CHICAGO - Chicago is rated in the top three best business cities in the United States by Chinese decision-makers who choose American cities in which to invest. But a survey released on Tuesday also revealed that Chinese executives are unaware of many of Chicago's key business strengths.
The survey, commissioned by World Business Chicago and the Chicago Council on Global Affairs and coordinated by Northwestern University's Kellogg School of Management, also
assesses Chinese business leaders' perceptions of different US cities.
The survey showed that Chinese leaders rely on specific criteria in identifying a North American city in which to invest.
Of most importance (in order of importance) are: a strong technology center, tax incentives, supportive local government, a large business center, a strong distribution system, the number of corporate headquarters, and proximity to supplies and buyers.
Less important attributes include a low cost of living, presence of other Chinese businesses and cultural resources.
When asked which North American cities were "the best cities to do business", 69% named New York, 57% named Chicago and 40% named San Francisco - while Washington, DC (35%) and Los Angeles (31%) trailed in the open-ended question.
Chicago was perceived positively relative to New York, Boston, San Francisco and Los Angeles on factors identified as most important to the business leaders surveyed, including a central location, tax incentives, a strong distribution system and local government support.
Although the survey found that there is high awareness of Chicago, it also showed that people lacked specific knowledge of the city.
Interestingly, Chicago was perceived as second to New York for being a tech center, while San Francisco ranked fifth. Chicago was also perceived as second for having the best business schools and the largest population (Chicago was perceived to have a larger population than Los Angeles).
But the city was also thought to be not "in touch" with China and many felt it was not centrally located and did not have a high quality of life.
Paul O'Connor, executive director of World Business Chicago, and Tim Calkins, professor of marketing at Northwestern University's Kellogg School of Management, presented the findings this week to more than 200 of Chicago's business leaders at the Chicago Club.
"The good news is that Chicago has surprisingly high awareness in China as a business city," said Paul O'Connor. "The bad news is that their understanding of our business assets is shallow and vague. We need to do a much better job of communicating the city's key attributes - largest airport, most non-stop flights to Shanghai, most diversified economy, best railroad connections, and two world-leading business schools."
The study noted the primary reason for selecting a particular US city was to gain access to the US market and capital. Chinese business investors look for a welcoming business environment and Pacific-oriented attitude.
"We are striving for the world to see that Chinese cultural and business assets are abundant in Chicago," said Marshall Bouton, president of the Chicago Council on Global Affairs.
"Foreign investors need to know that we have everything from the largest Chinese-language program in the US in our public schools, to one of the most business-friendly local governments, to an extensive list of authentic Chinese cultural institutions and restaurants, all with tremendous access to the American market."
Research for the study was done in phases and conducted by NuVista Strategies Inc. Initially, secondary research was reviewed and qualitative interviews with more than three dozen Chinese and American executives were completed.
The group then assessed perceptions of Chicago among mid-level Chinese executives with a web-based quantitative survey completed by 200 Chinese business executives. Finally, the group completed qualitative interviews with Chinese business executives in Shanghai who are involved in foreign investment decisions.
"This was an important project for Chicago, because the growth of China is one of the key global trends of the 21st century," said Calkins. "The results are very encouraging. This study is a call to action for business and civic leaders of Chicago."
The survey was an initial step in branding Chicago for the Chinese market.
Research shows that if current trends continue, China will be the biggest economy in the world by 2013. To date, most Chinese investment has been in Asia, but investment in North America is set to rise sharply.
(Asia Pulse)
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