Chicago was justifiably proud when Boeing decided, this spring, to move its headquarters there from Seattle. The third-largest city in the United States, Chicago is home to more Fortune 500 companies than any other metropolitan region except New York. This concentration helped the Windy City post the highest growth in personal income and the second-highest rate of growth in employment among the five largest US cities during the past decade.

Even so, will Chicago be able to attract the important companies of the future? Today, more than 90 percent of all employees in the Chicago metropolitan area work for businesses in traditional sectors such as financial services, manufacturing, real estate, and retailing-industries that are expected to experience relatively low job growth nationally over the next few years. If Chicago is to go on growing, it must win its share of companies in newer, mushrooming sectors such as biotechnology and software.

A study delivered to the mayor in March 2001 concluded that the city should think small and build a business environment attractive to start-ups as well as to giant Boeing. New businesses and "gazelles" (companies that grow by more than 20 percent annually over a four-year period) accounted for 80...