In Which Industries Can German Enterprises Score?
The U.S. remains an attractive location for German companies looking to expand. Despite the pandemic, there are many industries that continue to grow steadily this year, promising new sales opportunities. In this blog article, we would like to present the most promising economic sectors in which German SMEs in particular can profit from their unique know-how. Let’s get started…
Artificial Intelligence
This year, the U.S. will continue to rank first worldwide in the field of artificial intelligence (AI). With a growth rate of 31.5%, the US market is expected to grow to a total of 128.8 billion USD by 2028. As well as the well-known tech companies in the Silicon Valley such as Apple, Facebook and Google, other sectors with a higher labor intensity also benefit from AI, such as climate, water, and energy industries, or companies and institutions in the infrastructure and education sector.
Water Management
For German enterprises looking to enter the North American market, there is another sector that they should keep an eye on: The water management sector has reached a volume of 100 billion USD and is growing by 10% per year. The USA is currently spending 15 billion USD on remodeling the remaining lead pipes – the drinking water systems in the U.S are on average 45 years old, resulting in a high rate of loss of water resources. One of the largest water supply systems is located in San Francisco, which is facing increasing water demand and water pollution. With the help of German project partners, investments in this area are to be driven forward in the coming years; companies dedicated to the digitalization of infrastructure and the use of IoT technology are in demand.
Waste Management/Recycling
Further opportunities for German companies are emerging in 2022 and 2023, particularly in the recycling industry. Germany has had a leading role in this field for the past decade, also because of the implementation of the resource efficiency program. The USA want to catch up in this field and is investing 270 million USD over the next three years solely in California to improve recycling systems and the circular economy in general. There is also support from California’s SB 343 law (2021), under which products must meet new criteria for recyclability. German companies can target this area to generate new innovation and sales potential in the U.S. market due to Germany’s lead in this sector of the economy.
Gaming/Entertainment
In economic terms, the pandemic was difficult for most industries to cope with. But not for the gaming industry, which was able to record an exceptionally high growth rate in the meantime. The U.S. leads the industry worldwide, with revenues of nearly 57 billion USD and more than 200 million end users. California, along with Washington State, is considered the stronghold of the video games industry, and currently generates sales of 22.5 billion USD. For all dynamically developing German companies in the gaming sector, California’s innovative ecosystem offers promising opportunities to profit from the growth and to drive forward new product ideas.
Energy Efficiency in Buildings
The ambitious climate policies of the two states make energy-efficient construction a highly topical issue in California and Washington. The smart cities sector in particular is booming, with the number of LEED (Leadership in Energy and Environmental Design) certified projects in the United States rising from 3,156 certifications in 2005 to over 69,000 in 2019. Top places in the energy efficiency rankings here are occupied by the cities of Seattle and Los Angeles. Both metropolitan areas have very good framework conditions for investments in smart city applications: the flourishing tech and startup industry, the profound awareness of sustainability among the population, and ambitious regulations and incentive programs relating to energy efficiency. With a market volume of 81 billion USD, the green building market accounts for more than 20% of total sales in the US construction sector. This offers a wide range of opportunities for German enterprises, especially since Germany is considered as a digitalization pioneer in the energy efficiency/green tech sector.
Autonomous Driving
There’s no question about it: Germany has one of the most important automotive industries. But for the number one future trend of autonomous driving, it’s worth having a look across the Atlantic to the US. In 2020 the market for autonomous vehicles in the U.S. was already estimated at more than 3 billion USD and is expected to reach a value of more than 8 billion USD by 2026. Michigan and California, especially the cities Detroit and San Francisco, also offer good market opportunities for German automotive companies, as there is a so-called “early adopter” culture there. Michigan is considered as the center of mobility and the most important place for car manufacturers and automotive suppliers. Over the course of just a few years, Silicon Valley has become the world’s leading location for the development of autonomous driving technologies.
Discover your Opportunities!
For all those who want to benefit from the emerging U.S. market in the field of autonomous driving, we might have the right program: from June 27 to July 1, 2022, German SMEs have the unique opportunity to learn more about a possible market entry and key players of the ecosystems in Detroit and Silicon Valley on site. Details on the program can be found here.
For more exciting insights from the U.S. West Coast and beyond, also visit our website.
