Investments for South Tyrol: Opportunities through Made in Italy!

Investments for South Tyrol: Opportunities through Made in Italy!

A major conference on foreign direct investment (FDI) took place in Civitavecchia, Italy, on May 30, where key political actors discussed the economic future of Italy and South Tyrol in particular. Marco Galateo, Deputy Governor and State Councilor for Economic Affairs, and Adolfo Urso, Minister for Enterprise and Made in Italy, took part in the event. The aim of the conference was to secure investments and promote the development of small and medium-sized enterprises (SMEs) and innovative start-ups. As part of the event, the importance of the “Made in Italy” brand for the economy of South Tyrol was highlighted.

Galateo stressed the need for a comprehensive approach to attracting foreign investment. A favorable system environment, targeted support and clear communication of competitive advantages are crucial here. Despite South Tyrol's locational advantages, such as its international orientation and rich cultural heritage, the region faces challenges, in particular the lack of available production space. The aim is to attract companies with low space consumption and high added value.

Foreign direct investment and its importance

Foreign direct investment is long-term investment by companies in other economic areas and includes various forms such as company mergers, acquisitions and investments, as well as capital transfers to set up companies abroad. FDI is characterized by the long-term interest of the direct investor and can contribute significantly to the economic development of a region. The minimum shareholding level for FDI is 10 percent of voting rights.

The dynamics of FDI inflows and outflows have expanded significantly in recent decades. These flows have risen similarly compared to global exports of goods, which increased sevenfold between 1990 and 2022. Loud BPB FDI stocks increased by a factor of 18 over the same period.

Global trends and influences

Currently, the global average stock of FDI is $40.9 trillion (2020-2022), while the US holds the largest share of FDI stocks at 21.2 percent, followed by China and Hong Kong. Interestingly, the share of economically developed countries in FDI stocks has decreased since 1990, from 76.1 percent to 69.0 percent in 2020-2022. This indicates changing global economic structures.

With regard to South Tyrol, the event in Civitavecchia is seen as an important step to strengthen the region's position in the location competition. A new project to specifically support investments and economic opportunities for South Tyrolean SMEs and start-ups was presented, which is intended to significantly increase the region's competitiveness. The “Made in Italy” brand is therefore seen not only as an economic but also as a cultural capital that contributes to the attractiveness of the region.