What if a group of companies Consistently outperform the market? What if they could create millions of quality American jobs and drive technological innovation while building a more sustainable future?
These companies already exist. They are what we call the Titanium Economy: a cohort of industrial technology companies redefining the future of US manufacturing.
Of the more than 4,000 companies that make up the Titanium Economy, the majority have achieved returns of 11 to 15 percent on invested capital
over the last decade. Most are small to medium-sized, privately held companies that do not have consumer-facing brands. And for many Titanium companies, their performance over the past decade has rivaled that of Silicon Valley’s tech darlings.
Like their metal namesake, these companies are resilient and essential to many of the products we use every day. The Titanium Economy winners offer a simple playbook that America’s manufacturers—and many others—can learn from: digitize your operations, respond to external changes, execute programmatic mergers and acquisitions, upskill your workforce, and prioritize sustainability.
An example is Qorvo, the only company in the world that manufactures a critical part for mobile phones at scale. Another is NXP Semiconductors, whose innovations in precision manufacturing have made it possible to apply machine learning to nearly every industry, from retail to pharmaceuticals. The company is projected to generate more than $1 trillion in value by the mid-2030s. Behind the scenes, companies like these have been innovative and consistently growing for decades.
Despite their propensity for value creation, Titanium Economy companies are underappreciated, undervalued and misunderstood. Qorvo, for example, isn’t a name you’re likely to hear around your kitchen table.
This untold story can have practical implications. Raising the profile of these leading manufacturing technology companies is an important factor in enabling the Titanium Economy to reach its full potential. Collective interest from stakeholders could spur new investments, government programs and much-needed talent to address the labor shortage that threatens the sector’s growth. This, in turn, has the potential to reshape not only the US manufacturing industry, but the future of the country, boosting US GDP by $275 billion to $460 billion while growing as high as $1.5 million creates jobs (exhibition).
The Great Cycle of Amplification
An increased focus on and investment in the Titanium Economy could start a virtuous circle of sustainable and inclusive growth
– a phenomenon we call the Great Amplification Cycle.
Despite their propensity for value creation, Titanium Economy companies are underappreciated, undervalued and misunderstood.
The idea is simple: when industrial companies build manufacturing plants, they create well-paying jobs, often for people without a college degree. With these higher wages, people pump money into their local economies: they buy houses, eat out and visit local shops. This allows their communities to thrive. There is money to open stores, maintain parks and support schools, which in turn attracts more diverse people to the area and inspires new ideas and innovations. Local universities and education systems are beginning to train local workers to meet the growing need for talent. These new groups of workers, together with increased public and private investment in research and innovation, are accelerating economic growth and attracting new businesses and new talent. And so the cycle begins again.
From Blacksburg, Virginia, to Simpsonville, South Carolina, communities across the country have thrived over the past several decades because of this economic chain reaction. Others could follow in their footsteps by fostering strategic collaborations between industrial companies, education systems and local governments.
As we discuss in our book,
The Titanium Economy is “the secret weapon of American industrial revitalization — the key to securing the country’s economic vitality as the Fourth Industrial Revolution unfolds and the United States faces stiff competition from global rivals.” But this can only happen if Enough people are embracing its potential to be a significant part of America’s future economic engine and ushering in a new era of sustainable and inclusive growth.
This article is the first in a series about the Titanium Economy. In future articles we will delve deeper into inclusive growth and the need to attract talent, the need and opportunity for sustainability for industrial companies, and current trends disrupting the industry.