Tim Franken (InnovationQuarter) and Bodo de Wit (Brabant Development Agency (BOM)) visited the heart of the American industry, the Midwest, with a group of innovative Dutch companies. Together with the Dutch Consulate in Chicago, they organized an economic mission around the major manufacturing industry trade show IMTS (International Manufacturing & Technology Show) 2018. What four lessons do they take with them that can help pave the way for success in the US?
Four lessons on the path to success in the American manufacturing industry
The American industry seeks smart technology from abroad, despite federal government protectionist measures.
Across the United States, companies and governments are committed to strengthening and modernizing the manufacturing industry. In the Southeast and the Midwest, substantial investments are being made in R&D and workforce training. Moreover, American OEMs are very interested in smart technology from Europe and Asia.
"The American industry is aware that it needs to innovate" says Simon Bambach, Corporate VP North America for the VDL Group. Many OEMs are still vertically integrated, wanting to keep many processes in-house. According to Bambach, they are increasingly moving towards collaborating with partners in the supply chain who can perform parts of the production process more efficiently. "American OEMs are increasingly realizing that they need to outsource a larger part of their activities to boost their competitiveness. Collaboration with international partners with distinctive capabilities is essential, and companies are not easily deterred by higher import tariffs. Dutch companies with smart services or products can benefit from this, provided they prepare well."
Local presence is important to gain a serious foothold
With good preparation as a precondition, local presence is ultimately crucial to doing serious business in the US. Daan Kersten, CEO of Additive Industries, recently opened a branch in California with his company. Kersten: "Local presence is important to be taken seriously as a partner in the US. We chose to open a branch to be close to our current and potential customers in the aerospace sector." The Eindhoven producer of 3D metal printers has chosen to appoint an experienced American manager locally. They also had a booth at IMTS 2018, where they presented their 3D metal printer to an audience of more than 120,000 visitors. Other Dutch manufacturing companies with branches in the US were also represented at the fair with their own stand, such as Hembrug Machine Tools and Aerofilm Systems.
Chicago offers a lot of potential and is a serious alternative to Silicon Valley and the East Coast
Boeing, Motorola, Kraft Heinz, McDonald's, and Caterpillar; major companies that have located their headquarters in the city of Chicago. Many companies from the manufacturing, agro-food, and financial sectors are located in and around the 'Windy City'. A recent development is that the city is rapidly attracting more IT activity, from startups to tech giants. For example, Google and Facebook recently moved parts of their operations to the third largest city in the US.
While Chicago offers an attractive ecosystem for entrepreneurs, the city is still relatively untapped compared to the Bay Area and cities like New York and Boston. One advantage compared to the better-known tech hotspots is that Chicago also offers many market opportunities, but with less fierce competition and significantly lower price levels. Housing, facilities, and personnel costs in Chicago are more affordable.
Finally, the city is ideally located in the heart of the US with fast flight connections to Amsterdam and the rest of the country. An additional advantage of the location is that the time zone is attractive compared to both Europe and the US West Coast. Nadine von Seelen, US representative for industrial design firm VANBERLO: "Until noon, I can still contact my colleagues in the Netherlands, while in the afternoon I can phone a client in Silicon Valley, which helps enormously in keeping the momentum in our projects."
Take cultural differences into account and leverage Dutch values
Dutch people may sometimes underestimate the cultural differences between Europe and the US, as well as between different states. The 'average American'? It doesn't exist, according to Von Seelen. "The United States is geographically larger than Europe, and this is also reflected in cultural differences between states. So keep in mind that a 'click' and good cooperation in one state is no guarantee for success in the rest of the country." It is advisable to familiarize yourself with the culture and mentality of people throughout America.
At the same time, elements of Dutch business culture can be of great value when doing business in the US. Kersten: "At Additive Industries, we see openness as a cultural asset, part of our proposition to attract American talent." Openness, less emphasis on hierarchy, and more responsibility for employees also appeal to many young American employees. In a world where the demand for talent currently exceeds supply in many places, awareness of our own culture can also be of business value.
Interested in the US? We help you get started...
The Brabant Development Agency (BOM) and InnovationQuarter provide support to entrepreneurs with international ambitions. We do this with advice, sharing knowledge and networks, and organizing international activities such as economic missions. Collaboration and learning from each other are at the foundation of our success.