Go West
io is the Expert for Expansion into the USA
Opportunity Across the Atlantic
Seeking one’s fortune in America is an age-old tradition. Right now, the leap across the pond is once again in the sights of German companies. All signs point to expansion into the USA – for several reasons: To begin with, globalization is clearly shifting towards regional production chains due to international tensions, logistical hurdles and ecological efforts. There is growing appetite in the USA in particular to emancipate themselves from foreign trade. At the same time, a veritable energy revolution is taking place in the United States. It is based on the Inflation Reduction Act (IRA) passed in 2022 – the most significant federal investment in US history to combat climate change. The energy revolution is also being fueled by the Infrastructure Investment and Jobs Act (IIJA), which promotes one-off infrastructure investments.
With these two laws, the US Congress has put together a huge and unprecedented support package. They are seen as enormous multipliers for private investment in clean energy. The IRA promotes e-mobility and solar energy, offshore wind turbines, battery storage, green and blue hydrogen, bio-diesel, heat pumps and residential buildings. The IIJA is again aimed at sustainable and renewable technologies – on hydrogen hubs, carbon capture, battery recycling and critical minerals. It is also addressing the education system, training specialists and improving the electricity grid. Efforts are even being made to tackle difficult-to-decarbonize industries.
We are currently receiving more inquiries from large corporate accounts. We are also receiving an increasing number of requests for site selection and investment planning services, expansion strategies and comprehensive project support.
A Trillion-Dollar Opportunity: Energy, Growth & Market Access
The US government originally announced subsidies amounting to around 400 billion dollars. However, it is currently projected that more than one trillion dollars will be made available over a period of ten years. That is huge! It’s equivalent to a quarter of Germany’s gross domestic product.
The Ease of Doing Business Index is another significant incentive for expansions into the US. The best-known and most comprehensive study on business friendliness and corporate regulation in national economies, it confirms the common clichés of the Land of the Free and German officialdom: The USA is listed in 6th place, Germany in 22nd – and that is down to its pronounced bureaucracy. There are far fewer official hurdles to navigate to invest in the United States.
The sheer size of the USA is another factor. Only India and China are ahead of the United States in terms of population. According to current surveys, the USA will be in fourth place in 2050 – and will continue to be one of the largest population markets in the world, while Germany, with a population growth rate of 0.2 percent , lags much further behind.
Of course, the intensive partnership between the USA and the EU in general and Germany in particular is also significant. We share common values, democratic principles and the idea of the rule of law. We also have deep economic ties based on the principles of liberalization and the removal of trade barriers. So: California, here we come? Sure thing. Or Texas, or New York, or Arkansas. Entrepreneurs with vision are currently receiving a particularly warm welcome in the United States.
io in the U.S.: Real Projects, Real Growth
io itself opened its US site back in 2006 – in Bethlehem, Pennsylvania. Its service portfolio focuses around logistics, supply chain, factory planning and SAP. Orders came flooding in from companies such as BMW, Daimler, Bosch, Nature Sunshine, Rolls Royce, Whole Foods Market and Freshpet. “We are currently receiving more inquiries from large accounts," reports Martin Toth, who, as a member of io’s Board of Directors, is in charge of local operations. Of course, this is in no small part due to the growing number of references. However, the economic upturn in America is also a significant factor, Toth adds. “It is leading to increasing demand in production and distribution. We are also receiving an increasing number of requests for services relating to site selection and investment planning, expansion strategies and holistic project planning.” Turning to current developments, he explains further: “Topics such as sustainability and alternative energies will certainly be added to the mix.”
Toth and the 25-strong US team are currently involved in a range of projects, supported by external freelancers. They are, for example, overseeing the design and implementation of a new production and sales location for tech company BELIMO. They are also planning the extension of HALKEY-ROBERTS’ logistics center, which develops components for medical devices and aviation. A warehouse analysis is being carried out for cigar manufacturer JOHN MIDDLETON. Optimizing the material flow for automotive supplier KAMAX, which includes analyzing the entire logistics of production supply is another flagship project they are currently mastering. And last but not least, they are planning a new distribution center for spare parts, a new production warehouse and the concept and site master plan for a new production hall for MTU AMERICA, a manufacturer of aircraft engines. So there’s an awful lot going on in the United States.