US Export Plan - Sector Report - Engineering and Advanced Manufacturing

Opportunity states

As this sector is cross-cutting, with advanced manufacturing applications spanning multiple industries, there are a diverse mix of states that offer distinct opportunities. However, with all these states there can be significant domestic competition, and Scottish companies will often need to be prepared to have physical presence and commitment to break into the market. Some businesses may need to consider establishing a US entity or joint venture to navigate regulations like BABA and to access state incentives, or to meet domestic sourcing requirements. They also face intense overseas competition, including from cost competitive geographies and global tech leaders in most subsectors. According to the US Census Bureau, China accounted for the highest value of advanced technology products imported to the US. Canada, Mexico, Germany and Japan also present strong competition ^[37].

The top five states identified through our Matrix and verified by stakeholder consultation and desk-based research are:

California – California is becoming a power-house for technology-driven manufacturing. It is home to Silicon Valley and major tech clusters, driving integration of advanced manufacturing with digital technologies (including AI, IoT, and robotics). California’s strong innovation ecosystem, major ports, and clean energy investment means that the state provides a high-demand market for cutting-edge Scottish expertise in subsea tech and intelligent marine technologies. In 2024, there were 763 VC deals in engineering and advanced manufacturing in California, by far the highest figure of any US state. It also has the highest presence of relevant businesses of all states, with 16,789 companies in the sector according to Orbis data.

Texas – Often considered a manufacturing powerhouse, Texas continues to see growth in advanced manufacturing supported by robust infrastructure and generally business-friendly environment. In particular, Texas is ranked no.1 in the US for semiconductor manufacturing capacity and has the second highest value of semiconductor imports from the UK of all states (after California). Additive manufacturing is also gaining traction, especially in industries like aerospace and medical devices. These advances are positioning Texas as a hub for cutting-edge manufacturing innovation^[38]. Advanced manufacturing companies with a strong presence in Texas include Tesla, Samsung, Toyota and Dell Technologies^[39]. In 2024 it had a significant volume of VC deals related to engineering and advanced manufacturing (200), representing a 6% increase since 2020. It also boasts a significant presence of businesses in this sector at 7,500, the second highest figure of all states. Under the UK-Texas Statement of Mutual Cooperation, both parties have committed to strengthening collaboration in advanced manufacturing and engineering, including semiconductors and emerging technologies such as additive manufacturing, to drive innovation and supply chain resilience.

Michigan – Michigan is recognised as the epicentre of the US automotive industry and a global leader in next-generation mobility. It is home to nearly 19% of all US auto production, more than any state^[40]. Michigan is leading the way with some of the most aggressive legislation and state funding for connected and automated vehicle technology testing with the creation of the American Centre for Mobility test facility^[41]. Michigan also has a strong aerospace supply chain and defence manufacturing presence, providing opportunity for high-spec machining, composite materials and a range of dual-use technologies. To support market entrants, the Michigan Economic Development Corporation’s Office of Defence and Aerospace Innovation (ODAI) offers grant assistance, proposal support, and ITAR/compliance guidance to facilitate market entry^[42].

North Carolina – North Carolina has experienced rapid growth in EV battery plants, aerospace and advanced materials and is attracting big names in manufacturing. For example, in November 2025 Toyota opened a $14 billion North Carolina plant, marking the company’s first battery facility outside Japan^[43]. Furthermore, in August 2025 Johnson and Johnson announced a $2 billion investment in a new manufacturing facility in Holly Springs, North Carolina. Additionally, the state provides job creation and infrastructure investment credits, making it attractive for engineering and advanced manufacturing firms who need to have boots on the ground. A study by State Selection Group examining states on their competitiveness for corporate investment (‘Best States for Manufacturing’) found that North Carolina was ranked first overall, closely followed by South Carolina^[44]. The UK-North Carolina Memorandum of Understanding, signed in July 2023, reinforces cooperation, and creates opportunities for Scottish firms to collaborate in advanced manufacturing, clean energy, innovation, EV technologies, aerospace, and advanced materials among others.

Florida – Florida has over 5,000 businesses in this sector including major players in the aviation and aerospace sector such as Lockheed Martin, Northrop Grumman and Blue Origin. Scotland’s capabilities in advanced materials and engineering services align with Florida’s investment in advanced manufacturing and aerospace clusters. In 2024 it had 106 VC deals in this sector indicating strong investor sentiment. It also has a collaborative support ecosystem with growth-oriented agencies and clusters such as FloridaMakes^[45] and Space Florida^[46], supporting innovation co-investment and partnership and attracting SMEs seeking local collaboration.

Other notable opportunity states:

Pennsylvania – Pennsylvania offers another interesting market for Scottish companies delivering cutting-edge industrial automation expertise and technologies. It offers a robust manufacturing base, strategic location, and thriving robotics ecosystem. It also benefits from Carnegie Mellon University’s world-leading Robotics Institute, which has become a hub for AI-driven robotics and collaborative automation, supported by innovation centres and strong state incentives. Its Keystone Opportunity Zones are designated areas that provide long-term tax relief for businesses willing to invest^[47].

Maryland – Maryland is fast become an important hub for quantum investment and innovation and is increasingly recognised as the ‘Capital of Quantum,’. This status was reinforced in September 2025 when the Governor announced a partnership between the University of Maryland and Microsoft to establish a new quantum research centre at the university’s Discovery District. The lab will provide a unique, cutting-edge space to support collaborative hardware and software development and feature one of the first prototypes of Microsoft’s topological quantum computer.^[48] This initiative forms part of a broader programme aimed at attracting over $1billion in public and private investment to cement the states status as the quantum hub^[49]. The expansion of quantum R&D infrastructure is also creating strong demand for the essential components required in quantum communication and networking - areas well aligned with Scotland’s established strengths in photonics and quantum‑enabling technologies.

Massachusetts – With strong venture capital investment, specialised incubators, and a thriving health tech ecosystem, Massachusetts offers a range of opportunities for innovation in medical robotics, AI-driven healthcare, and advanced biotech solutions among other sectors.

Washington – Washington is one of the most significant aerospace clusters in the world, anchored by Boeing. This dynamic ecosystem offers Scottish firms opportunities for partnerships, technology transfer, and integration into a high-growth US aerospace market.