German Immigration Drives Record FDI

German immigration has played a pivotal role in driving record levels of foreign direct investment (FDI) in North and South Carolina, showcasing the enduring power of historical ties and cultural connections in shaping international business strategies.

According to data from fDi Markets, the Carolinas collectively attracted 27% of Germany’s record $15 billion-worth of announced FDI into the US last year. This surge highlights the significance of leveraging historical and migratory ties to generate investment opportunities that can benefit economies for years to come.

The roots of the Carolinas’ German ancestry trace back to the 1700s when immigrants settled in the region, laying the foundation for strong cultural connections that persist to this day. Cities like Charlotte in North Carolina, named after a German-born queen, and counties such as Mecklenburg, reflect the enduring influence of German heritage in the region.

Tarek Hassan, a professor at Boston University specialising in FDI and immigration, emphasises the correlation between historical German migration and current FDI trends in the Carolinas. Areas with a high concentration of residents with German ancestry have consistently attracted significant investments from German companies.

The influx of German machinery businesses in the 1960s and BMW’s decision to establish its first full-assembly facility overseas in Spartanburg in the 1990s further solidified the region’s ties with Germany. Today, these historical connections continue to foster a favourable environment for German businesses seeking to expand internationally.

The presence of more than 400 German companies in North Carolina and over 200 in South Carolina underscores the strength of these ties. Iconic names like BMW, Bosch, Daimler-Mercedes Benz, and Schaeffler have established operations in the region, contributing to its reputation as a hub for automotive manufacturing and innovation.

Recent investments, such as Volkswagen’s $2 billion electric vehicle facility and Schott’s $371 million glass manufacturing plant, demonstrate the ongoing commitment of German companies to the Carolinas. These projects not only create jobs and stimulate economic growth but also reinforce the region’s attractiveness as a destination for foreign investment.

The business ecosystem created by multinational companies like BMW and Volkswagen, along with cultural ties and supportive government programmes, further enhances the appeal of the Carolinas for German investors. As Christopher Chung, CEO of the Economic Development Partnership of North Carolina, notes, these intangible connections play a crucial role in attracting investment and fostering economic prosperity in the region.