It is hard to argue against US claims that it is the global leader in attracting FDI. Despite the rise of emerging markets, eras marked by offshoring and now nearshoring, recessions and changing politics, over the past decade the US has consistently won more FDI projects than any other country, as data tracked by fDi Markets shows.

Undeniably, being home to the world’s largest economy and third biggest population is part of its enduring appeal. But corporate leaders repeatedly tell us they invest in the US for its innovation ecosystems, pro-business culture and, notwithstanding recent wavering under protectionist policies, its free-market principles. 

Successive national governments have taken differing stances to FDI. But their common thread has been a commitment to bolstering sectors that enhance US security and economic leadership. Further fuelled by the pandemic and record-breaking incentives under the Inflation Reduction Act and CHIPS and Science Act, this has led to a surge in FDI into renewable power, electric vehicles and key technologies such as semiconductors.  

The result is that a cursory glance across the country’s FDI map reveals some clear winners. Texas, New York and California dominate technology and renewable energy FDI, buoyed by 2023 announcements such as India-based Waaree Group’s $1bn solar module plant in the Houston area and Stellantis’s investment in the Hell’s Kitchen geothermal lithium project along the country’s south-eastern border.

Arizona has made a name for itself as the country’s leading microchip production hub, aided by Taiwan’s TSMC pouring $65bn into three fabs in the state, while Nevada’s deep lithium reserves make it a critical minerals hotspot. Meanwhile Massachusetts’s leading life sciences cluster has been boosted by an influx of projects from foreign biotech firms since the Covid-19 pandemic.  

The electrification of mobility has visibly accelerated the US auto industry’s southern migration from Michigan towards the likes of Georgia, North Carolina, South Carolina, Alabama and Tennessee in the so-called battery belt. Automotive and battery firms such as Hyundai, Toyota, Vinfast, Volkswagen and LG have been behind some of these states’ biggest FDI project announcements in recent years.

A patchwork of projects

While these states have pushed US FDI to record highs over the past two years (fDi Markets data shows that project announcements numbered 1973 last year and 1985 in 2022) they should not overshadow the thriving sector-specific ecosystems dotted around the country which are proving a sweet spot for foreign and US firms alike. Virginia is the world’s biggest data centre market, according to Cushman & Wakefield, buoyed by its communications sector receiving more interstate and international capital expenditure than anywhere else in the US over the past two decades. 

Meanwhile Oklahoma is second only to Texas when it comes to wind power FDI during the same period, while critical minerals have helped make Utah the country’s biggest recipient of extraction FDI projects over the past 10 years. Rhode Island, the smallest US state by land mass, is one of the country’s most popular destinations for shipping investments thanks to its maritime history. Idaho in the north-west also shows promise as a semiconductor hub thanks to large capacity expansions being made by its homegrown microchip champion Micron.

Stories like this are a reminder that amid the flashy announcements of FDI megaprojects in sectors driving the new economy, we should not forget that the US investment market is more nuanced than first meets the eye. Its state borders represent a patchwork of industrial strengths and potential, with even the smallest locations having honed their expertise and investment merits. As we hope this report shows, there seems to be a place for (almost) every sector in the US. It’s just a matter of finding where best to plant your American roots.

Click here to explore the report’s findings, state by state

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This article first appeared in the June/July 2024 print edition of fDi Intelligence