What if a group of companies could consistently outperform the market? What if they could create millions of high-quality American jobs and lead 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 that are redefining the future of US manufacturing.1
Of the more than 4,000 firms that make up the Titanium Economy, the majority have seen an 11 to 15 percent return on invested capital2 over the past decade. Most are privately owned, small- to mid-cap companies that don’t have consumer-facing brands. And for many Titanium companies, their performance has rivaled that of Silicon Valley’s tech darlings over the past decade.
Like their namesake metal, these companies are resilient and essential to many of the products that we use every day. Winners in the Titanium Economy offer a simple playbook that America’s manufacturers—and many others—can learn from: digitalize your operations, respond to external shifts, execute programmatic M&A, upskill your workforce, and prioritize sustainability.
One 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 allowed machine learning to be applied to nearly every industry, from retail to pharmaceuticals. The company is projected to generate more than $1 trillion of value by the mid-2030s. Behind the scenes, companies like these have been innovating and turning consistent growth for decades.
Despite their propensity to create value, the companies that make up the Titanium Economy are underappreciated, undervalued, and misunderstood. Qorvo, for instance, is not a name you are likely to hear at your kitchen table.
This untold story may have practical implications. Raising the profile of these top manufacturing tech companies is an important factor in the Titanium Economy realizing its full potential. Interest from stakeholders at large could stimulate new investment, 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 also the future of the country, boosting US GDP by $275 billion to $460 billion while adding up to 1.5 million jobs (exhibit).
The Great Amplification Cycle
Increased focus on and investment in the Titanium Economy could initiate a virtuous cycle of sustainable and inclusive growth3—a phenomenon we call the Great Amplification Cycle.
Despite their propensity to create value, the companies that make up the Titanium Economy are underappreciated, undervalued, and misunderstood.
The idea is simple: when industrial companies build manufacturing plants, they create jobs with good wages, often for those without a college degree. With these higher wages, people pump money into their local economies: they buy houses, they go out to eat, and they visit local shops. This allows their communities to flourish. There’s money to open businesses, to take care of parks, and to support schools, which in turn attracts more diverse people to the area, sparking new ideas and innovation. Local universities and education systems start training the local workforce to fill the growing need for talent. These new cohorts of workers, along with increased public and private investment in research and innovation, accelerate economic growth and attract new companies and new talent. And so the cycle begins again.
From Blacksburg, Virginia, to Simpsonville, South Carolina, communities around the country have thrived in recent decades because of this economic chain reaction. More could follow in their footsteps by fostering strategic collaborations among industrial companies, education systems, and local governments.
As we discuss in our book,4 the Titanium Economy is “the secret weapon of American industrial revival—the key to ensuring the country’s economic vitality as the Fourth Industrial Revolution progresses and the United States faces steep competition from global rivals.” But this can happen only if enough people embrace its potential to be a significant part of America’s future economic engine and to usher 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 dive deeper into inclusive growth and the imperative to attract talent, the sustainability imperative and opportunity for industrials, and current trends that are disrupting the industry.