and value-added activity. The chapter suggests that the state of the hub’s economic health should be of concern not only to local and state-level stakeholders but to the US federal government as well. The hub faces serious challenges – space constraints, congestion, financing issues and poorly integrated, region-wide planning to sustain its capacity to contribute meaningfully to regional and national growth. The chapter outlines the need for greater planning and co-operation among stakeholders. Key players from the various transportation modes and industrial sub-sectors making up the hub need to work together across state lines to drive interstate collaboration in the form of a comprehensive Tri- State inter-modal plan.

This chapter focuses on the Tri-State Region’s green growth potential. Green jobs are growing in the region, particularly in building related activities and transportation. The region has also become specialised in professional energy services, air and water purification technologies, lighting, and green architecture and construction services. Sustainable financing mechanisms are needed for energy efficiency retrofits and energy audits to build the region’s green architecture and construction sectors. The public transit system is facing a severe funding shortage; congestion charges and value-capture taxes should be considered to address the issue. Changing water and waste fees across the region to better reflect consumption and cost of service delivery would encourage conservation and recycling while generating additional sources of revenue.

This chapter focuses on the effectiveness of region-wide governance. The region faces challenges associated with articulating and implementing region-wide plans to address workforce development, innovation capacity, transportation and logistics and green growth. At issue is how to go about developing and implementing these action plans effectively, and how to monitor progress and measure success over time. Main challenges include institutional fragmentation and the region’s limited capacity to think and act regionally. These challenges make interstate, region-wide co-ordination difficult, leaving little energy or political capital for focusing on long-term issues. These challenges hinder the ability to appreciate the true nature of the region’s competitors, both international and domestic. This chapter proposes a road map to encourage more effective, on-going Tri-State collaboration to drive growth.