Interviews
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4/27/2023
From energy to major works: so many opportunities for Italian companies
Mariangela Zappia, Italian ambassador to the United States: investment plans approved in Washington open up entirely new scenarios.
Mariangela Zappia, Italian ambassador to the United States: investment plans approved in Washington open up entirely new scenarios
Trade between Italy and the USA is continuing to grow: economic relations are a pillar of the relationship between Rome and Washington, which remains the leading non-EU destination for Italian exports. How can these relations be strengthened?
The economic partnership between Italy and the US is exceptional and is continuing to grow. The commercial exchange of goods between our two countries reached a new record level of almost 100 billion US dollars in 2022, 70 billion of which were Italian exports.
The United States boasts immense potential. It is a market of more than 350 million people with certain states still not entirely within the scope of Italian products and services; this country is also the cradle of hi-tech and innovation and the leading global finance hub, factors that open up endless opportunities for local partnerships and investment.
More specifically, in addition to traditional 'Made in Italy' sectors, there is ample room for expansion into the most innovative sectors, where the vitality and capabilities of our companies are increasingly being recognised.
Opportunities to strengthen our economic partnership even further also come from the current international situation. In the wake of changes to value chains brought about by the pandemic and then the war in Ukraine, trusted partners like Italy and the US are bound to work together even more closely. Italy’s entire system of representation in the US, consisting of the Embassy along with 9 Consulates, 6 Italian Cultural Institutes, 5 ICE (Italian Trade Agency) Offices, 2 ENIT (Italian National Tourist Board) offices, as well as 5 Chambers of Commerce and the recently launched Italian Innovation and Culture Hub in San Francisco, is doing its part to help businesses abroad and further strengthen economic relations between Italy and the US.
The Italy-US economic partnership is growing steadily. Trade exchange hit a record high of almost 100 billion USD in 2022.
There are over 1,200 Italian companies operating in the USA. What are the most interesting business niches for Italian industry?
Bilateral investment is very significant, with FDI (Foreign Direct Investment) stocks standing at around 30 billion US dollars in both directions. Italian business in the US is mostly concentrated in the retail (textiles/clothing), mechanical engineering, farm-food, automotive, energy, logistics, infrastructure, defence and aerospace industries.
The most interesting business sectors for Italian industry are undoubtedly those with high technological content. They favour reciprocal 'contamination' with the exporting of Italian 'know-how' and, at the same time, the acquisition of new skills in terms of innovation and manufacturing processes from American partners. In addition to its acknowledged skills in the fashion, furniture, and farm-food businesses, Italy is a leader here in numerous other sectors ranging from hi-tech machinery and pharmaceuticals to renewable energy, the aerospace industry and building/construction. Thanks to an ability to combine tradition and innovation, our businesses can find opportunities for growth and expansion on this market.
There are many big names in Italian industry in the USA. Can big businesses also be a driving force for Italian SMEs (small and medium-size enterprises) hoping to break onto the American market?
The American market is a very complex and intricate market. Large Italian industrial groups, thanks to their adaptability and the greater resources at their disposal, can undoubtedly also be a driving force for SMEs, opening up export and investment opportunities for them along their respective supply chains and facilitating the transfer of knowledge and skills from the American market to the Italian market and vice-versa. It is also important for SMEs to take advantage of the opportunities offered by the so-called ‘Sistema Italia’ (Italian System), thanks above all to the work of ICE.
There are numerous projects focused specifically on SMEs interested in the American market. To give an example, Cassa Depositi e Prestiti bank, in conjunction with the Embassy and ICE, recently launched its own business matching platform in the USA specially for SMEs, with the aim of fostering the creation of new networks and partnerships between Italian and American companies.
Energy and infrastructure: there are major investment plans in the USA. Is this both an opportunity and a challenge for Italian companies?
Major investment plans approved in the USA open up entirely new scenarios, not without some critical issues for the European industrial system, but also full of opportunities for Italian companies as well. Thanks to the action taken by the European Union, partly prompted by Italy, to neutralise the potentially distorting effects of measures adopted in the US concerning companies based in Italy and Europe, new opportunities will open up in addition to those our companies already established in the US are taking advantage of thanks to the incentives and subsidies provided by the US administration's measures.
In both the energy and infrastructure sectors, Italy is particularly at the forefront, thanks to its know-how in terms of innovation and the various investments made over the years. The strong presence of Italian companies in the US in these sectors allows us to play a central role in the country's transition.
Investing in the United States: 5 tips to be competitive
First and foremost, you must prepare your investment plan very carefully. America is the land of opportunity, but the 'American dream' must be chased with circumspection, because there are many differences between the European market and that of the United States and no lack of difficulties to be overcome. I would then recommend:
- Open a local office preferably employing American staff;
- For larger and more complex businesses, I believe it is essential to establish a partnership with an American enterprise or make an acquisition;
- In connection with the previous points, you need to fully understand the regulatory framework;
- Look at investment in the US also as an opportunity to acquire new skills with reciprocal interaction and exchange potentially benefiting our country, too;
- To do this, it is important to be able to rely on the right partners from the Embassy to Consulates, from ICE to investment banks and even expert consultants with proven experience.
The United States boasts immense potential, but the American dream must be pursued with circumspection: the first piece of advice is to carefully prepare an investment plan.
Which initiatives are carried out by Italian representations in the USA to support investment in the American market.
There are numerous initiatives closely coordinated by the diplomatic-consular network in the USA with a view to implementing the Ministry of Foreign Affairs and Coordination's global vision. From specific events linked to certain economic sectors (such as the farm-food industry, the design/craft industry or the so-called "space economy"), to initiatives focused on the excellence of Italian companies in terms of innovation and sustainability, the Embassy works with Consulates, ICE Offices and all the players of ‘Sistema Italia’ in the USA to promote Italian industry across the board.
There are important projects supporting Italian investment in the USA. In addition to widescale action taken by the ICE, I would like to mention the launch (supported by the Embassy) of the Transatlantic Investment Committee as a catalyst for investment across both sides of the Atlantic in emerging sectors, and also operations promoted by the Italian Innovation and Culture Hub in San Francisco, which is a modern and flexible means of supporting businesses, start-ups and research centres with high innovative content.
The network made up of the Embassy, Consulates and ICE organises hundreds of promotional events, carries out constant trade defence action, promotes investment, provides information, facilitates involvement in trade fairs in the USA and Italy, assists hundreds of companies from large groups to SMEs and start-ups to expand on this market, and promotes scientific/technological cooperation and training.