Market Intelligence
Regional Economic Development Italy Foreign Direct Investment

Italy Foreign Direct Investments (FDI) to the United States

The total stock of Italian investments to the United States reached $41.1 billion in 2021 (up from $38 billion in 2020).  The stock was $30.4 billion in 2017.  The flow of new investments remained basically stable ($2.5 billion in 2021, compared to $2.6 billion in 2020).

The first six sectors by number of announced Italian investments projects in the United States were: Industrial Equipment, Renewable Energy, Food and Beverages, Software and IT Services, Metals, and Electronic Components.

The Italian companies investing in the United States are a mix between few large companies and many Small and Medium Enterprises (SMEs).  SMEs are the backbone of the Italian economy; they usually employ limited staff and make a massive use of ‘state of the art’ high-tech machinery. 

Geographically, most Italian companies are in the Northern areas of the country.  That said, EDOs looking for Italian investors should also carefully consider the great opportunities available in the Central and Southern areas of the nation.

Italian companies are often concentrated in productive clusters or ‘distretti produttivi’, as they are called locally.  These clusters usually group companies that belong to different stages of the same supply chain.  Almost every Italian region (roughly comparable to individual U.S. States) has at least one major productive cluster. 

Companies operating in specific clusters can provide high-tech solutions and expertise in a specific sector, a know-how that major companies, both Italian and non-Italian companies, have had difficulty in finding elsewhere.  These features allowed the clusters’ companies to cope with the changes in the global supply chain.  If a major Italian client was hit by the international competition, clusters’ companies were able to get new international clients. 

Previously, clusters had developed reliable “know how” which resulted in major Italian companies’ preference to duplicate the clusters’ scheme when investing abroad by bringing their suppliers with them when it was not possible to find suitable know-how locally. 

There are cases where Italian companies have used a similar approach in the United States.  For example, companies manufacturing tiles from the Italian region of Emilia Romagna chose to locate in the State of Tennessee for the availability of local raw materials.  To develop and grow they tried to recreate a manufacturing district by bringing in some of their Italian suppliers.

Like firms from all over the world, Italian companies invest by following the current and future market opportunities.  Therefore, Italy can be an interesting market to focus on for those EDOs that offer opportunities in the different sectors that currently need more development, e.g., clean energy, clean tech, electric vehicles and components, semiconductors. 

Frequently, the high specialization level of the Italian companies allows them to be world leaders in their market niches, regardless of their small size.  Over the years, they succeeded in reaching high-tech capabilities in supplying specific products.  For example, in the mechanical sector, one of the most developed in Italy, many local companies are usually able to provide their international customers with specifically tailored solutions that cater to the end user’s needs: larger manufacturers from other countries would not focus on these very specific requests, considering them as non-profitable.  

There is another specific characteristic of Italian SMEs investments.  Due to their small size, these companies tend not to create many jobs when investing, at least initially.  Some EDOs may find this as less attractive as the Italian SMEs investments may not solve major employment issues, if any. 

However, there are some interesting aspects related to these Italian investments.  Italian manufacturers invest by using the same state of the art technologies that they use in Italy.  They start small investments but are ready to expand their investments (and create additional jobs) – when they understand the importance of being a U.S. company in the United States.  Their investments are relatively small, so EDOs do not need to provide significant amounts of incentives to attract them.  The Italian companies developing their investments in small communities in the United States come from a very similar environment in Italy.  So, their investment may result in a soft landing. 

Opportunities are available for U.S. EDOs wanting to attract investments from SMEs that will probably be small initially but can grow significantly over time.  U.S. EDOs interested in connecting with Italian industry players and seeking information on how the U.S. Commercial Service can assist them should reach out to: